India's artificial intelligence (AI) market is gearing up for a dramatic expansion, with its size expected to surge past $17 billion by 2027—more than tripling its current scale. This transformation is being driven by rising enterprise investments, a rapidly growing digital ecosystem, and a robust base of skilled professionals, according to a new report by the Boston Consulting Group (BCG).

India’s Strategic Advantage in AI Talent

As per the BCG report titled “India’s AI Leap: BCG Perspective on Emerging Challengers,” India is home to 16 per cent of the world’s AI talent, ranking just behind the United States. This significant share highlights the country’s demographic strength and the outcomes of a strong science, technology, engineering, and mathematics (STEM) education system. The nation currently boasts over 600,000 AI professionals—a figure that continues to rise with demand.

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Thriving Ecosystem & Digital Infra

India’s AI landscape has witnessed remarkable activity in recent years, with more than 2,000 AI startups launched in the past three years. The country also supports over 700 million internet users, creating an environment rich in data, an essential resource for training and improving AI models.

Public digital infrastructure has played a vital role in enabling this AI momentum. Frameworks like Aadhaar, UPI, DigiLocker, and the Open Network for Digital Commerce (ONDC) have provided scalable, open-architecture platforms that can be integrated across industries. BCG notes that this digital maturity is helping India build population-scale AI applications across sectors, from finance to healthcare and beyond.

Massive Data Centre Expansion

Looking ahead, India is expected to add 45 new data centres in 2025, adding 1,015 MW to its existing capacity across 152 centres. This infrastructure expansion will serve as a backbone for the country’s growing AI ambitions.The Indian government’s IndiaAI initiative is another pivotal factor in this growth story. Backed by over ₹10,000 crore in funding, the initiative will establish a national AI compute infrastructure, giving researchers and developers access to more than 10,000 GPUs. This is expected to accelerate innovation and AI adoption in both the public and private sectors.

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AI: From Advantage to Necessity

According to Mandeep Kohli, Managing Director and Partner at BCG India, AI has evolved from a strategic advantage to an operational necessity. "AI is no longer an option but a business necessity. Indian companies are using it to leapfrog traditional growth curves and compete confidently on the global stage," he said. Kohli added that while deploying AI at scale poses challenges, the potential payoffs are even greater. "What separates the leaders is not just the tech, but how they manage change, build talent, and embed AI into the fabric of their organisation," he noted.