India's AI market to triple, reach $17 billion by 2027: BCG report

A Boston Consulting Group report attributes India's AI surge to rising tech investment, a strong digital ecosystem, demographic edge, and robust data infrastructure

India’s domestic artificial intelligence (AI) market is projected to more than triple to $17 billion by 2027, making it one of the fastest-growing AI economies globally, according to a Boston Consulting Group (BCG) report released on Tuesday.

 

The report, titled India’s AI Leap: BCG Perspective on Emerging Challengers, said this momentum is driven by rising enterprise tech investments, a thriving digital ecosystem, and a robust talent base.

 

“India is no exception—businesses across sectors are rapidly embracing AI to solve local challenges, scale innovation, and drive competitive advantage. AI is significantly expanding the total addressable market (TAM) by 1.2 to 1.5 times across key Indian sectors, while delivering unmatched efficiencies and speed,” the report said.

 

 

Additionally, India already has over 600,000 AI professionals, with the number expected to double to 1.25 million by 2027, the report noted. The country accounts for 16 per cent of the global AI talent pool, second only to the United States—a reflection of both its demographic advantage and science, technology, engineering, and mathematics (STEM) education pipeline. 

 

Beyond talent, India’s public platforms—such as Aadhaar, UPI, DigiLocker, and the Open Network for Digital Commerce (ONDC)—create a scalable foundation for AI adoption across sectors. With over 700 million internet users and widespread smartphone penetration, India generates massive volumes of data, which is essential for training AI models. This scale, combined with open architecture, is enabling the development of population-scale AI solutions.

 

The report also highlighted that AI is driving significant activity across the business landscape, cutting across sectors like finance, healthcare, media, retail, and real estate. “We’re no longer in the realm of hype; real traction is visible, real outcomes are emerging, and serious dollars are starting to flow. AI is not a side project—it’s the next growth engine,” it said.

 

“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.