India’s AI boom: Leading in talent, innovation, and market growth for a global AI future

View of the logo of the Artificial Intelligence (AI) Action Summit at the Grand Palais in Paris

India is undergoing a rapid transformation in artificial intelligence, positioning itself as a global leader in AI talent, innovation, and market expansion. With a strong push from both government initiatives and industry-driven advancements, AI is being integrated across sectors, fostering new opportunities for businesses, researchers, and professionals.

Expanding AI education and skill development

Through the IndiaAI Future Skills initiative, AI education is being integrated into undergraduate, postgraduate, and Ph.D. programs, with dedicated fellowships for scholars in top research institutions. To make AI learning more inclusive, Data and AI Labs are being set up in Tier 2 and Tier 3 cities, ensuring wider accessibility to AI training.

India ranks first globally in AI skill penetration, according to the Stanford AI Index 2024, surpassing the US and Germany, with a 263% rise in AI talent concentration since 2016. India also leads in AI skill penetration for women, further bridging gender disparities in tech.

AI innovation and market growth

India is emerging as a major hub for AI-driven innovation, ranking second in public generative AI projects on GitHub and housing 16% of the world’s AI talent. The India Skills Report 2024 projects that India's AI industry will reach USD 28.8 billion by 2025, growing at a CAGR of 45%. The country is among the top five fastest-growing AI talent hubs alongside Singapore, Finland, Ireland, and Canada, with a projected demand for one million AI professionals by 2026.

Rise of India's generative AI ecosystem

Despite a global economic downturn, India’s generative AI ecosystem has seen remarkable growth. According to a NASSCOM report, Indian GenAI startup funding reached USD 51 million in Q2 FY2025, marking a six-fold increase quarter-on-quarter, driven by B2B and agentic AI startups. This growth highlights India's shift from experimental AI applications to scalable, production-ready solutions.

AI adoption across industries

India is leading in AI adoption, with 80% of companies identifying AI as a core strategic priority, surpassing the global average of 75%, according to a BCG report. More than two-thirds of Indian companies plan to increase tech investments in 2025, with a third allocating over USD 25 million to AI initiatives. Workplace adoption is also growing, with 70% of employees using AI at work in 2024, compared to 50% in the previous year.

AI’s impact on small and medium businesses

AI-driven technologies are helping small and medium businesses scale operations and optimize efficiency. According to a Salesforce report, 78% of Indian SMBs using AI reported revenue growth, while 93% said AI has contributed to increased business efficiency.

Expanding AI startup ecosystem

India is home to over 520 tech incubators and accelerators, making it the third-largest startup ecosystem globally. Nearly half of these programs have been established in the past five years to meet the growing demand for AI-driven startups. Programs like T-Hub MATH are actively supporting AI startups by providing mentorship and funding opportunities, helping to scale AI-driven innovation in India.

With rapid advancements in AI talent development, innovation, and adoption, India is positioning itself as a global AI powerhouse. Government policies, industry investments, and a thriving startup ecosystem are driving AI-led transformation across multiple sectors, making AI a key enabler of India's future economic and technological growth.