According to a joint report by Nasscom and EY, India’s artificial intelligence (AI) market is growing rapidly, with an expected annual growth rate of 25-35 per cent over the next few years. India’s AI adoption index is 2.47 out of 4 in 2024, showing a slight increase from 2.45 in 2022.
As per the report, 87 per cent companies are in the middle stages of AI adoption, classified as enthusiast and expert adopters. The number of companies in the expert stage, particularly in the manufacturing, telecommunications, media, and entertainment sectors, has doubled in 2024 as compared to 2022. This stage represents the next level of maturity after enthusiast.
The report mentioned that 75 per cent companies have an AI strategy in place at proof-of-concept (PoC) stage, and 40 per cent companies are successfully moving from PoC to full-scale production. Meanwhile, AI is becoming easier to use across various products and services, especially with the rise of generative AI (GenAI), which is making AI more accessible to non-technology (tech) users. The availability of AI tools as cloud services and AI-integrated products is also boosting AI usage. This rise in AI adoption is fuelled by the IndiaAI mission, the tech services industry, startups, and a strong talent pool. Further, improved digital infrastructure and increased use of digital technologies are also major factors, with 70 per cent companies now spending over 20 per cent of their information technology (IT) budgets on digital advancements.
The report highlighted that to transition India from AI-ready to AI-first, large enterprises should prioritise data standardisation, establishing strategic partnerships for swift PoC-to-production transitions, and balancing AI uses for both efficiency and innovation, while carefully managing AI risks and integrating sustainability into their AI strategies. Moreover, small and medium-sized businesses (SMBs) must focus on contextual use cases, explore partnerships with tech SMBs to jumpstart AI initiatives, ensure strong leadership commitment, understand data regulations, and foster peer learning to overcome adoption barriers.
