India’s AI Opportunity: Market Outlook
By 2028, the global AI software and services market is projected to generate $100-120 billion in revenues for India, equivalent to around half of the country’s current IT services market. This prediction comes from a recent Boston Consulting Group (BCG) report released during the Global Fintech Fest in Mumbai.
The 2–20 Conundrum: Data vs. Infrastructure
India produces nearly 20% of the world's data but holds just 2% of global data center capacity, posing a challenge for scaling AI capabilities. BCG suggests that by 2030, India should aim for 8% of global data center capacity (approximately 17 GW), which will require major investments in real estate and sustainable energy.
Strategic Imperatives: Datasets and Domain-Specific AI
Expansion of AIKosh: India’s national datasets platform, AIKosh, must scale up to cater to domestic and emerging market AI model-building needs.
Sector Prioritization: Building population-scale, domain-specific AI models in healthcare, agriculture, education, and financial inclusion will have far-reaching impacts.
Fintech Growth and AI Momentum
Indian fintechs have grown by 35% over the last two years, and the sector is expected to reach $190 billion by 2030. With the rise of AI, innovation is now a top priority for fintech CXOs, reshaping the competitive landscape nationally and globally.
India’s Unique Global Position
The report highlights three areas where India stands apart:
World’s largest AI consumer market
Global AI use-case playground
India’s combination of scale and execution capability, supported by strong government initiatives like the ‘India AI Mission,’ positions the country as a key player in the AI supercycle.
The Global AI Supercycle
Over the last five years, more than $1.3 trillion has been invested globally in AI—four times the amount in global fintech funding. GenAI tools have achieved unprecedented adoption, reaching 40% penetration among working-age populations within two years. For comparison, the internet took five years to achieve similar reach.
Consequences: Impact and Challenges
Societal Transformation: AI’s influence will extend beyond institutions, affecting daily convenience and business operations across every sector.
Scaling Infrastructure: To fully realize AI’s potential, India must rapidly scale its data center infrastructure and sustainable energy resources.
Inclusive Innovation: Focused development in critical sectors will help ensure that AI becomes a lever for inclusive growth in health, education, finance, and agriculture.
India’s strategic investments and ambitious goals could well make it a decisive leader in the global AI arena, unlocking growth opportunities while pushing for inclusive and sustainable digital transformation.