The Rising Horizon of Artificial Intelligence
If artificial intelligence technology is optimally harnessed in India, then by 2035, the activities driven by this technology could contribute an additional 3-4 percent to India’s economic growth. — Dr. Jaya Sharma
Bharat is set to initiate a new economic revolution with the widespread adoption of Artificial Intelligence. It is progressing towards establishing itself as a global leader in the domain, leveraging its substantial pool of technical talent. By 2030, Artificial Intelligence is projected to make a direct contribution of over 30 trillion dollars, to the global economy. India must prioritize its focus on this transformative technology, as leading in AI will be very important for countries aiming to secure their position in the global economy. India is determined to take the lead in this regard.
India among the five major powers
Over the past five years, India has made significant developments in the field of artificial intelligence (AI). In terms of research, startup development, and AI investments, India currently ranks fifth among the world’s top nations. According to Stanford University’s annual AI survey, India achieved this ranking in 2022, receiving the fifth-largest amount of investment in startups offering AI-based products and services. In 2022 alone, AI startups in India attracted a total investment of $3.4 billion, surpassing countries such as South Korea, Germany, Canada, and Australia in this regard. India now follows only the United States, China, the United Kingdom, and Israel in terms of AI investment. With its technological expertise and robust entrepreneurial initiatives, India has the potential to comfortably secure the third position in this sector.
Given the significant interest, drive, and entrepreneurial spirit exhibited by young talents, it is anticipated that venture capital funding in India will experience quarterly growth. Table 1, compares indices over the past decade with those from 2022, illustrates that India ranked sixth in cumulative AI investment between 2013 and 2022. Over this ten-year period, AI companies in India secured a total funding of $7.73 billion, with a remarkable 40 percent of this financing occurring in the previous year alone. This rapid expansion has propelled India into the fifth position. According to experts, this trend of increased venture capital funding suggests that India is poised for further acceleration in the rankings this year, potentially reaching the fourth position. Currently, England holds the third position, with India and Israel sharing the fourth spot.
Wide Application
Artificial intelligence, commonly known as AI, encompasses an expansive and multifaceted domain with various innovative subfields. These include Machine Learning, Deep Learning, Robotics, Big Data Analysis, Peripheral Technology, Internet of Things, Blockchain, Photo Recognition, and many more. Artificial Intelligence technology comprises numerous specialized branches, all geared toward enhancing the convenience and simplicity of human life. Its applications span across diverse sectors such as agriculture, disease diagnosis, healthcare, space exploration, defense, national security, business administration, linguistics, economic planning, and management, among others.
Tabel-1: India’s position in investment in AI in the last decade and 2022
Country Total investment Country Total investment
2013–22 (in bn dollar) 2022-23 (in bn dollar)
United States 248.9 United States 47.36
China 95.11 China 13.41
United Kingdom 18.24 United Kingdom 4.37
Israel 10.83 Israel 3.24
Canada 8.83 India 3.24
India 7.73 South Korea 3.10
Germany 6.99 Germany 2.35
France 6.59 Canada 1.83
South Korea 5.57 France 1.77
Singapore 4.72 Argentina 1.52
Japan 3.99 Australia 1.35
Hong Kong 3.10 Singapore 1.13
Switzerland 3.04 Switzerland 1.04
Australia 3.04 Japan 0.72
Spain 1.81 Finland 0.61
Source - Stanford University survey on AI
India Is Becoming the Global Center for AI Solutions
Among the various priorities of the National Strategy of Artificial Intelligence, the most emphasis has been given on the fact that India should become the solution center i.e. ‘Garage’ of Artificial Intelligence for 40% of the world’s population. Just as the shortcomings of an automatic car are solved in the garage of cars, similarly India should become the garage of artificial intelligence for 40% of the problems of humanity. There is every possibility of this. In this regard, many big companies of the world are establishing their Global Capability Centers in India. Even today 40 percent of such centers in the world are in India.
Within the National Strategy for Artificial Intelligence, a primary focus lies in positioning India as the central hub, referred as the ‘Garage,’ for addressing artificial intelligence solutions for 40% of the global population. Like how issues with an automobile are resolved in a car garage, India aims to become the problem-solving hub for 40% of humanity’s challenges through artificial intelligence. This objective is entirely achievable, considering that numerous major global companies are setting up their Global Capability Centers within India. Currently, India already hosts 40% of such centers worldwide.
NITI Aayog has established highly ambitious objectives and priorities aimed at positioning India as a global contributor, providing solutions in artificial intelligence amounting to 40 percent of the total. Within this national artificial intelligence strategy, particular emphasis has been placed on three principal components and five application areas. These three key objectives are as follows:
1. Advancing social development and inclusive progress through the utilization of artificial intelligence for the broader benefit or greater good of humanity.
2. Harnessing artificial intelligence to its full potential within the economic sector to seize developmental opportunities.
3. Establishing a hub or facility for artificial intelligence, similar to a garage or workshop, to enhance the lives of 40 percent of the global population.
Five Major Areas of Application
Within NITI Aayog’s National Strategy for Artificial Intelligence, five primary application domains have been identified for addressing domestic challenges within the chosen nation and for extensive global implementations. These areas are:
1. Higher education and skill development.
2. The agricultural sector.
3. Healthcare.
4. Smart Mobility and Transportation.
5. Smart City and Infrastructure.
India’s Fast Growing Steps
According to a report from Stanford University, AI startups in India secured a total funding of $7.73 billion between 2013 and 2022, with a significant portion, approximately $3.1 billion or around 40 percent, being raised in 2022 alone. This surge in funding propelled India to the fifth position in 2022, representing 66.84% of the cumulative investment received during the preceding nine years from 2013. If this robust growth rate persists into 2023, the projected new investment for that year would be $5.1 billion, bringing the cumulative investment to $12.9 billion. In such a scenario, India could potentially ascend to the third position, surpassing both Israel and the UK.
As of May 2023, Generative AI applications, like Chat GPT, have experienced rapid growth in India. The Indian Generative AI landscape boasted over 60 startups dedicated to providing solutions and services across various industry sectors. Specifically within Generative AI, these startups have collectively garnered funding exceeding $59 crore. Further, Stanford University’s AI Index report highlighted that 54% of researchers working on large language models are affiliated with American institutions. However, for the first time in the past year, researchers from Canada, Germany, and India have actively contributed to the development of these large language models.
Immense Potential for Economic Contribution
NITI Aayog believes that through this setup, a solution can be found for nearly all the global challenges affecting approximately 40 percent of the world’s population in various ways.
With a positive outlook, it is estimated that with proper preparation, technology related to artificial intelligence can potentially contribute an additional value of approximately 1.5 to 2.5 trillion dollars, to the economy by the year 2030. If artificial intelligence technology is optimally harnessed in India, then by 2035, the activities driven by this technology could contribute an additional 3-4 percent to India’s economic growth.
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