The artificial intelligence (AI) market in India is projected to reach $8 billion by 2025, growing at 40% CAGR from 2020 to 2025. This growth is part of the broader AI boom, a global period of rapid technological advancements with India being pioneer starting in the early 2010s with NLP based Chatbots from Haptik, Corover.ai, Niki.ai and then gaining prominence in the early 2020s based on reinforcement learning, marked by breakthroughs such as generative AI models from Krutrim, Sarvam, CoRover, OpenAI and Alphafold by Google DeepMind. In India, the development of AI has been similarly transformative, with applications in healthcare, finance, and education, bolstered by government initiatives like NITI Aayog's 2018 National Strategy for Artificial Intelligence. Institutions such as the Indian Statistical Institute and the Indian Institute of Science published breakthrough AI research papers and patents. India's transformation to AI is primarily being driven by startups and government initiatives & policies like Digital India. By fostering technological trust through digital public infrastructure, India is tackling socioeconomic issues by taking a bottom-up approach to AI. NASSCOM and Boston Consulting Group estimate that by 2027, India's AI services might be valued at $17 billion. According to 2025 Technology and Innovation Report, by UN Trade and Development, India ranks 10th globally for private sector investments in AI. According to Mary Meeker, India has emerged as a key market for AI platforms, accounting for the largest share of ChatGPT's mobile app users and having the third-largest user base for DeepSeek in 2025. While AI presents significant opportunities for economic growth and social development in India, challenges such as data privacy concerns, skill shortages, and ethical considerations need to be addressed for responsible AI deployment. The growth of AI in India has also led to an increase in the number of cyberattacks that use AI to target organizations. == History == === Early days (1960s-1980s) === The TIFRAC (Tata Institute of Fundamental Research Automatic Calculator) was designed and developed by a team led by Rangaswamy Narasimhan between 1954 and 1960. He worked on pattern recognition from 1961 to 1964 at the University of Illinois Urbana-Champaign's Digital Computer Laboratory. In order to conduct research on database technology, computer networking, computer graphics, and systems software, he and M. G. K. Menon founded the National Centre for Software Development and Computing Techniques. In 1965, he established the Computer Society of India and supervised the initial research work on AI at Tata Institute of Fundamental Research. Jagdish Lal launched the first computer science program in 1976 at Motilal Nehru Regional Engineering College. H. K. Kesavan from the University of Waterloo and Vaidyeswaran Rajaraman from the University of Wisconsin–Madison joined the IIT Kanpur Electrical Engineering Department in 1963–1964 as Assistant Professor and Head of Department, respectively. H.N. Mahabala, who was employed at Bendix Corporation's Computer Division, joined the department in 1965. He previously worked with Marvin Minsky. The IIT Kanpur Computer Center was led by H. K. Kesavan, with Vaidyeswaran Rajaraman serving as his deputy. Kesavan informally permitted Rajaraman and Mahabala to introduce artificial intelligence into computer science classes. The computer science program was approved by IIT Kanpur in 1971 and split out from the electrical engineering department. In 1973, an IBM System/370 Model 155 was installed at IIT Madras. John McCarthy, head of the Artificial Intelligence Laboratory at Stanford University visited IIT Kanpur in 1971. He donated PDP-1 with a time-sharing operating system. During the 1970s, the balance of payments deficit in India restricted import of computers. The Department of Computer Science and Automation at the Indian Institute of Science established in 1969, played an important role in nurturing the development of data science and artificial intelligence in India. First course on AI was introduced in the 1970s by G. Krishna. B. L. Deekshatulu introduced the first course on pattern recognition in the early 1970s. === Foundation phase === ==== 1980s ==== In the 1980s, the Indian Statistical Institute's Optical Character Recognition Project was one of the country's first attempts at studying artificial intelligence and machine learning. OCR technology has benefited greatly from the work of ISI's Computer Vision and Pattern Recognition Unit, which is headed by Bidyut Baran Chaudhuri. He also contributed in the development of computer vision and digital image processing. As part of the Indian Fifth Generation Computer Systems Research Programme, the Department of Electronics, with support from the United Nations Development Programme, initiated the Knowledge Based Computer Systems Project in 1986, marking the beginning of India's first major AI research program. Prime Minister Rajiv Gandhi requested that the Department of Electronics and IISc to initiate the Parallel Processing Project in 1986–1987. The Center for Development of Advanced Computing eventually joined those efforts. IIT Madras was selected to develop system diagnosis, ISI for image processing, National Centre for Software Technology for natural language processing and TIFR for speech processing. In 1987, the proposal of N. Seshagiri, Director General of the National Informatics Centre for the prototype development of supercomputer was cleared. Negotiations for a Cray supercomputer were underway between the Reagan administration and the Rajiv Gandhi government. US Defense Secretaries Frank Carlucci and Caspar Weinberger visited New Delhi after the US approved the transfer in 1988. The sale of a lower-end XMP-14 supercomputer was permitted in lieu of the Cray XMP-24 supercomputer due to security concerns. The Center for Development of Advanced Computing was formally established in March 1988 by the Ministry of Communications and Information Technology (previously the Ministry of IT) within the Department of Information Technology (formerly the Department of Electronics) in response to a recommendation made to the Prime Minister by the Scientific Advisory Council. The National Initiative in Supercomputing, which produced the PARAM series, was led by Vijay P. Bhatkar. For the first ten years, supercomputing and Indian language computing were the two main focus areas. C-DAC has expanded its operations in order to meet the needs in a number of domains, including network and internet software, real-time systems, artificial intelligence, and NLP. Under the direction of Professor KV Ramakrishnamacharyulu from National Sanskrit University and Professor Rajeev Sangal from the International Institute of Information Technology, Hyderabad, the Akshar Bharati Research Group was established in 1984 with support from IIT Kanpur and the University of Hyderabad for computational processing of Indian languages. They focused on computational linguistics, NLP with ontological database systems, and Indian language/translation theories with linguistic tradition. ==== 1990s ==== From IIT Kanpur, Mohan Tambe joined C-DAC in the 1990s to work on Graphics and Intelligence based Script Technology (GIST), which addressed the challenge of adapting personal computer software based on Latin script to Devanagiri and a number of other Indian language scripts. He was previously working on the Machine Translation for Indian languages Project. Within C-DAC, he established the GIST group. The technology was expanded to encompass NLP, artificial intelligence-based machine-aided language learning and translation, multimedia and multilingual computing solutions, and more. GIST resulted in the creation of G-CLASS (GIST cross language search plug-ins suite), a cross-language search engine. The Applied Artificial Intelligence Group at C-DAC has developed some basic and novel applications in the field of NLP, including machine translation, information extraction/retrieval, automatic summarization, speech recognition, text-to-speech synthesis, intelligent language teaching, and natural language-based document management with Decision Support Systems. These applications are the result of the foundation laid by previous language technology activities. Software firms in the Indian private sector began looking into AI applications, mostly in the area of business process automation. In order to allow machines to read, comprehend, and interpret human languages, the Language Technologies Research Center was founded in October 1999 at the International Institute of Information Technology, Hyderabad. It focused on the advancements in semantic parsing, information extraction, natural language generation, sentiment analysis, and dialogue systems. Some of the early AI research in India was driven by societal needs. For example; Eklavya, a knowledge-based program created by I
Read more →