Is AI Market in India Poised to Stand up to its $26T Growth by India@100?

Artificial Intelligence (AI) has seamlessly integrated into daily life, enhancing productivity in both homes and workplaces by automating repetitive tasks. This shift allows humans to focus on tasks requiring critical thinking and problem-solving, as Bill Gates once said, “The advance of technology is based on making it fit in so that you don’t really even notice it, so it’s part of everyday life.”

India’s rapidly growing economy, the world’s fastest, continues to thrive despite global challenges. By 2027, it aims to be the third-largest economy, banking heavily on AI to reach a $26 trillion future. The AI market in India is expected to grow at a rate of 25-35% annually, with Generation AI likely to make up 33% of this sector. This growth is driven by a robust AI talent pool and substantial investments. Recent headlines like “Threads surpassed 1 million users in just an hour” and “ChatGPT acquired 1 million users in just 5 days” highlight the swift adoption of AI tools, underscoring the need for significant investment in upskilling and reskilling the workforce in AI and related fields.

Companies are investing billions in upskilling and reskilling efforts, focusing on machine learning (ML), Python, and SQL skills. India leads in AI skills penetration, with demand projected to grow at a 15% CAGR until 2027 to meet the expanding AI market, according to the BCG and NASSCOM report.

Sectoral impact and strategic integration

Industries ranging from business services to healthcare are strategically positioned to harness AI’s transformative potential, enhancing productivity, efficiency, and customer experiences. Each sector demonstrates unique opportunities for AI integration:

Manufacturing: AI optimises production processes, reduces downtime, and enhances quality control through predictive analytics. Ecommerce uses AI for personalised shopping experiences and logistics optimisation.

Ecommerce and Logistics: AI-driven insights enable personalised customer experiences, optimise logistics operations, and improve supply chain management.

Agriculture: AI enables precision farming for better productivity and sustainability. Overall, AI revolutionises sectors by boosting efficiency, productivity, and personalised experiences from manufacturing to agriculture.

Evolution of blue-collar jobs in the AI era

While much attention has focused on AI’s impact on white-collar jobs, the approximately 450 million workers in the blue-collar sector are also pivotal. These roles, involving construction, machine operation, fibre optics installation, and electrical repair, possess unique complexities and human interactions that mitigate the immediate threat of AI disruption seen in white-collar professions.

Studies suggest a minimal percentage of blue-collar jobs face potential AI replacement, indicating AI’s role in transformation rather than upheaval within this sector. Nonetheless, regional and industry variations necessitate proactive support measures for affected workers navigating technological shifts.

Governmental initiatives and strategic framework

The Indian government has articulated a comprehensive strategy to foster AI advancement, underscoring its commitment to creating an AI-driven ecosystem conducive to innovation and economic growth:

  • National AI Portal (Indiaai): Central hub offering resources and knowledge for entrepreneurs, professionals, and academics interested in AI.
  • Centres of Excellence: Collaborative platforms bringing together startups, enterprises, and academic institutions to drive AI innovation and address sector-specific challenges.

AI as a foundation of India’s future

India aims to leverage AI’s transformative potential to spur economic growth, boost sectoral efficiencies, and enhance overall quality of life. Key strategies include investing in human capital, accelerating digitisation, and cultivating an innovation-driven culture. These efforts are geared towards realising India’s vision of extensive prosperity under India@100 and positioning the nation as a prominent global player in the AI domain.

AI enables companies to access a broader talent pool. We emphasise acquiring skills over filling predefined roles. Please Contact us for more information.

This article was originally published in India AI.

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Author

Kartik Narayan

CEO, TeamLease Services Limited

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