Key Points:
- AI Investment Milestone: India secures the 10th spot globally with $1.4 billion in private AI investments in 2023, trailing only China among developing nations.
- Improved Readiness: India climbs to 36th place in the 2024 Readiness for Frontier Technologies Index, up from 48th in 2022, showcasing advancements in AI adoption.
- Global AI Market: The AI industry is projected to reach $4.8 trillion by 2033, but concerns persist about job displacement and inequality.
New York: India has emerged as a key player in the global artificial intelligence (AI) ecosystem, ranking 10th worldwide with $1.4 billion in private investments in 2023, according to the United Nations Conference on Trade and Development (UNCTAD) Technology and Innovation Report 2025. Alongside China, which ranked second with $7.8 billion, India is one of only two developing nations making significant strides in AI investment.
The report underscores India’s increasing prominence in the field of AI, driven by its vast talent pool and government-backed initiatives. With an expected global market value of $4.8 trillion by 2033, AI is poised to play a transformative role in digital innovation and economic growth.
Improved Readiness for Frontier Technologies
India has made significant progress in its readiness to adopt cutting-edge technologies, climbing to the 36th position out of 170 countries in the 2024 Readiness for Frontier Technologies Index. This marks a substantial improvement from its 48th rank in 2022. The index evaluates countries based on key metrics such as:
- ICT Deployment: India ranks 99th.
- Skills: Positioned at 113th, indicating room for improvement.
- Research & Development (R&D): Ranked an impressive 3rd globally.
- Industrial Capacity: Secures the 10th spot.
- Access to Finance: Ranked at 70th.
These rankings highlight India’s strengths in R&D and industrial capacity while emphasizing the need for advancements in ICT infrastructure and skill development.
Global Context: US and China Lead AI Investments
The United States dominates global AI investment, contributing $67 billion (70% of total private funding) in 2023. China follows with $7.8 billion, while India ranks a distant third among developing nations with $1.4 billion. However, India’s growing developer base 13 million strong positions it as a major contributor to generative AI projects and innovations.
The report also notes that access to AI infrastructure and expertise remains highly concentrated, with just 100 companies (mostly based in the US and China) accounting for 40% of global corporate R&D spending.
Opportunities and Challenges
While AI offers immense potential for economic growth and innovation, it also raises critical concerns:
- Job Displacement: The report warns that AI could impact up to 40% of jobs globally by automating tasks across industries. Developing economies reliant on low-cost labor may face reduced competitiveness.
- Inequality Risks: The benefits of AI-driven automation often favor capital over labor, potentially widening income inequality.
- Upskilling Needs: To mitigate these challenges, countries must invest in reskilling and workforce adaptation to ensure that AI creates new job opportunities rather than eliminating them.
India’s Strategic Initiatives
India’s government has been proactive in fostering an AI-friendly ecosystem:
- Establishing centers of excellence like IIT Hyderabad’s AI research hub and NASSCOM’s Data Science & AI Center.
- Launching the India AI Mission to reduce barriers to entry for AI programs and expand educational opportunities in smaller cities.
- Promoting public-private partnerships to drive innovation and commercialization of AI technologies.
These efforts have positioned India as a leader among developing nations in leveraging AI for sustainable development.
India’s ascent to the top 10 global investors in artificial intelligence reflects its growing influence in this transformative sector. With robust R&D capabilities and strategic government support, India is well-positioned to harness the potential of AI while addressing challenges like job displacement and inequality. As the global AI market continues its rapid expansion toward a projected value of $4.8 trillion by 2033, India’s role will be pivotal in shaping the future of technology-driven progress.
