According to the report, the Indian AI market is expected to grow at a compound annual growth rate (CAGR) of 25-35% to reach USD 17 billion by 2027.
This growth is being driven by multiple factors, including increasing corporate technology spending, expanding India's AI talent base, and a significant increase in AI investment, the report states, “AI-powered technology services: The future.'' A Roadmap for Prepared Companies: The Role of AI and GenAI in Revitalizing the Industry.” . ”
The Nasscom report in partnership with BCG was launched here on Tuesday on the sidelines of the Nasscom Technology & Leadership Forum 2024.
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Globally, investment in AI has grown at a CAGR of 24% since 2019 and is expected to reach nearly USD 83 billion in 2023, the report said.
According to the report, the majority of investments were made in data analytics, GenAI, and ML algorithms and platforms.
Notably, around 93 per cent of investments by Indian technology services and made-in-India products companies are focused on digital content, data analytics and supply chain, the report said.
As companies increase their technology spending, technology service providers are developing a wide range of innovative AI-based services and solutions, expanding their offerings beyond traditional IT services, the report said.
This includes developing proprietary AI and GenAI platforms, automation tools, data analytics solutions, and bespoke AI applications for specific industries such as healthcare, banking and finance, and retail, the report said.
According to the report, India has the second largest talent base with 420,000 employees working in AI roles.
India also has the highest skill penetration rate, with three times as many people with AI skills than any other country. The country has seen a 14-fold increase in AI-skilled talent over the past seven years, ranking it among the top five countries.
As investments in AI continue to increase, the demand for AI talent in India is also expected to grow at a CAGR of 15% until 2027, said the Nasscom-BCG report, adding that the growth rate of the Indian technology industry is already It added that it was over 15%. AI/ML jobs have been on the rise over the past 12 months, with positions such as AI engineer growing at 67% year-over-year.
Recognizing the importance of human capital in the evolution of AI, leading companies are investing heavily in upskilling and reskilling their workforces in AI and related technologies, with some organizations increasing their skills over the next three years. We are allocating USD 1 billion to UP.
“With the advent of generative AI, Indian tech companies are expanding their portfolios beyond traditional IT and business process management to include AI-driven analytics, intelligent automation and personalized customer interactions,” said Nasscom President said Debjani Ghosh.
These companies aren't just implementing AI. They are redefining their service offerings, creating more value for customers and setting new industry standards, she noted.
Accelerating this step, Ghosh said, requires significant investment in AI skills acquisition, investment in ethical and safe AI development practices and governance frameworks, and prioritizing transparency and human oversight. A fundamental shift to a human-centered approach will be needed.
