India’s AI Breakthrough: Powering the Future with Affordable Innovation

India is witnessing a transformative revolution in Artificial Intelligence, and at the heart of this change is the visionary leadership of PM Modi. For the first time in India’s history, the government is directly fostering an AI ecosystem where computing power, GPUs, and research opportunities are available at an affordable cost.

The Modi government has ensured that AI is not just for a privileged few and were not dominated by big tech companies and global giants. Through ground-breaking policies, Modi government is enabling students, startups, and innovators to access world-class AI infrastructure, creating a truly level playing field. Be it the IndiaAI mission or establishing Centers of Excellence for AI, all these initiatives by Modi government intends to improve the country’s ecosystem.

Let us have a look on what Modi government is doing to make India a Global AI Leader:

IndiaAI Mission: Pioneering Accessible AI

Marking a significant step towards bolstering India’s AI ecosystem, the Modi government in 2024 approved the IndiaAI Mission with allocation of ?10,300 crore. This funding slated over the next five years, is poised to catalyse various components of the IndiaAI Mission.

Backed by a high-end common computing facility, the India AI mission is now closer to customising indigenous AI solutions for the Indian context using Indian languages. The AI model is beginning with the computation facility of roughly 10000 GPUs. Soon the remaining 8693 GPUs will be added.^[1]

GPU Infrastructure and Open GPU Market

Within 10 months of the launch of India AI Mission, the nodal ministry has been able to get an unprecedented response & create a high end & robust common computing facility of about 18,693 Graphic Processing Unit, GPUs. It is about nine times of what Open Source Model DeepSeek has & about two third of what ChatGPT has.^[2]

Notably, the Modi government has pioneered the opening of India's GPU marketplace and it is the first government to open the GPU marketplace in India, enabling small startups, researchers, and students to access high-performance computing resources, unlike major countries where the AI market is often dominated by large industry players.

The Modi government will make available 18,000 high-end GPU-based compute facilities for AI development to entities in the country in the next couple of days and out of that, 10,000 are already available. The government has also selected 10 companies that will supply 18,693 GPUs.^[3]

Additionally, India will develop its own Graphics Processing Unit (GPU) in the next three to five years, and a domestic foundational AI platform can be expected in the next 10 months.

The government will soon launch a common compute facility where startups and researchers can access computing power. While global GPU access costs around $2.5-$3 per hour, the Modi government will offer it at just $1 per hour. The researchers, startups, academicians, colleges, IITs, all of them can have access to this compute power, and they can start foundational models.^[4]

IndiaAI Dataset Platform: Enabling AI Innovation with Open Data

Data is the fuel that drives AI research and innovation, and without rich, diverse, and abundant datasets, even the most skilled data scientists and developers face limitations. Recognizing this, the Modi government has been actively working to make open datasets accessible to the larger research community.^[5]

The government through the IndiaAI Dataset Platform aims to streamline access to high-quality, non-personal datasets, creating a unified data platform that enables seamless access for Indian startups and researchers, accelerating AI-driven innovation. This AI dataset platform will have the largest collection of anonymised data which will drive innovation and enhance capabilities of AI applications.^[6]

Establishment of AI Centres of Excellence

In 2023, the Modi government announced the establishment of three AI Centres of Excellence (CoE) focused on Healthcare, Agriculture, and Sustainable Cities in New Delhi. The Budget 2025 announced setting up a new centre of excellence for AI for education with an outlay of Rs 500 crore.^[7] The CoE for AI in education is the fourth such centre to be announced. 

The government also revealed plans for 5 National Centres of Excellence for Skilling, designed to equip youth with industry-relevant expertise. These centres will be set up with global partnerships to support Make for India, Make for the World manufacturing.

India’s Foundational Large Language Models

India is not only developing a robust AI ecosystem but has already made significant strides in creating foundational AI models. The government has ensured that India's AI advancements are indigenous. IndiaAI has launched a significant initiative to develop indigenous foundational AI models, including LLMs and SLMs, through a call for proposals.

One of the standout achievements is Digital India BHASHINI, India’s AI-led language translation platform which seeks to enable easy access to the internet and digital services in Indian languages, including voice-based access, and help the creation of content in Indian languages.

BharatGen the World’s First Government Funded Multimodal LLM Initiative.BharatGen, is a generative AI, was launched in India in 2024, in Delhi. The initiative is designed to revolutionize public service delivery and boost citizen engagement by developing a suite of foundational models in language, speech, and computer vision.^[8] BharatGen includes a consortium of top AI researchers across premier academic institutions in India.^[9]

Sarvam-1 AI Model, this innovative large language model is optimised explicitly for Indian languages, addressing a critical gap in the AI landscape. Sarvam-1, boasting 2 billion parameters, supports ten major Indian languages, demonstrating its potential to revolutionize various applications such as language translation, text summarization, and content generation. ^[10]

Chitralekha is an open-source video transcreation platform developed by AI4Bh?rat. Leveraging advanced AI models, Chitralekha empowers users to generate and edit audio transcripts in various Indic languages effortlessly. The platform's open-source nature encourages community contributions and fosters innovation in AI-powered video processing.

