India’s AI Innings is Gaining Momentum and is Built to Play the Long Game

In the evolving AI landscape of 2025, a crucial shift is underway: enterprises and governments are no longer asking whether to adopt artificial intelligence, but how to deploy it meaningfully, responsibly, and at scale. Despite trailing global leaders in investment, India’s AI story is far from over. As of 2024, India ranked 12th globally in AI funding, reflecting the relatively modest share of global investment despite growing momentum in adoption and innovation. Beneath these figures lies a dynamic ecosystem primed for acceleration, anchored in data, infrastructure, talent, and government focus. The pieces are in place for India to not just catch up, but to innovate in ways uniquely its own.

One of India’s greatest advantages is its expansive digital public infrastructure. With over 1.38 billion Aadhaar IDs, over INR 25 lakh crore in monthly UPI transactions (as of May 2025), and growing networks for digital health records and education credentials, India has amassed unparalleled data assets for AI. These systems offer not just volume, but contextual diversity, spanning languages, socioeconomic groups, and behavioral patterns. As rural broadband accelerates under BharatNet, the foundation for real-world AI deployment is already in place.

This depth of data, coupled with startup momentum, is already generating tangible outcomes. In the first half of 2025 alone, India secured USD 4.8 billion in overall tech startup funding, ranking third globally. While AI-specific investments remain a smaller slice of this pool, the growth in enterprise-grade use cases - from agritech and financial services to conversational AI and enterprise automation - signals a shift from experimentation to scale. Indian startups are building tailored, domain-driven models that solve for local challenges and are increasingly moving from pilots to production across sectors. 

Adoption on the ground further strengthens India’s position. Indian employees are already ahead of many global peers in their regular use of generative AI tools across functions and workflows. While there is work to be done on AI literacy and responsible governance, the workforce is actively engaging with AI across roles, especially in tech, services, and operations. This positions India in the ‘middle overs’ of its AI evolution, where scale, dataset quality, and real-world deployments fuel maturity.

A commonly raised concern of India’s AI ambitions is the lack of domestic chip manufacturing. However, this overlooks the broader shift in the global AI value chain. India’s strengths lie in design talent, systems integration, and a policy-led approach to compute access. The government’s National Semiconductor Mission and IndiaAI compute initiatives are focused on building national capacity for training and deploying large models. This strategic focus around design and compute, rather than full-scale manufacturing, will allow India to establish sovereignty over critical parts of the AI value chain.

Importantly, India's AI story is finding global validation. According to a study by a leading university  , India ranks among the top four ecosystems globally, alongside the U.S., China, and the U.K., when measured across research output, open-source contribution, and startup activity. While headline investments lag those of the U.S. and China, metrics like startup funding, public data infrastructure, and developer activity clearly signal a shift from catching up to scaling up.

What matters most now is not dominance in raw investment, but sustained acceleration in deployment, relevance, and adoption. With deep datasets, thriving developer community, sector-driven startups, and an increasingly AI-native workforce, India is no longer catching up, it is preparing to lead. As demand for AI continues to outpace supply, India is rapidly building the institutional and technological capacity needed to close that gap. Like a cricket team transitioning into its strategic middle innings, India’s AI journey may have started slowly, but its greatest runs lie ahead.