India’s AI market sets to touch $17 billion by 2027: Nasscom

Bengaluru, 21 February: India’s AI (artificial intelligence) market is projected to reach around $17 billion by 2027, growing at a CAGR of 25-35 per cent, a report by BCG and IT industry apex body Nasscom said.

AI and ML (machine learning) emerged as the top category of IT spending expected to be made by IT buyers in 2023. This growth was fuelled by multiple factors on the back of increasing enterprise technology spending, India’s growing AI talent base and a significant increase in AI investments, the report added.

As the investments in AI continue to increase, the demand for AI talent in India is also expected to grow at 15 per cent CAGR by 2027. The report, titled ‘AI Powered Tech Services: A Roadmap for Future Ready Firms; AI & GenAI's Role in Turbocharging the Industry’was launched on the sidelines of the Nasscom Technology & Leadership Forum 2024.

The report said that India today has the second highest installed talent base with 420,000 employees working in AI job functions. India also has the highest skills penetration with three times more AI-skilled talent than other countries.

According to the report, India has emerged as one of the top nations with rich AI talent base. It ranks among the top five nations with a 14 times growth in individuals skilled with AI in the last 7 years, it noted.

As demand for AI grows across enterprises, India’s technology industry has already been seeing more than 15 per cent growth in AI&ML jobs over the past 12 months with positions such as AI engineers growing at 67 per cent year-on-year.

Recognising the importance of human capital in the AI journey, leading firms have invested heavily in upskilling and reskilling their workforce in AI and related technologies, with some organizations allocating $1 billion over the next 3 years dedicated to upskilling, the report said.