India’s AI market to grow at 20.2% CAGR to reach $7.8 bn by 2025
India’s AI (artificial intelligence) market is expected to grow at a CAGR (compound annual growth rate) of 20.2% to touch $7.8 billion by 2025, research firm International Data Corporation (IDC) said in a report.
The report titled 'India Artificial Intelligence Market, 2021', provides comprehensive coverage of the state of AI adoption in India - covering hardware, software and services markets.
The businesses in India will accelerate the adoption of both AI-centric and AI non-centric applications for the next five years, it added.
AI software segment will dominate the market and would grow from $2.8 billion in 2020 at a CAGR of 18.1% by the end of 2025.
Organisations are leveraging multiple AI applications such as CRM, ERM and others to manage operations, scale supply chains in response to real-time or predicted demands and many more to provide benefits for their customers, improve ROI and achieve cost savings.
"Indian organisations plan to invest in AI to address current business scenarios across functions, such as customer service, human resources (HR), IT automation, security, recommendations, and many more. Increasing business resilience and enhancing customer retention are among the top business objectives for using AI by Indian enterprises,” Rishu Sharma, associate research director, cloud and AI, IDC India, said.
The report also demonstrates the state of organisations’ AI initiatives and answers key questions around deployment models for AI-ML solutions.
AI-powered solutions process multiple data types to provide relevant recommendations to decision-makers.
The India AI market report provides a glimpse of different data types that are being processed by the organisations for their AI-ML solutions.
At least 51% of organisations are processing transactional and social media data through AI-ML solutions, IDC said.
"With data being one of the most crucial components in an AI-ML project, businesses use variety of databases to handle large data volumes for making real time business decisions,” Swapnil Shende, senior market analyst, AI, said.
“Organisations must focus on getting high-quality training data for AI-ML models, as this would define the success of their AI initiatives," Shende added.
The report further said that AI applications form the largest share of revenue for the AI software category, at more than 52% in 2020. However, the major reasons for AI projects to fail include disruptive results to current business processes and lack of follow-ups from business units.