The Indian AI market is witnessing an unparalleled growth trajectory, forecasted to reach USD 5.47 Billion by 20241. Propelled by advancements across various sectors, including gaming, media, entertainment, telecom, healthcare, Edtech, human resources management and many more, AI is not just a technological evolution but a revolution redefining operational paradigms.
India’s commitment to integrating AI is evident in its rapid adoption across verticals. The exponential growth of AI in India can be attributed to a vibrant startup ecosystem, proactive government initiatives, and the recent budget inclusion aimed at fostering innovation. Cities like Bangalore, Hyderabad, and Pune are burgeoning hubs of AI research and development, owing to a conducive policy environment and robust investment in tech startups. The government’s push towards digitization, evidenced by policies like the Digital India initiative, further amplifies AI’s role in national development.
Government Initiatives:
The Union Cabinet approved a Rs 10,371.92 crore ‘India AI mission’ in March 2024 for five years to promote Artificial Intelligence in India. The goal is to create a rich ecosystem for AI innovation that broadens access to computing, enhances the quality of data, fosters the development of homegrown AI technologies, draws in elite talent, fosters collaboration across industries, offers financial backing to startups, drives socially beneficial AI initiatives, and supports the principles of ethical AI. At a macro level, these interventions and commitment strive to secure India’s position on the global AI stage.
Furthermore, plans are in place to set up a National Data Management Office. This office will work in collaboration with numerous government departments and ministries to upgrade data quality and ensure their availability for AI development and application. The primary aim behind these financial injections is to encourage the development of AI-driven applications within the public sector, showcasing a proactive approach to integrating AI into governmental functions.
India is also aiming to develop its own foundational models. “We will be developing our own Indian foundational models. The world is talking about ChatGPT and OpenAI. Based on our own languages and our own India data sets, we expect that as a consequence of India’s AI mission, we will have sovereign AI models that are designed and built in India,” the minister said at a press briefing in Thiruvananthapuram, Kerala.
The role of startups:
Startups in India are increasingly becoming pivotal to the AI landscape, driving innovation and addressing unique challenges. These emerging companies are not only developing cutting-edge AI solutions that span various sectors such as healthcare, education, and financial services but are also attracting significant investment, both domestically and internationally. Their agility and innovative approach allow for rapid adaptation to market needs, making them instrumental in advancing AI technology and its applications. Furthermore, startups are crucial for fostering a culture of research and development within the country, contributing to India’s position as a key player in the global AI domain.
AI regulatory landscape:
India’s approach to AI regulation is gearing up for significant evolution, with a comprehensive regulatory framework expected to be unveiled by mid-2024, similar to European Union AI Act. This framework is designed to harness AI for economic advancement while safeguarding against potential risks. It involves stringent compliance measures for high-risk AI applications, emphasizing data localization and incident response mechanisms. Furthermore, amendments to the IT Act are in progress to address AI-specific challenges, aiming to align India’s digital ecosystem with global ethical and security standards. This development highlights India’s commitment to fostering innovation in AI while ensuring responsible use and deployment.
The Indian organizations are already trying to sync their AI systems to meet the prescribed standards mentioned in EU AI Act, undergo conformity assessments, and implement risk management measures if they are in the higher risk categorisation.
Conclusion:
As India strides into 2024, the AI market’s potential is both vast and varied. In fact, Data and AIÂ could add $450-$500 Bn. to India’s GDP by 20252, reflecting the economic opportunity following this potential. With government and private sector synergies driving AI innovation, the country is poised to lead in crafting AI solutions that not only enhance business efficiency but also address key societal challenges. The journey ahead for AI in India is not without challenges, but with a concerted focus on ethical, inclusive, and sustainable AI development, India is set to redefine global standards in AI excellence.
1 https://www.statista.com/outlook/tmo/artificial-intelligence/india
2 https://nasscom.in/knowledge-center/publications/unlocking-value-data-and-ai-india-opportunity
