Topics In Demand
Notification
New

No notification found.

 AI Readiness in India: Progress, Pitfalls, and the Path to Global Leadership
AI Readiness in India: Progress, Pitfalls, and the Path to Global Leadership

April 28, 2025

9

0

India has advanced across the boundaries of technology in the world. From 48th in 2022, it jumped to 36th in 2024 on the UNCTAD Frontier Technologies Readiness Index: Evidence of its plans to become a major player in Artificial Intelligence (AI) development. National private investments in AI reached $1.4 billion in 2023, making India 10th worldwide in investment amounts—the buzz is indeed palpable. But then, as the world rushes toward an AI-driven future, the question is: Is the Indian industry really equipped to harness this transformative force?

Government Catalysts: Building the Foundation

The Union Budget of 2025-26 represented a landmark moment for AI in India with the allocation of ₹2,000 crore to the India AI Mission. This initiative includes the establishment of 20 AI curation units in ministries, 80 AI labs in the country, and support for 25 deep-tech startups. Backed by ₹500 crores in funding, the AI Centre of Excellence is emerging as a hub for education and talent development. It conveniently aligns with several initiatives intended to boost semiconductor manufacturing and data infrastructure necessary prerequisites for AI.

The Digital Personal Data Protection Law of 2023 further illustrates similar intents that India has undertaken in establishing a balance between innovation and ethical governance.

While these measures lay a robust groundwork, experts argue that sustained investment and policy agility are needed to compete with leaders like the U.S. and China, which dominate AI funding at $67 billion and $7.8 billion, respectively.

Private Sector Adoption: Enthusiasm Meets Execution Gaps

Indian corporations are not holding back. According to a study commissioned by IBM, an impressive 97% of surveyed Indian organizations plan to either increase or maintain their investment in AI in 2025—surpassing the global average.

The IT, banking, healthcare, and telecom sectors are rapidly exploring AI for various decisions, including customer analytics and predictive maintenance. For example, VIL collects, categorizes, and processes 45 billion data points per day using AI-enabled systems in their networks, affecting everything from operations to customer experiences.

On the ground, however, execution is way behind intent, as per NTT DATA’s latest research:

●      95% of Indian firms surveyed say they have a defined Gen AI strategy, but 37% admit it sits in a silo away from the larger business goals.

●      AI team formation was reported by only 67% of firms, compared to 83% in global surveys.

●      Legacy infrastructure adds fuel to the fire, with 87% citing these reasons: outdated systems and cybersecurity concerns as barriers to adoption.

India's AI ambitions face a conflicting paradox of resource capacity. A report from BCG found that Indian companies are only half-starved for access to AI expertise, with companies spending a lot of money in 2022 to recruit AI talent (with salary increases as high as 40% in sectors like technology).

Jobs for more advanced AI-developer skills and retraining are rarely available. Companies are investing in upskilling in-house: VIL boasts that 100% of its employees completed GenAI courses on Coursera or similar.

The talent gap we see here—a reflection of historical, systemic failure—will not resolve itself. The education, research, and development systems in India will need to change to elevate the status of specialists who can drive new AI innovations and not simply support them.

 

Sector Spotlight: Telecom as an AI Vanguard

The telecom industry showcases the promise of AI and its significant infrastructure requirements. The growth of data consumption has been astounding—21GB per user per month in 2024, a 21x increase since 2017—driven by 5G deployment and 69% internet access.

One of the leading telecom companies leveraged its AI ecosystem to process around 5 billion call detail records each day and reduce costs by 2-5% while simultaneously increasing revenue by 2-4% using predictive analytics.

Edge computing and AIoT (AI-enabled Internet of Things) are both starting to enable smart cities and smart health care solutions—including telehealth, which demonstrates the melding of technologies within industries. Still, the level of readiness in the telecom sector will depend on which 5G can scale, as well as the adoption of cloud technology and access to semiconductors—areas where India still trails global peers.

 

Challenges: Beyond Hype to Hard Realities

Despite progress, hurdles persist:

●      Infrastructure Deficits: Aging servers and limited high-performance computing stifle real-time AI deployment.

●      Strategic Misalignment: Many AI projects remain experimental, lacking integration with core business outcomes.

●      Workforce Resistance: Fear of job displacement and skill gaps slow adoption, necessitating cultural shifts.

●      Regulatory Uncertainty: While India’s data protection law is a start, clear guidelines for high-risk AI applications (e.g., healthcare, finance) are pending.

 

The Road Ahead: Collaboration and Foresight

To future-proof its AI journey, India Inc. must:

●      Foster Cross-Sector Collaboration: Shared AI frameworks could prevent silos, enabling sectors like healthcare and logistics to learn from telecom’s data analytics prowess.

●      Prioritize R&D & Education: Expanding STEM programs, industry-academia partnerships, and startup incubators will cultivate homegrown innovation.

●      Modernize Infrastructure: Public-private partnerships could accelerate cloud adoption, semiconductor self-reliance, and 5G penetration.

●      Embrace Ethical AI: Proactive regulation and transparency will build public trust and mitigate risks like bias or privacy breaches.

 

Conclusion: A Cautious Optimism

India’s AI trajectory is promising but uneven. The government and the private sector are taking the right steps to lay the foundations of an AI ecosystem. Whether India can transform from an AI user and adopter, into an AI leader will depend on its ability to close its talent gap, its infrastructure, and its ability to translate strategy into action.

With global competitors intensifying, these next five years are critical. The message is clear: India Inc. is ready for the potential of AI, but readiness for AI requires more than intent; it requires unwavering innovation, investment, and commitment.

Vi Business offers solutions redefining business through AI capabilities across industries:

• Industry 4.0 Solutions integrates 5G, IoT, AI, and Machine Learning to connect human and non-human assets, digitise processes, and enable real-time monitoring.

• Vi Hybrid SD-WAN integrates advanced AI-based security features, offering Indian enterprises a robust defense against the growing threat of cyber-attacks.

• CPaaS & CCaaS solutions powered by AI enhances customer interactions and streamline business operations.  AI helps human experts navigate the complex conversations with customers and escalations are managed automatically for enhanced customer satisfaction thus enhancing operations & efficiency.

Connect with us to explore how Vi Business can collaborate to future-proof your AI journey


That the contents of third-party articles/blogs published here on the website, and the interpretation of all information in the article/blogs such as data, maps, numbers, opinions etc. displayed in the article/blogs and views or the opinions expressed within the content are solely of the author's; and do not reflect the opinions and beliefs of NASSCOM or its affiliates in any manner. NASSCOM does not take any liability w.r.t. content in any manner and will not be liable in any manner whatsoever for any kind of liability arising out of any act, error or omission. The contents of third-party article/blogs published, are provided solely as convenience; and the presence of these articles/blogs should not, under any circumstances, be considered as an endorsement of the contents by NASSCOM in any manner; and if you chose to access these articles/blogs , you do so at your own risk.


Vodafone Idea Business

© Copyright nasscom. All Rights Reserved.