Why India Hasn’t Dominated the Global AI Race Yet. But That’s About to Change
India and the Global AI Race: Are We Ready to Lead?
When we talk about Artificial Intelligence (AI) on a global scale, two countries usually dominate the headlines: the United States and China. Home to giants like OpenAI, Google DeepMind, Deepseek, Baidu, Alibaba, and Perplexity, these nations have poured billions into becoming AI superpowers.
But what about India?
With one of the largest tech workforces in the world, a booming startup culture, and a digital-first economy, India should be a frontrunner in AI. Yet, we’re not there—not yet. So, why has India lagged behind, and what’s about to change?
The Talent Is Here. The Ecosystem Is Catching Up.
India produces over 1.5 million engineers every year, and our software developers, machine learning experts, and data scientists are powering innovations at global tech giants like Google, Meta, Microsoft, and Amazon.
The talent is world-class. The potential? Even bigger.
Now, the spotlight is shifting home, and the foundation for a thriving AI and deep tech ecosystem is being laid, step by step.
What’s Changing for the Better?
1. Investors Are Warming Up to Deep Tech
While traditional VC focus has been on fintech, e-commerce, and edtech, we're seeing early signs of a shift. New-age investors are realizing that AI-first startups aren't just moonshots—they're the future.
India’s deep tech scene is getting harder to ignore.
2. New Research Hubs Are Emerging
India may not have a Stanford or MIT yet, but it does have rising powerhouses:
- IIT Madras’ Robert Bosch Centre for Data Science and AI
- IIIT Hyderabad’s Kohli Center on Intelligent Systems
More public-private partnerships and fellowships are being introduced to turn academic curiosity into real-world innovation.
3. Brain Circulation Is Replacing Brain Drain
Yes, many top Indian AI minds currently work abroad—but that’s changing.
- Remote work
- Startup capital flowing in
- Global tech leaders investing in India
Together, these factors are turning the Indian diaspora into a bridge—not a loss.
India’s AI Ecosystem Is Just Getting Started
The road to becoming a deep tech powerhouse isn’t easy, but we’re on it.
With the kind of talent India consistently produces, and with a maturing startup and academic ecosystem, it's only a matter of time before we stop exporting talent and start exporting innovation.
The Game-Changers: India’s AI Success Stories
Despite hurdles, a new wave of Indian AI startups is rising—and they’re global contenders.
InVideo
- Based in: Mumbai
- What it does: Generative AI-powered video creation
- Reach: 7+ million users across 190 countries
- Valuation: $ 300 M+
Yellow.ai
- Based in: Bangalore
- What it does: Conversational AI for customer service
- Clients: Domino’s, Sephora
- Funding: $ 102 M+
Arya.ai
- Specialty: AI infrastructure for banking and insurance
- Use cases: Smart underwriting, claims automation
Entropik
- Focus: Emotion AI using facial recognition, eye-tracking, and EEG
- Use case: Enhancing user experience and advertising
- Funding: $ 25 M+
These are more than just success stories, they’re proof of what’s possible when Indian talent meets opportunity.
India’s AI Market: A Sleeping Giant Ready to Wake
According to NASSCOM, India’s AI market is projected to hit $17 billion by 2027, growing at a 25 %+ CAGR.
Key Sectors AI Will Transform
- Healthcare: Predictive diagnostics, telemedicine
- Agri-tech: Crop monitoring, yield forecasting
- Education: Personalized learning, language localization
- Logistics: Route optimization, demand forecasting
Government-Backed Initiatives
- Bhashini: A multilingual AI platform for real-time translation across Indian languages
- IndiaAI: A national mission to boost AI research, skill development, and infrastructure
What Needs to Happen for India to Lead the AI Race
To truly become a global AI leader, India must align policy, innovation, and infrastructure. Here's what's needed:
Government-Funded AI R&D Programs
- A bold, homegrown DARPA-style initiative focused on long-term AI breakthroughs.
Incentives for Deep Tech Startups
- Tax breaks, R&D grants, patent subsidies—encouraging innovation and risk-taking in core technologies.
Localized, India-Specific Datasets
- Models trained in Indian languages, dialects, and cultural contexts are essential for real-world adoption.
Stronger Industry-Academia Collaboration
- Universities and companies must co-create innovation hubs through joint funding and shared R&D programs.
India’s AI Leap Is Already in Motion
India is no longer a spectator in the AI race. The ingredients are here: talent, ambition, and market scale.
What’s needed now? Collaborative execution.
The next generation of AI unicorns could very well be Made in India. And that future? It’s already in motion.