India’s AI market set to triple within two years, says report

The Indian AI market could triple in size to over $17 billion by 2027, driven by increased investments in technology, a burgeoning digital ecosystem and a strong pool of skilled professionals, according to a new study.

India has 16% of the world’s AI talent, placing it behind only the US, reflecting both its demographic advantage and strong STEM education system, according to Boston Consulting Group (BCG) research.

The 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 start-ups, with over 2,000 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 enterprise tech investments, a thriving digital ecosystem and a robust talent base,” the report said.

It added that India’s public digital infrastructure provides a robust and scalable base for AI integration across various industries. It also said that with a large base of internet users and extensive smartphone adoption, India generates massive volumes of data, which is the used for training AI models.

India is set to create 45 new data centres in 2025, adding to its existing network of 152 centres, as set out in the government’s IndiaAI initiative.

“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,” said Mandeep Kohli, Managing Director and Partner, BCG India.

“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.”

Government set to help Indian MSMEs improve export sales

The Indian government is considering formulating a scheme to fund the country’s exporters in registering new products in new markets, Commerce and Industry Minister Piyush Goyal has said.

He added that the entire cost of such registration – especially designed for India’s micro, small and medium-sized enterprises (MSMEs) will be funded by the government.

“I am thinking of coming out with a scheme that any MSME that needs to spend any amount of money to register their products anywhere in the world, particularly for new products, new markets, new exporters, the government will fund the whole cost,” Goyal said while addressing business delegation on an official visit to Switzerland. During the trips the minister held meetings with Swiss leaders and companies to boost trade and investments between the two countries.

This scheme is expected to be part of the Export Promotion Mission (EPM), which was announced in the Budget. It could include include easy credit schemes for MSMEs, e-commerce exporters, facilitation of overseas warehousing and global branding initiatives, to tap emerging export opportunities and strengthen trade tools for small businesses.

The country’s total exports of goods and services have increased to $825bn in 2024-25, up from $778bn in the 2023-2024 fiscal year. MSMEs account for more than 40% of the country’s exports.

Goyal also urged the Indian industry to focus on exporting value-added goods and run campaigns for brand building and marketing. “I would urge you to come with an idea for the government to support (exporters) in brand building, in getting registrations around the world,” he said.

The minister added that a number of Free Trade Agreements (FTAs) have been signed and implemented by India with countries, including the UAE and Australia, to provide greater market access to Indian exporters.

And active negotiations for FTAs are ongoing with countries including Oman and New Zealand, as well as the European Union (EU).