The demand for AI professionals in India would increase in coming years, making it one of the top five fastest-growing AI talent hubs alongside countries like Singapore, Finland, Ireland and Canada, as suggested by reports. But whether India can fulfil the growing need for AI talent is the question. 

India’s AI industry will reach USD 28.8 Bn by 2025, with a CAGR of 45%, according to the India Skills Report 2024. The demand for AI-skilled workforce has seen a 14-fold increase from 2016 to 2023. The demand is further projected to reach 1 Mn by 2026 in the country, it said.

Further, a recent report by Bain & Company found that over 2.3 Mn jobs could come up in India’s AI sector by 2027 and the AI talent pool is expected to grow to around 1.2 Mn qualified candidates.

A report by the BCG-Nasscom said that India’s AI market is projected to grow at a CAGR of 25-35%, reinforcing its potential for innovation and job creation. While AI automates routine tasks, it would also generate new opportunities in data science, ML, and AI-driven applications.

India’s positioning in AI adoption and industry growth

Businesses and investors are prioritising AI investments. According to a BCG report, 80% of Indian companies consider AI a core strategic priority, surpassing the global average of 75%. Further, 69% plan to up their tech investments this year, with one-third allocating over USD 25 Mn to AI-related initiatives.

According to Salesforce, 78% of Indian Small & Medium Businesses (SMBs)using AI reported revenue growth, while 93% stated AI has contributed to increased revenues.

Meanwhile, India’s GenAI startup funding surged more than six times quarter-on-quarter, reaching USD 51 Mn in Q2FY2025, driven by B2B and agentic AI startups, according to a report by Nasscom.

The AI start-up support ecosystem is also booming. India hosts over 520 tech incubators and accelerators, ranking third globally in active programmes. At least 42% of these were established in the past five years, catering to the evolving needs of start-ups, according to the Ministry of Electronics and Information Technology.

And workers are very keen on AI as well. Seven in 10 Indian employees used AI at workplace in 2024, up from five in 10 a year earlier, showcasing AI’s rapid integration into workplaces, according to the Randstad AI & Equity report.

India’s positioning in AI talent and workforce development

AI talent pipeline and education: Under the IndiaAI Future Skills initiative, AI education is expanded across undergraduate, postgraduate, and Ph.D. programmes. Fellowships are being provided to full-time Ph.D. scholars researching AI in the top 50 NIRF-ranked institutes.

Global AI skill penetration: According to the Stanford AI Index, India ranks first in AI skill penetration with a score of 2.8, ahead of the US (2.2) and Germany (1.9). AI talent concentration in India has grown by 263% since 2016. 

AI innovation: India has emerged as the fastest-growing developer and ranks second in public GenAI projects on GitHub. It is home to 16% of the world’s AI talent, showcasing its growing influence in AI innovation.

Will India face an AI talent crunch in the future?

While Indian companies are trying to integrate AI with their products and services, a study is pointing out that there would be a shortage of skilled AI professionals, likely to hinder India’s tech growth.

A report by Bain & Company pointed out that the demand for AI talent is expected to exceed supply by nearly one million workers by 2027, creating a significant gap.

A survey also revealed that 44% of respondents identified a lack of in-house AI expertise as a key barrier to implement GenAI, followed by quality and accuracy concerns (44%).

Data security and privacy concerns (38%), unorganised company data (32%), and unproven ROI on GenAI (29%) were also cited as reasons for businesses not moving faster to adopt AI.

How to bridge the demand-supply gap

Upgrading educational infrastructure: Institutions should update curriculums with specialised AI, ML, and data science programmes at the undergraduate and postgraduate levels. Professionals must make use of AI platforms for upskilling. Partnerships between universities and companies can promote specialised AI programmes.

Corporate training and internships: Companies can implement training programmes to help employees develop AI-related skills. Further, students should take part in internships or fellowships focussing on AI to gain hands-on experience in the field.

Fostering research and innovation: Collaboration between universities and companies can ensure that academic research aligns with real-world AI applications, fostering innovation. Establishing research labs in collaboration with tech giants and startups can further help this.

Focussing on AI specialisations: Institutions and online platforms can create programmes focused on high-demand areas, such as deep learning, AI ethics, computer vision, and natural language processing. Professionals with backgrounds in fields like healthcare, agriculture, or finance can be trained in AI applications specific to their industries to cater to sector-specific demands.

Increasing government support: The government can introduce incentives for AI training programmes and scholarships for students pursuing AI studies. It can also provide funds for AI research, development centres, and AI innovation hubs.

Attracting global talent pool: As AI talent is in demand, India can attract AI professionals from abroad by offering competitive salaries and opportunities. The demand for AI professionals is global, and remote work can help bridge the gap.

Boosting AI startups: Encouraging the development of AI-focused startups through incubation, funding, and mentorship will create more demand for AI professionals and offer hands-on experience to fresh graduates.