Charting a Unique Trajectory: India's Inclusive Artificial Intelligence Story India stands at the cusp of an Artificial Intelligence (AI) revolution, one that is uniquely shaped by its scale, diversity, and developmental priorities. As global competition for AI leadership intensifies, India is crafting its own roadmap, one that combines cutting-edge innovation with deep social impact, while positioning the country as a hub for global AI services, infrastructure, and talent.
The Services Backbone: India's Global Edge
At the heart of India's AI surge is its formidable IT services industry. Employing nearly 6 million professionals and contributing about 7% to India's GDP, this sector is a cornerstone of the nation's economy. It accounts for nearly a quarter of India's total exports and has been quick to embrace AI and generative AI (GenAI).1
Global IT services firms such as Accenture and Capgemini, along with Indian ones like Tata Consultancy Services (TCS), Infosys, and Wipro are leveraging India operations to build and scale AI solutions for global clients. For instance, Accenture's India centers have been instrumental in developing AI-powered tools across supply chain, finance, and customer service domains—part of the firm's broader $3 billion investment in AI. Capgemini's Applied Innovation Exchange in India serves as a hub for developing GenAI use cases across manufacturing and life sciences, in collaboration with Indian startups and universities. Strategic alliances have further accelerated this trend - TCS has partnered with Nvidia to launch AI offerings across industries like telecom and autonomous vehicles, while Infosys has collaborated with the University of Cambridge to establish an AI lab in London.2, 3
These companies are also investing heavily in AI skilling and training programs in collaboration with academia, preparing India's vast technical workforce for the AI-driven future.
Cloud Infrastructure: Building the Computational Core
AI's rapid evolution hinges on the availability of massive computational power, and cloud service providers, also known as Hyperscalers, form the infrastructural bedrock of this transformation.
Global hyperscalers like Amazon Web Services (AWS), Microsoft Azure, and Google Cloud dominate 65% of the global market and are investing billions in India to expand AI-ready data center capacity. Microsoft alone is expected to invest over USD 80 billion in building AI data centers globally.4 In India, the growth is equally robust - data center capacity is projected to rise from 1.2 GW today to over 5 GW by 2030, potentially making India the second-largest data center base in the Asia-Pacific region.
While the growth of cloud services is led by the global Hyperscalers, Indian players like Sify, Nxtra, and CtrlS are top providers of data center infrastructure to the Hyperscalers. In addition, Yotta and Sify are also entering the cloud services space, leveraging their expertise in IT infrastructure to compete in AI-driven workloads. These developments ensure that India's AI ecosystem is supported by a strong and growing computational backbone.
Startups and Innovation: The AI Application Layer
India's vibrant startup ecosystem, the third largest in the world, is rapidly adapting to the AI opportunity. Since 2020, over 140 GenAI startups have raised cumulative funding of USD 1.5 billion.5 These startups are solving real-world problems across customer service, coding, design, healthcare, and education.
Some exciting standout startups:
- Spyne (Gurugram): A visual merchandising platform that automates automotive listings with high-quality images, 360° spins, and video tours. Raised USD 23 million in funding.
- Qure.ai (Mumbai): A leader in AI-powered radiology diagnostics, offering CT, X-ray, and MRI-based solutions for tuberculosis, stroke, and lung cancer detection. Raised USD 125 million.
This innovation is not just disruptive, it's inclusive. Many Indian GenAI startups are building solutions tailored for local languages, rural populations, and the unique challenges of developing economies.
Foundation Models and Indian Languages: The Next Frontier
India's linguistic diversity poses both a challenge and an opportunity. With over 22 official languages and hundreds of dialects, building foundational AI models that understand and generate Indian languages is critical.
Recognizing this, several initiatives have emerged:
- Sarvam AI, Soket AI Labs, Gan.ai and Gnani.ai are building large language models (LLMs) specifically tailored for Indian contexts.6
- AI4Bharat, an IIT Madras initiative, has released open-source models in multiple Indian languages.
- Bhashini, under the Ministry of Electronics and IT (MeitY), aims to democratize access to digital services by enabling multilingual AI interfaces.
- BharatGPT, being developed under the IndiaAI mission, seeks to be the country's foundational GenAI model, optimized for governance, education, healthcare, and more.
These efforts are about more than just technological sovereignty; they aim to bring the benefits of AI to a billion Indians, including those currently underserved by English-first systems.
Policy and Public Infrastructure: Enabling IndiaAI
The Government of India has taken bold steps to catalyze the AI revolution through the proposed USD 1.2 Billion IndiaAI Mission. Anchored by the Ministry of Electronics and Information Technology (MeitY), this mission will support:
- Public digital infrastructure for AI development
- Startup funding and ecosystem support
- AI skilling initiatives and creation of a datasets platform
The IndiaAI mission reflects a broader trend in India's digital strategy: investing in open, scalable infrastructure, much like UPI and Aadhaar, to unleash private sector innovation and public value.7
India's AI Potential: A Magnet for Global Investors
India's AI momentum is drawing increasing interest from global investors—particularly in the data center and Global Capability Center (GCC) sectors. By 2030, AI workloads will account for nearly 40% of data center demand globally, and India is on a parallel trajectory. In just two years, the country has scaled from fewer than 1,000 GPUs to over 34,000. This growth trajectory is translating into real investments: global leaders like ST Telemedia and NTT Data have committed to building AI-optimized data centers in India, while several other hyperscalers and data center operators are actively developing India entry/expansion strategies.8
The GCC landscape is also being reshaped by India's AI capabilities. With over 1,700 GCCs already operating in India, the country has become a global hub for AI-driven innovation. These centers are increasingly moving beyond traditional support functions to build and deploy AI products for global markets. For instance, SAP Labs India has developed ‘Joule,' a GenAI-powered copilot designed to enhance productivity across SAP's cloud applications. Beyond product development, many GCCs are embedding themselves deeper into the Indian ecosystem through strategic partnerships—with startups, academia, and technology providers. Citi's innovation labs in India collaborate with fintech startups to co-develop AI-driven credit models and blockchain payment solutions.9
At Invest India, we actively support global leaders in evaluating India as a destination for their data center or global capability center investments. Our teams of sectoral experts help these companies build a business case for setting up shop in India and our state teams support these companies in project execution – finalising and acquiring land, getting all the necessary approvals and finding the right partners to unlock joint growth.
The Road Ahead
India's AI ecosystem is still evolving, but the foundation is strong. With a thriving IT services sector, rising data center infrastructure, a buzzing startup scene, and a growing base of homegrown AI models, the country is poised to become both a global delivery hub and a domestic innovation powerhouse.
The challenge now is scale: making AI affordable, multilingual, and accessible for a billion Indians. If India can get that right, it won't just participate in the AI race, it will define a new, inclusive model of technological transformation for the world.
This blog is written by Soumil Gupta
