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The AI market in India was estimated to be around USD 6.4 Bn in 2020. The sector is on track to add USD 957Bn, or 15% of India’s current gross value, by 2035. Despite lacking in key indicators of AI development, the country remains competitive partly due to Indian companies adopting AI technology, the improving tech skills of the citizens, and the country’s investments in tech infrastructure.
How is India an AI Innovation Hub?
AI’s potential has spurred the government to introduce bold, multi-pronged initiatives to strengthen innovation and labor productivity. The late 2010s witnessed an uptake in AI-focused innovation. The number of patents filed during the 2016 – 2021 period was 4,000, which is six times the 2011 – 2015 period.
While Europe is about to increase its spending by 33% between 2020 to 2023, in 2020, the Indian government increased the expenditure to USD 477 Mn boosting R&D in AI and ML, IoT, robotics, big data, and cybersecurity.
The flagship initiative Digital India aims to make the internet more accessible while promoting e-governance, e-banking, e-health, and e-education. In the Union Budget 2019, the finance minister announced the training of 10 million youth in India in AI/ML, robotics, and big data.
AI Initiatives in India
The patent activity is a core indicator of the research and innovation ecosystem. Weak IP protection, limited resources, poor infrastructure, limited R&D funding, and a lack of patenting culture are the reasons for insufficient patent activity.
However, the scenario is shifting. Before 2002, India had no patents relevant to AI. With ten times as many AI-relevant patent applications compared to a decade ago, India is currently ranked 8th.
While MNCs lead the ratio of patents granted, there has been an increased government implementation. Policy-level initiatives by the Ministry of Electronics and Information Technology (MeitY), programs by NASSCOM, and Defence Research & Development Organization (DRDO) have laid the groundwork, including a roadmap for disruption.
The use cases in the government include biometric identification, criminal investigation, facial recognition and hotspot analysis, river cleaning, tiger protection, digital agriculture, student progress monitoring, women safety, traffic and crowd management, among others.
Some of the steps taken by the government to further R&D are:
- DRDO’s Centre for Artificial Intelligence and Robotics (CAIR) laboratory is researching AI, robotics, networking, and information and communication security to develop mission-critical products for battlefield communication and management systems.
- The Ministry of Corporate Affairs (MCA) launched version 3.0 portal, MCA 21, which will leverage data analytics, AI and ML, to ease corporate filings, promoting the ease of doing business and compliance monitoring.
- AI portal, jointly developed by MeitY and NASSCOM, is slated to become a hub for AI-related developments and activities in India.
- National Research Foundation, an autonomous body under the National Educational Policy (NEP) 2020, has been established to boost research across AI and other segments.
- In pursuance of the NEP, the National Council of Educational Research and Training (NCERT) is preparing a new National Curriculum Framework for School Education to introduce AI in schools at the secondary levels.
- The e-governance division of MeitY established the Responsible AI for Youth to help students in government schools to develop a new-age mindset and equip them with relevant skill sets.
AI Application Fields in India
At 38%, the top application field for India’s AI patents was personal devices and computing. The next three are business at 14%, life sciences at 10%, and telecom at 10%. However, transportation, banking and finance, the manufacturing sector, semiconductors, and others are still behind in AI-related patents.
However, there are startups AI for crucial applications. Let us look at a few.
E-commerce – Platforms like Myntra interact with users and collect data to understand their behavior and predict fashion trends.
BFSI – Many top banks use AI and bots to interpret information, recognize patterns, and accelerate workflows, helping to detect suspicious activities and flag poor payment behavior.
Healthcare – AI and ML are assisting in early disease detection and providing personalized treatment options.
Education – Personalized systems are used to adapt to students’ learning needs. Microsoft is working with the state govt. of Andhra Pradesh to predict dropout rates in government schools to intervene early.
Transport – There is increased research in autonomous vehicles and traffic management. Indian Railways, along with RailTel and Indian Space Research Organization (ISRO), are devising safety mechanisms using AI to make train travel safer.
Agriculture – AI technologies are driving improvements in crop yields, improve soil health, and deliver pesticides. Tata Chemicals’ subsidiary, Rallis, is administering pesticides using drones.
Smart cities – IoT is slated to improve quality of life and improve comfort in cities. The government of India is developing AI models to create more than 100 smart cities.
Additionally, there is a mushrooming of AI-based startups. Big corporations like Reliance Jio and Airtel are setting up AI labs in collaboration with players like NVIDIA, Google, and Microsoft.
Stepping up to the Future with AI
As AI can potentially outperform humans, then AI adoption could slash costs for businesses and the government. AI-based research is based on five pillars: universities, startups, large corporations, policymakers, and multi-stakeholder partnerships.
What will this achieve?
- Boost productivity and growth in big companies and industries. For example, as downtime prediction becomes easy, manufacturing can see a profit increase of 39%.
- Serve as a tool for startups and MSMEs to take on and be on par with the giants.
- Improve public safety and save lives.
To conclude, AI can spur economic growth and secure India’s place as a leader. Stakeholders must ethically foster innovation and growth while safeguarding consumer rights.
- They must forge a national plan with multi-stakeholder partnerships in key sectors.
- Strengthen the R&D ecosystem through cooperation.
- Foster inclusivity in the workforce models.
- Enable availability of data.
- Safeguard responsible AI-based solutions with smart regulations.
Draup conducted a comprehensive analysis of the Indian AI market. We have documented how AI has evolved in India, the key players with their foot down, including key initiatives, trends, and analysis of key service providers.
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