2024 AI Adoption Index 2.0 has been released by nasscom. The report highlights the significant advancements and opportunities in India's AI landscape at a time when the growth in the Indian AI market is expected to mirror the global AI market growth rate of 25-35% over the next 3-4 years and as AI technologies evolve rapidly driven by the transformative impact of Generative AI. The Index 2.0 study provides in-depth insights into the AI adoption trends across seven sectors and 500 surveyed companies covering BFSI, CPG and Retail, Healthcare, Telecom, Media and Entertainment, Energy and Utilities, Manufacturing, and Transport and Logistics—covering 75% of India's GDP.

Rapidly growing AI market

The report remarks that AI is rapidly emerging as an integral part of India's digital economy transformation. Integrating AI technologies is revolutionizing organizational functions and bringing about automation-led productivity enhancements. From ubiquitous virtual assistants to seamless integration with processes and decision systems, AI's presence within Indian organizations has witnessed notable growth. 

Strong national-scale support pillars have emerged – the centrally-funded IndiaAI mission, supportive policy framework, AI and GenAI-ready tech services industry and startup ecosystem, and India's 2nd largest installed AI talent base.

AI maturity at the Enthusiast stage

The report states that India's 2024 AI adoption index score is 2.47 on a 4-point scale, compared to 2.45 in 2022, and 87% companies are in the middle stages of Enthusiast and Expert AI adopters. There is a 2X rise in the number of companies in the Expert stage in 2024 compared to 2022, the next maturity stage after Enthusiast, where scaled AI adoption is observed.

Factors that have improved since 2022 are a strong focus on data standardization, IT stack and application portfolio modernisation, and embracing Cloud over on-premise. Companies have also taken measures to formalize AI risk, ethics, and governance frameworks.

Furthermore, the report also highlights the factors that need urgent attention. These factors include leadership commitment to AI being inconsistent, which is reflected in ad-hoc, PoC-driven strategy, budgeting, and execution; use case selection is a major challenge; and AI-led innovation—self- or partner-led—being very nascent and lagging.

Accelerating AI adoption

The report provides means to accelerate AI adoption span across common foundational interventions to contextualized approaches based on enterprise need and propensity to utilize AI effectively. In transitioning from AI-ready to AI-first, Indian enterprises, both large and SMBs, need to focus on several strategic actions. Large enterprises should prioritize data standardization, strategic partnerships for swift PoC-to-production transitions, and balanced AI use for both efficiency and innovation, while carefully managing AI risks and integrating sustainability into their AI strategies. SMBs should emphasize contextual use cases, explore partnerships with tech SMEs to jumpstart AI initiatives, ensure strong leadership commitment, gain knowledge of data regulations, and foster peer learning to overcome adoption barriers.

Download the report here.