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India’s AI Revolution : An Enabler to Viksit Bharat by 2047
1. AI-Driven Viksit Bharat by 2047: India's Strategic Integration of Artificial Intelligence (AI)
Under the visionary leadership of Hon'ble Prime Minister, Mr. Narendra Modi, India is undergoing a significant AI transformation, aligning with the vision of Viksit Bharat by 2047. The government's proactive policies have strengthened the country's AI ecosystem, empowering students, startups, and innovators with world-class AI infrastructure, fostering a truly level playing field. Initiatives such as the IndiaAI Mission and the establishment of Centres of Excellence for AI are strengthening the country's AI ecosystem, paving the way for innovation and self-reliance in this critical sector.
2. AI Compute and Semiconductor Infrastructure
Under the C10,300 crore IndiaAI Mission (2024), India is building one of the world's largest AI compute infrastructures with 18,693 Graphics Processing Units (GPUs), nearly nine times of open-source AI model DeepSeek capacity and two-thirds of what ChatGPT operates on.
• Scaling Compute Access: 10,000 GPUs are already deployed; the rest to follow soon. Compute access priced at just C100/hour, versus $2.5–$3/hour globally.
• Democratizing AI: An open GPU marketplace gives startups, researchers, and students' affordable access to high-performance computing.
• Robust Supply Chain: 10 companies selected to ensure steady GPU supply ensuring a robust and diversified supply chain.
• Indigenous GPU Capabilities: India plans to develop its own indigenous GPUs within next three to five years reducing reliance on imported technology.
• Semiconductor Push: Five semiconductor plants are under construction, boosting self-reliance and supporting AI innovation.
3. AI Adoption & Industry Growth
India's Generative AI ecosystem is scaling rapidly, moving from pilots to production-ready solutions despite global headwinds.
• Businesses Prioritising AI Investments: According to BCG, 80% of Indian companies consider AI as a core strategic priority, surpassing the global average of 75%. Additionally, 69% plan to increase their tech investments in 2025, with one-third allocating over USD 25 million to AI initiatives.
AI has the powerto unlock unprecedented productivity and innovation across all industries.
• GenAI Startup Funding: According to a November 2024 report by National Association of Software and Service Companies (NASSCOM), Indian GenAI startup funding surged over six times quarter-on-quarter, reaching USD 51 million in Q2FY2025, driven by B2B and agentic AI startups.
• AI in Workplaces: Seven in 10 Indian employees used AI at work in 2024, up from five in 10 a year earlier, showcasing AI's rapid integration into workplaces.
• Small and Medium Businesses (SMBs) Impact: 78% of Indian SMBs using AI reported revenue growth, while 93% stated AI has contributed to increased revenues.
• Market Expansion: India's AI market is set to grow at 25–35% CAGR, fueling potential in innovation and job creation.
• AI Startup Support Ecosystem: India ranks 3rd globally in tech incubators (520+), with accelerators like T-Hub MATH supported over 60 startups in early 2024.
4. AI Regulatory Framework
Current Status of AI Regulation in India
• India currently lacks a comprehensive AI-specific law. Existing regulations, such as the Information Technology Act, 2000, the Digital Personal Data Protection Act, 2023, and the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, provide oversight but do not fully address AI-specific concerns such as algorithmic bias, data misuse and accountability.
• According to a National Association of Software and Service Companies (NASSCOM) report, the adoption of AI and data utilization strategy can add $500 billion to India's GDP by 2025, making a clear regulatory framework essential.
• The lack of specific AI laws raises critical questions about data security, accountability for AI-driven decisions, and intellectual property rights in cases of AI-generated content.
Key Laws Governing AI in India
• Information Technology Act, 2000: Governs cyber activities including AI when it overlaps with data or cybersecurity.
• National Strategy for Artificial Intelligence (2018): Launched by NITI Aayog, this strategy focuses on sectors like healthcare, education, agriculture, smart cities, and transportation, emphasizing inclusive AI development under the initiative #AIForAll.
