India is rapidly emerging as a significant player in the global artificial intelligence (AI) and deep tech landscape, backed by proactive government policies, increasing investments, and a growing pool of skilled professionals. Experts worldwide are recognizing India's potential to become a leader in these transformative technologies, driven by its unique approach to AI development and its focus on addressing societal challenges.
The Indian government has been instrumental in shaping the AI ecosystem through various strategic initiatives. The India AI mission, launched in 2023 with an allocation of ₹10,300 crore (approximately $1.2 billion) over five years, aims to foster AI innovation across sectors. This mission focuses on developing AI applications for healthcare, education, agriculture, and smart cities, while also promoting responsible and ethical AI development. A key component of this mission is the creation of a high-end common computing facility equipped with 18,693 Graphics Processing Units (GPUs), making it one of the largest AI compute infrastructures globally.
In addition to the India AI mission, the government has established Centres of Excellence (CoE) in AI, focusing on areas such as healthcare, agriculture, and sustainable cities. The Budget 2025 further announced a new CoE for AI in education with an outlay of ₹500 crore, demonstrating the commitment to integrating AI into various sectors. Moreover, the government is investing in skilling initiatives to equip the youth with industry-relevant expertise in AI, collaborating with global partners to support the "Make for India, Make for the World" vision.
India's approach to AI development is distinctive, emphasizing AI autonomy through the creation of homegrown AI solutions closely linked to its development goals. Unlike the United States and China, which focus on AI for economic dominance and national security, India's vision revolves around democratizing AI through open innovation. This includes leading the development of open-source models and platforms that make AI more accessible and adaptable to India's local needs. The Bhashini platform, which incorporates Indian languages in large language model processing, and the iGOT Karmayogi online learning platform for government training, are examples of this approach.
The private sector in India is also playing a crucial role in the AI revolution. According to BCG, 80% of Indian companies consider AI a core strategic priority, surpassing the global average of 75%. Moreover, 69% of these companies plan to increase their tech investments in 2025, with one-third allocating over USD 25 million to AI initiatives. This growing investment is fueling the expansion of India's Generative AI (GenAI) ecosystem, which is evolving from experimental use cases to scalable, production-ready solutions.
India's deep tech sector, which includes AI, is also experiencing significant growth. Investments in deep tech reached $324 million across 35 deals in the first four months of 2025, doubling from $156 million in the same period in 2024. Key areas driving deep tech innovation include artificial intelligence, space tech, quantum computing, robotics, and semiconductors. To further boost the deep tech ecosystem, the government announced a ₹10,000 crore Fund of Funds to channel long-term capital into early-stage deep tech ventures, focusing on startups working in AI, quantum computing, robotics, and biotech.
Despite the promising outlook, India faces certain challenges in its AI journey. One of the key challenges is the need for responsible AI governance. As AI adoption accelerates, it is crucial to address ethical concerns, prevent user harm, and ensure that AI solutions are fair, inclusive, and aligned with societal values. The government is working on developing tools to detect bias and deepfakes, and is actively engaging in consultations to tailor AI readiness assessment methodologies to India's unique ecosystem.
