India’s AI Market to Triple to $17 Billion by 2027, Driven by Skill Rise and Public Tech Facilities
India’s artificial intelligence market is forecast to reach $17 billion by 2027, tripling from present levels as businesses shift from speculative pilots to major releases, according to a report by BCG. With the second-largest AI skill pool globally, robust public digital facilities, and a growing start-up community, India is rapidly becoming a global AI development center.
India’s artificial intelligence (AI) market is set to triple in value to $17 billion by 2027, as the country transitions from testing technologies to deploying them at scale across industries, according to a report by Boston Consulting Group (BCG). The transformation is being fueled by increased enterprise adoption, a growing pool of AI professionals, and a strong digital public infrastructure that continues to expand nationwide.
“AI is no longer a luxury but a necessity,” said Mandeep Kohli, Managing Director and Partner at BCG India, in a statement reported by ANI. He noted that Indian businesses are now leveraging AI to leapfrog traditional growth stages and secure a competitive global position. The BCG report outlines how India is leading the way in AI adoption:
- Who: Indian enterprises, startups, and tech specialists
- What: Scaling AI adoption across sectors, tripling market size
- When: By 2027, with active growth observed in recent years
- Where: Across India, spanning fintech, retail, proptech, and media sectors
- How: Through digital infrastructure (like Aadhaar, UPI, ONDC), large-scale skill development, and enterprise-scale implementation strategies
Talent Surge and Tech Infrastructure
India currently contributes 16 percent of the global AI skill base, second only to the United States, with over 600,000 AI professionals. This number is projected to double to 1.25 million within 2 years, according to the report. The growth is linked to India’s world-leading public digital platforms, including Aadhaar, Unified Payments Interface (UPI), and the Open Network for Digital Commerce (ONDC).
Over 2,000 AI startups have emerged in India in the past 3 years, supported by a digital ecosystem encompassing more than 700 million internet users. These startups and tech platforms are catalyzing AI-led innovations across sectors such as fintech, e-commerce, real estate, and entertainment.
AI in Practice: Sectoral Case Studies
The BCG study also highlighted successful AI deployments by Indian companies:
- Razorpay uses AI for seamless merchant onboarding by verifying data through autofill tools.
- Lenskart employs facial mapping and virtual try-on features powered by AI to enhance customer experience.
- Pocket FM has utilized generative AI to reduce content production costs by 90%, generating over 100,000 hours of audio.
- NoBroker has adopted AI image verification (via its Iris tool) to expedite property listings.
These examples demonstrate AI’s tangible value in enhancing operational efficiency, customer engagement, and cost optimization.
Strategic Framework for AI Scale-Up
BCG recommends a 70/20/10 model for effective AI scale-up:
- 70% of outcomes depend on organizational structure, human capital, and operational processes.
- 20% hinges on data and technological infrastructure.
- 10% relates to algorithm and model sophistication.
- Cross-functional collaboration
- Modern technology stacks
- Centers of Excellence for AI
- Reskilling and capacity building
- Responsible and ethical AI governance
Five key enablers were identified:
Behavioral change is also deemed crucial. Tools such as emotional curve mapping and role-based interventions can facilitate the transition to generative AI platforms, the report stated.
Implications for Business and Policy
As India solidifies its position as a global AI powerhouse, the sector presents a vast opportunity not only for profits but for digital empowerment, job creation, and global competitiveness. Policy support, ethical frameworks, and ecosystem-level collaboration will be crucial to navigate this rapid expansion responsibly. India’s AI journey is no longer experimental– it is strategic, systematic, and already delivering tangible returns.