• Principles for Responsible AI (2021): These principles guide AI development with a focus on ethical considerations, including transparency, accountability, and inclusivity.
• Draft National Data Governance Framework Policy (2022): Aims to modernize government data collection and management to foster AIdriven research and startups through a comprehensive dataset repository.
• Digital Personal Data Protection Act, 2023: A comprehensive framework for protecting and handling personal data in India.
Future Perspectives
India's AI regulatory landscape is progressing through a combination of existing laws and government initiatives. However, the development of comprehensive AI-specific regulatory framework is essential to address the unique challenges posed by AI technologies.
5. Advancing AI with Open Data and Centres of Excellence (CoE)
• The government has launched the IndiaAI Dataset Platform to provide seamless access to anonymized high-quality, non-personal datasets empowering Indian startups and researchers to develop advanced AI applications across sectors.
• Three AI CoE have been set up in Healthcare, Agriculture, and Sustainable Cities in New Delhi, with a fourth in Education announced in Budget 2025 (C500 crore outlay).
• Additionally, five National Skilling CoEs which will equip youth with industry-relevant expertise will be established. These centres will be set up in collaboration with global partners to equip youth with AI expertise, supporting the 'Make for India, Make for the World' vision in manufacturing and AI innovation.
6. AI Integration with Digital Public Infrastructure (DPI)
• AI is enhancing platforms like Aadhaar, UPI, and DigiLocker. India's DPI model gained “global interest at the G20 Summit. Japan granted patent to India's UPI payment system further underscores its scalability.
• At Mahakumbh (an important Hindu pilgrimage) 2025, AI tools managed world's largest human gathering, offered multilingual chatbot support, and integrated with Indian Railways and UP Police.
7. AI Talent & Workforce Development
• Under the IndiaAI Future Skills initiative, AI education is being expanded across undergraduate, postgraduate, and Ph.D. programs. Data and AI Labs are being established in Tier 2/3 cities to enhance accessibility.
• According to the Stanford AI Index 2024, India ranks first globally in AI skill penetration.
• India is home to 16% of the world's AI talent, showcasing its growing influence in AI innovation and adoption.
• The AI-skilled workforce has seen a 14-fold increase from 2016 to 2023, making India one of the top five fastest-growing AI talent hubs. The demand for AI professionals in India is projected to reach 1 million by 2026.
8. India's AI Models & Language Technologies
India is developing indigenous Large Language Models (LLMs) and Small Language Models (SLMs) tailored to Indian needs.
• Digital India BHASHINI: An AI-led language translation platform for multilingual internet access.
• BharatGen: World's first government-funded multimodal LLMs to enhance public service delivery and citizen engagement through foundational models in language, speech, and computer vision.
• Sarvam-1AI Model: LLMs having 2 billion parameters supporting ten major Indian languages, designed for applications such as language translation, text summarisation, and content generation.
• Chitralekha & Everest 1.0: Video transcreation platform developed by AI4Bhārat to enable users to generate and edit audio transcripts in various Indic languages.
• Hanooman's Everest 1.0: A multilingual AI system developed by SLMs, Everest 1.0 supports 35 Indian languages, with plans to expand to 90.
Conclusion
India's AI roadmap is not just about technology, it's about inclusive progress and global leadership. With a clear vision for the future, India is set to become a leader in AI innovation, shaping the global AI landscape in the years to come.
Compiled by:
Board Research & Advisory Team
Institute of Directors
For more exclusive IOD insights, visit:
https://www.iodglobal.com/blog/category/iod-insights
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Institute of Directors India
Bringing a Silent Revolution through the Boardroom
Institute of Directors (IOD) is an apex national association of Corporate Directors under the India's 'Societies Registration Act XXI of 1860'. Currently it is associated with over 30,000 senior executives from Govt, PSU and Private organizations of India and abroad.
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