India’s artificial intelligence (AI) market reached an inflection point in 2024, transitioning from experimental deployments to industrial-scale adoption across sectors. As enterprises recalibrated their digital strategies post-pandemic, AI emerged as a foundational layer—powering automation, enhancing customer experience, and enabling real-time intelligence. According to Nasscom and EY estimates, India’s AI market grew to USD 7.8 billion in 2024, a robust 44% year-over-year increase, with projections placing it at over USD 17 billion by 2027.
Driving this momentum were critical factors: the proliferation of cloud infrastructure, accelerated adoption of generative AI, maturing data policies, government incentives, and a robust base of AI talent. More than 75% of large Indian enterprises had adopted some form of AI by the end of 2024, reflecting a strategic pivot toward intelligent automation and augmented decision-making.
AI Trends Reshaping Enterprises
One of the defining trends of 2024 was the industrial-scale application of generative AI (GenAI). Enterprises rapidly expanded use cases beyond chatbots into document automation, creative content generation, software coding assistance, and intelligent search. TCS introduced its Cognix GenAI to enable process transformation across industries, while Infosys' Topaz provided domain-specific AI agents capable of extracting actionable insights from unstructured enterprise data.
The BFSI sector was an early and aggressive adopter. HDFC Life deployed GenAI-based policy summarizers to reduce document processing time by 40%. Axis Bank deployed AI in fraud detection workflows, shrinking detection-to-response times significantly. Retailers such as Flipkart and Tata Neu utilized GenAI for real-time personalization, boosting customer engagement metrics. In manufacturing, Maruti Suzuki leveraged computer vision for quality inspection and line optimization, while pharma majors implemented machine learning to expedite drug discovery.
Ethical AI became a growing concern. Close to half of India’s top 500 enterprises began implementing internal AI governance protocols. Companies sought to ensure transparency in model behavior, fairness in outcomes, and auditability in high-risk use cases, especially in hiring, lending, and healthcare.
Global AI Movements and Their Influence
The global AI race, led by releases like GPT-4 Turbo and Google’s Gemini, had immediate ripple effects across Indian enterprises and startups. Developers fine-tuned these models using Indian datasets to serve localized needs-from multilingual customer service to Indic-language summarization tools. Open-source models such as Meta’s LLaMA 2 and Mistral offered affordable pathways for startups to build custom AI solutions.
Strategic partnerships flourished. Infosys extended its relationship with NVIDIA, gaining access to advanced GPU infrastructure and accelerating client implementations of LLM-based applications. Wipro co-developed industry-specific AI frameworks with IBM WatsonX, especially in supply chain and customer service automation. India also contributed to global conversations around AI safety, joining the Bletchley Declaration and pushing for inclusion in future AI guardrail-setting bodies.
Sectoral Penetration and Domestic Momentum
AI adoption surged across sectors in 2024. According to IDC, 62% of Indian enterprises deployed at least one AI or machine learning solution at production scale, with BFSI, healthcare, manufacturing, education, and public sector governance leading adoption.
In financial services, SBI Card used AI to optimize cross-sell strategies and improve customer segmentation. ICICI Lombard deployed AI-powered image processing to speed up motor claims adjudication. Apollo Hospitals, in partnership with Microsoft, built risk-prediction algorithms using anonymized patient data, helping detect chronic conditions earlier. In education, platforms like Byju’s and PhysicsWallah personalized content and assessments through AI, improving learning outcomes for over 40 million students.
State and central governments embedded AI into service delivery platforms. From predictive traffic management in Bengaluru to AI chatbots for farmer queries in Maharashtra, the applications ranged from logistics to agriculture.
Delhi's environmental ministry launched predictive models to forecast air pollution spikes, supporting pre-emptive response measures.
Ecosystem of Players and Platforms
India’s AI economy in 2024 featured a blend of multinational hyperscalers, IT giants, product startups, and academic labs. While AWS, Azure, and Google Cloud led the GenAI infrastructure race, Indian firms complemented them with sector-specific models and services.
