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Building India’s AI Future: Industry Adoption and Digital Readiness
Building India’s AI Future: Industry Adoption and Digital Readiness

January 22, 2025

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Organizations in India are increasingly using AI to achieve business growth and competitive differentiation. 

They are applying AI in various areas such as:

Customer service: This includes using AI-powered chatbots and virtual assistants to provide 24/7 support and improve customer experience.

Operations: AI is used to streamline processes, improve efficiency, and reduce costs. Examples include predictive maintenance in manufacturing, inventory optimization in retail, and fraud detection in BFSI.

Decision-making: AI is employed to analyse large datasets and provide insights that can support better and faster decision-making.

These sectors have transitioned to the Expert stage of AI maturity. Several factors contribute to their leadership:

Manufacturing:

Focus on transformation: 39% of manufacturing companies have adopted an enterprise-scale, transformation-led AI strategy aligned with business goals.

Dedicated AI investments: 25% of manufacturing companies have dedicated AI budgets, higher than other sectors. They have also increased AI spending significantly in FY24.

Data standardization: 60% of companies have standardized data at the business unit or enterprise level, facilitating AI implementation.

Telecom, Media and Entertainment (TM&E):

Digital-first nature: This sector is inherently digital, making it more receptive to AI adoption. AI is used extensively in areas like content personalization, network optimization, and customer churn prediction.

Formalized AI governance: TM&E leads in establishing formalized and well-integrated AI ethics, risk, and governance frameworks. This enables responsible and secure AI implementation.

Other sectors demonstrating significant progress in AI adoption include:

Transport and Logistics: This sector exhibits a high rate of use case identification, proof of concept (PoC) development, and productionization.18 It also boasts the highest data standardization rate among all sectors.18

BFSI: This sector is leveraging AI to enhance customer experiences, manage risks, and improve operational efficiency.

Digital Readiness:

India’s digital infrastructure shows great potential to adopt and scale AI,

According to the Oxford Insights, Government AI readiness Index, Indian score is 63.17 and ranks 66th globally in the Data and Infrastructure layer. In the Data Infrastructure layer they have provided the ranking based on telecommunication infrastructure, supercomputers, Broadband quality, 5G Infrastructure, adoption of emerging technologies.  let us look at some of the other reasons as well.

  1. Growing Data Center Industry: India's data center capacity is expanding rapidly, expected to reach 3.29 GW by 2028. The Data Center Industry has secured investments of more than $40Bn from global and domestic investors. Many of the companies such as Yotta, CtrlS Datacenters, Sify, Stt GDC india, Capital Land India, Equinix, Google and AWS are expanding their capacities across different regions in India.
  2. Innovation in Key Sectors: AI adoption is visible across healthcare, BFSI (Banking, Financial Services, and Insurance), and manufacturing. For instance, hospitals are leveraging AI for diagnostics, while manufacturers use AI to optimize supply chains and production.
  3. Natural solar power advantage: India’s abundant sunshine offers unparalleled potential for scaling solar power generation, making it a prime location for energy-intensive AI infrastructure. India’s installed solar capacity has seen a 32 times increase since 2014 thanks to the improved efficiency and affordability of Photovoltaic technology.
  4. Government Policy and Support: Scalable AI computing ecosystem with 10,000 GPUs to be made available for Startups, researchers, students, and academicians for AI Innovation and development. Ministry of Electronics and Information Technology accelerates empanelment of agencies to provide AI Compute and Services for the India AI Mission

Source:

Nasscom AI Adoption Index 2.0

https://www.ibef.org/blogs/booming-data-centre-growth-in-india#:~:text=Overview%20of%20Data%20Centres%20in,to%203.29%20GW%20by%202028.&text=India's%20data%20centre%20market%20value,boasting%20a%20CAGR%20of%2010.98%25.

https://blogs.idc.com/2024/07/26/reimagining-industries-unleashing-the-power-of-ai-in-india/

https://analyticsindiamag.com/ai-mysteries/top-data-centre-projects-in-india/

 


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Madhumay
Deputy Manager - Research

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