India’s AI Industry Set to Triple by 2027: A Leap Toward $17 Billion

India’s AI industry is set to triple by 2027, reaching $17 billion, per a Boston Consulting Group (BCG) report. AI has become vital for businesses, driving faster decisions, innovation, and market expansion. With 16% of global AI talent, India's professionals are expected to grow from 600,000 to 1.25 million. Supported by robust digital infrastructure and a thriving startup ecosystem, India is a global AI hub. Success stories include Razorpay, Lenskart, and Pocket FM. BCG emphasizes collaboration, reskilling, and responsible AI for scalable growth.

India’s artificial intelligence (AI) sector is on the cusp of a transformative expansion, with its market value expected to surge to $17 billion by 2027—a staggering threefold increase. This growth, highlighted in a recent report by the Boston Consulting Group (BCG), signals a shift from experimental AI projects to widespread, scalable implementations across industries.

AI: From Optional to Essential

The BCG report underscores a pivotal shift in how businesses perceive AI. As a core business enabler, AI is now driving faster decision-making, fostering innovation, and unlocking new market opportunities. Mandeep Kohli, Managing Director and Partner at BCG India, emphasized, “AI has transitioned from being a choice to a necessity for survival in today’s competitive landscape.” Kohli noted that Indian companies are leveraging AI to bypass conventional growth trajectories, allowing them to compete on a global scale.

A Thriving Talent Pool and AI Ecosystem

India boasts a significant advantage with its robust AI talent pool, which comprises 16% of the global total—second only to the United States. Currently, the country is home to over 600,000 AI professionals, a number expected to double to 1.25 million in the coming years. This rapid expansion is fueled by India’s extensive public digital infrastructure, including initiatives like Aadhaar, Unified Payments Interface (UPI), and the Open Network for Digital Commerce (ONDC). Additionally, the AI startup ecosystem has flourished, with nearly 2,000 new startups emerging in just the past three years.

With over 700 million internet users and accelerating infrastructure development, India is uniquely positioned to become a global hub for scalable AI innovation.

Real-World AI Applications: Case Studies of Success

The report showcases how AI is already reshaping industries through real-world applications. For instance:

• Razorpay: By integrating AI tools, Razorpay has simplified merchant onboarding processes, automating data prefill and validation.

• Lenskart: The eyewear giant employs AI for virtual try-ons and facial mapping, enhancing customer experiences.

• Pocket FM: Through AI, Pocket FM has slashed content production costs by 90%, creating over 100,000 hours of audio content.

• NoBroker: The real estate platform uses AI-powered image verification (Iris) to streamline property listing processes.

These examples highlight the tangible benefits of AI in improving efficiency and reducing costs across sectors.

The Path to Scaling AI: A Strategic Framework

To sustain this momentum, BCG recommends adopting its 70/20/10 framework, which emphasizes that 70% of AI success relies on people, organizational structure, and processes, rather than just technology. The report identifies five critical enablers for scaling AI:

1. Cross-Functional Collaboration: Encouraging teamwork across departments to drive innovation.

2. Modern Tech Stacks: Updating infrastructure and tools to support advanced AI capabilities.

3. Centres of Excellence: Establishing dedicated teams to champion AI initiatives.

4. Reskilling Initiatives: Upskilling employees to adapt to AI-driven workflows.

5. Responsible AI Governance: Ensuring ethical and transparent AI usage.

   
   

Additionally, BCG emphasizes the importance of behavioral change in AI adoption. Techniques like emotional curve mapping and targeted role-based interventions can help ease the transition to using generative AI tools.

India’s AI Future: A Global Opportunity

With its combination of talent, infrastructure, and innovation, India is poised to become a leader in the global AI landscape. As businesses increasingly integrate AI into their operations, the country’s potential to revolutionize industries and redefine market dynamics is immense.

The next few years will be pivotal as India moves from being a participant in the AI revolution to becoming one of its foremost leaders.