Infosys, Wipro, TCS, and HCLTech launched AI lifecycle platforms-covering everything from dataset curation to model monitoring. Infosys Topaz was integrated into customer systems to automate workflows across industries. TCS’s Cognix AI powered decision automation in manufacturing and insurance claims.
Startups formed a critical pillar of the AI growth engine. Yellow.ai led in enterprise conversational AI, while KissanAI developed voice-based advisory tools for farmers in vernacular languages.
Qure.ai scaled globally with its FDA-approved radiology models. In total, over 3,500 Indian AI startups operated in 2024, raising USD 900 million in funding. Investors backed solutions in AI security, industry-specific copilots, and low-code AI deployment platforms.
Government Push and Policy Developments
2024 was the year government intervention in AI moved from policy talk to budgeted execution. The INR 10,300 crore IndiaAI Mission was rolled out, comprising funding for compute infrastructure, AI startup accelerators, and open-source foundational models.
Under this initiative, the IndiaAI Compute platform was launched to democratize GPU access for developers, researchers, and startups. The IndiaAI Innovation Centre began development on multilingual LLMs through the BharatGPT project, with partners including IIT Madras and CDAC. These efforts aimed to reduce India’s dependence on foreign models and address linguistic diversity.
AI was also integrated into various governance initiatives. The Ministry of Education adopted AI-powered early warning systems to track student dropouts. The Ministry of Health expanded TB and cancer screening using AI diagnostics. Agriculture departments deployed satellite-linked AI models to track crop patterns and disease outbreaks.
On the regulatory front, the Digital Personal Data Protection Act (DPDP) enforced stricter consent and data protection norms, especially around algorithmic decision-making. A draft AI governance framework from MeitY proposed mandatory registration for high-risk AI systems, ethical review boards for sensitive sectors, and disclosure norms for AI-generated content.
Research, Academia, and Skilling Initiatives
India ranked third globally in AI research output in 2024, producing over 15,000 peer-reviewed papers. IIT Madras, IISc Bangalore, and IIIT Hyderabad were at the forefront, contributing to fields such as reinforcement learning, quantum ML, and responsible AI.
Several academic institutions also launched dedicated AI departments. IIT Bombay’s Centre for AI in Society began offering dual-degree programs. IISc Bangalore partnered with Google Research to work on federated learning. These initiatives bridged the talent gap, though the demand for skilled AI professionals still outpaced supply.
Skilling remained a national priority. Government initiatives such as NASSCOM’s FutureSkills Prime trained over 250,000 individuals in AI/ML, while platforms like upGrad and Scaler offered industry-recognized certifications.
Specialized skills in AI ethics, MLOps, and large model tuning became increasingly sought after, with salaries for experienced AI engineers surpassing INR 50 lakh annually in some sectors.
Looking Ahead: India’s AI Outlook for 2025
India’s AI ambitions for 2025 are poised around three foundational pillars: accessibility, safety, and innovation. The IndiaAI stack will be expanded to include compute, datasets, and open-source models, ensuring that Indian startups can build sovereign, culturally aligned AI systems.
With multilingualism at the core, over 22 Indian languages are expected to be modeled under BharatGPT. This is likely to transform citizen engagement platforms, rural banking interfaces, and edtech platforms catering to Bharat’s non-English population.
A National AI Governance Board is expected to be constituted in early 2025, empowered to classify, monitor, and guide high-impact AI systems. Guidelines for watermarking AI-generated content, user consent auditing, and impact assessment will shape ethical implementation.
AI’s economic impact is forecast to surpass USD 500 billion by 2025, contributing nearly 10% of India’s GDP. The growth will stem from GenAI adoption by SMBs, AI-enabled ESG reporting, AI-led automation in logistics and agriculture, and AI-enhanced public sector service delivery.
In 2024, India matured from a consumer of AI technologies to a builder and exporter of trusted, inclusive AI platforms. The road to 2025 will define India’s standing in the global AI economy—not merely as a talent hub, but as a thought leader in human-centric, scalable AI innovation.
