India’s AI Spending to Triple by 2027, BFSI and Manufacturing Lead the Way

by IS_Indust

A report by Intel and IDC reveals that spending on Artificial Intelligence (AI) in India is expected to triple, reaching $5 billion by 2027. The banking, financial services, and insurance (BFSI) and manufacturing industries are among the top spenders in AI adoption.

According to the IDC Asia/Pacific AI Maturity Study 2024, India is currently categorized as an “AI Practitioner” (stage 2) in terms of AI maturity.

The report highlights that the BFSI sector is transitioning from robotic process automation (RPA) to AI-driven automation, focusing on security, productivity, and customer experience (CX). “AI solutions with behavioral analysis and fraud detection mark a shift toward more advanced and adaptable systems,” the report states.

Sharath Srinivasamurthy, Associate Vice President at IDC, discussed the top challenges India faces in AI adoption. “Unclear or lower-than-expected business outcomes and compliance issues are among the top two challenges the country faces,” Srinivasamurthy said.

Other challenges to AI adoption in India include:

  1. Skill issues – critical skills are hard to acquire or retain
  2. Cost issues – cost of ownership too high to justify
  3. Process issues – lack of organizational support to orchestrate cross-function initiatives

Santhosh Viswanathan, Intel India Region Vice President and Managing Director, highlighted India’s readiness for AI, stating that around 20 percent of the world’s data is produced in the country, making it the third-biggest global market. Viswanathan also emphasized that India leads globally in terms of technical skill availability.

The report highlights that India’s huge talent base and strong government support act as a boost for AI adoption in the country.

According to the IDC Asia/Pacific AI Maturity Study 2024, India is currently at par with the Asia/Pacific averages for the enterprise dimension, ahead for the government dimension, and slightly behind for the socio-economic dimension.

As AI continues to gain momentum in India, the BFSI and manufacturing sectors are leading the way, driving innovation and leveraging advanced AI solutions to enhance their operations, security, and customer experiences.

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