SML’s Hanooman has unveiled Everest 1.0, a versatile multilingual AI system designed to cater to various Indian languages, including Hindi, Bengali, Tamil, and Telugu. The system currently supports 35 languages and is poised to expand its language capabilities to 90 shortly.^[11]

India Leads Global AI Talent and Skill Penetration

AI Talent Pipeline & AI Education Beyond Metro Cities

Under the IndiaAI Future Skills initiative, AI courses will be expanded across undergraduate, postgraduate, and Ph.D. programs. Additionally, fellowships are being provided to full-time Ph.D. scholars researching AI in the top 50 NIRF-ranked research institutes.^[12]

To ensure inclusive access to AI education, the government is setting up Data and AI Labs in Tier 2 and Tier 3 cities. These labs will offer foundational AI courses to a broader demographic. A model IndiaAI Data Lab has already been established at the National Institute of Electronics and Information Technology (NIELIT) in Delhi.^[13]

India Ranks 1st in Global AI Skill Penetration

According to the Stanford AI Index 2024, India leads globally in AI skill penetration. India ranks first globally in AI skill penetration with a score of 2.8, surpassing the US (2.2) and Germany (1.9). The country has also witnessed a remarkable 263% growth in AI talent concentration since 2016, positioning itself as a major global player in AI.

India also leads in AI Skill Penetration for Women with a penetration rate of 1.7, followed by the US (1.2) and Israel (0.9). This achievement signifies India’s ongoing efforts to bridge gender disparity in AI skill development.^[14]

Growing Presence in AI Innovation

When it comes to innovation and technology, Indian youth are among the best. India has emerged as the fastest-growing developer population globally, ranking second in public generative AI projects on GitHub.^[15] India is positioning itself as an innovation hub for AI, housing 16% of the world's AI talent and demonstrating rapid adoption of AI skills.

India among Top 5 Fastest-growing AI Talent Hubs

The “India Skills Report 2024” by Wheebox forecasts that India’s AI industry will reach USD 28.8 billion by 2025, with a CAGR of 45%. Additionally, the AI-skilled workforce in India has seen a 14-fold increase from 2016 to 2023. India stands among the top five fastest-growing AI talent hubs, alongside Singapore, Finland, Ireland, and Canada.^[16] The projected demand for AI professionals in India is anticipated to hit around 1 million by 2026.

India's GenAI ecosystem Grows Remarkably Amid Global Downturn

According to a report by NASSCOM in November 2024, India's Generative AI ecosystem has grown remarkably amid a global downturn. It said that Indian GenAI startup funding, at about USD 51 million in Q2FY2025, saw over 6 times rise quarter-on-quarter, led by B2B and agentic AI startups.The evolution of the Indian GenAI ecosystem from experimental use cases to scalable, production-ready solutions is reflected in its growing maturity.^[17]

India is leading in AI Adoption

According to a recent report compiled by BCG, India is leading in AI adoption, with 80% of companies identifying AI as a core strategic priority, surpassing the global average of 75%. It revealed that 69% of Indian companies plan to increase their tech investments in 2025, with one-third of these companies set to allocate over $25 million to AI initiatives. This reflects the nation’s drive towards a comprehensive digital transformation agenda.^[18]

According to the Randstad AI & Equity Report 2024, AI has made rapid inroads into workplaces in India, with seven in 10 employees using some form of AI at work in 2024, up from 5 in 10 a year earlier. ^[19]

The Continuous Rise of Indian AI

By leveraging AI-driven technologies such as autonomous agents, small and medium-sized businesses (SMBs) are unlocking efficient ways to scale, delivering personalised customer experiences and optimising back-office operations. According to a report by ‘Salesforce’, as many as 78% of small and SMBs in India using AI have reported revenue growth. 93% of Indian SMBs surveyed said AI has helped increase revenues. ^[20]

AI Market Growth in India

India’s AI market is experiencing exponential growth, as highlighted by the BCG-NASSCOM Report 2024. The AI market will grow at CAGR of 25-35%, emphasizing innovation and job creation potential. While AI automates routine tasks, it generates new job opportunities in data science, machine learning, and AI-driven applications.^[21]

Growing Network of Accelerators

India is home to 520+ tech incubators and accelerators. India has the third-largest number of active programs in the world, with 42% of programs set up in the past five years to support the needs of Indian startups. 

Accelerators like T-Hub MATH provide AI startups with crucial guidance on product development, business strategy, and scaling. For instance, in the initial months of 2024, MATH had over 60 startups under its fold, and five of them are under discussion for funding. ^[22]