India's AI market set to triple, may cross $17 billion by 2027: Report

The Indian AI market is expected to grow to over $17 billion by 2027, more than tripling its current size, driven by increased investments in enterprise technology, a flourishing digital ecosystem, and a strong pool of skilled professionals, according to BCG.

The nation makes up 16 per cent of the world's AI talent, placing it behind only the US, reflecting both its demographic advantage and strong STEM education system.

Boston Consulting Group (BCG), in a report titled "India's AI Leap: BCG Perspective on Emerging Challengers", said India has a thriving AI ecosystem with over 600,000 AI professionals, 700 million internet users, and a surge of AI startups with over 2000 launched in the past three years. 

"India's domestic AI market is projected to more than triple to $17 billion by 2027, making it one of the fastest-growing AI economies globally. This momentum is fuelled by rising enter-prise tech investments, a thriving digital ecosystem, and a robust talent base," the report said.

Beyond talent, India's public digital infrastructures -- such as Aadhaar, UPI, DigiLocker, and the Open Network for Digital Commerce (ONDC) -- provide a robust and scalable base for AI integration across various industries.

With a large base of internet users and extensive smartphone adoption, India generates massive volumes of data, which is the fuel for training AI models.

This scale, BCG said, combined with open architecture, is enabling the development of population-scale AI solutions across sectors. 

India is set to add 45 new data centres in 2025, bringing an extra 1,015 MW of capacity to its existing network of 152 centres.

The government's IndiaAI initiative, with a corpus of over Rs 10,000 crore, will establish national AI compute infrastructure, providing access to over 10,000 GPUs for AI model training and research.

"AI is no longer an option but a business necessity. Indian companies are using it to leapfrog traditional growth curves and compete confidently on the global stage.

"While the hurdle rate for successful deployment is high, the rewards are even higher, and the results speak for themselves. What separates the leaders is not just the tech, but how they manage change, build talent, and embed AI into the fabric of their organisation," said Mandeep Kohli, Managing Director and Partner, BCG India.