AI spending in India expected to see strong growth by 2027

Jingyue Hsiao, DIGITIMES Asia, Taipei 0

Credit: AFP

Intel and IDC forecast AI spending in India to reach US$5.1 billion by 2027, with a CAGR of 31.5% from 2023 to 2027.

In 2023, US$209 million was spent on AI infrastructure and related software. AI adoption is expected to expand further by fiscal 2025, with the banking and financial services industry-leading at a 68% adoption rate.

According to Business Standard and PTI, Intel, and IDC jointly conducted a study and forecasted a significant rise in AI spending in India, projecting it to reach US$5.1 billion by 2027, with a compound annual growth rate (CAGR) of 31.5% between 2023 and 2027.

More than half of the spending, at US$2.6 billion, will come from the AI software sector, and spending on AI infrastructure is forecasted to account for US$733 million.

Sharath Srinivasamurthy, associate vice president at IDC, highlighted that in 2023, a substantial portion of the spending, totaling US$209 million, was allocated towards AI infrastructure provisioning and related software.

Srinivasamurthy was quoted saying that 2023 was primarily a year of planning, and 2024 will see more expansive AI adoption, adding that the current phase sees numerous organizations conducting pilots and proofs of concept. By around 2027-2028, AI is anticipated to permeate various sectors extensively.

India entities are expanding their AI investments. According to the Economic Times, Teamlease Digital data showed that the AI adoption rate in key industries in India reached 48% in fiscal 2024 (April 2023 to March 2024), with fiscal 2025 expected to see an additional 5-7%. According to the report, the banking and financial services industry led the trend with a 68% AI adoption rate, followed by the tech industry at 60-65%.