AI Expansion to Transform India: Spending Expected to Reach $6 Billion by 2027

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According to International Data Corporation (IDC), Artificial Intelligence (AI) and Generative AI (GenAI) adoption in India significantly increased, including software, services, and hardware for AI-centric systems, with spending projected to reach $6 billion by 2027 and a compound annual growth rate (CAGR) of 33.7% for the period 2022-2027.

IDC forecasts that worldwide AI spending will exceed $512 billion by 2027, more than double its 2024 market size. IDC presented these trends and highlighted India’s potential to become a global leader in the development and use of next-generation AI technologies to more than 160 senior executives from India’s most influential technology vendors and IT services providers who attended the Directions India conference last June 12, 2024.

IDC Directions, IDC’s flagship event dedicated to delivering informative and actionable insights on the issues shaping ICT markets, returned to India this year after a ten-year absence. Focused on the theme The Digital Business Impact of AI Everywhere, it included discussions on current global and local AI trends, outlooks and predictions, as well as recommendations for technology vendors and service providers on how they can guide clients realize productivity gains, create more compelling experiences and accelerate growth through new revenue streams from their AI initiatives.

Linus Lai, Vice President, Digital Business, IDC Asia/Pacific, also shared in his keynote at the event that 76% of Indian enterprises are already focused on GenAI proofs of concepts (POCs) or already have an investment plan in place​. Lai reiterated that, “This AI Moment is not a one-hit-wonder. Its implications for India are widespread and strikes at the heart of culture and business model transformation with data as its most valuable asset.”

Dr. Christopher Marshall, Vice President, Data, Analytics, AI, Sustainability and Industry Research, IDC Asia/Pacific who talked about building a defensible business strategy for the AI era, added that, “India is the sleeping giant in Generative AI. Its scale, skills, and startups are set to transform not just AI in India but also in the world.”

Another prediction shared during the event was that by 2025, 40% of services engagements will include GenAI-enabled delivery, triggering a shift in human-delivered services for strategy, change, and training to prepare organizations for AI everywhere.​ IDC recommended that while transforming internally, Indian service providers should continue delivering value and meeting evolving customer needs, including supporting customers through their own AI transformations. To truly dominate the CX services market, analysts at the event also advised service providers to challenge and lead clients by offering CMOs more GenAI-fueled end-to-end services.