The Indian IT industry is the bed rock of the growing nation. Its revenue reached USD 245 billion in FY23, up from USD 132 billion in 2015, employing around 5.4 million in total. A recent report by Goldman Sachs points to the potential of services exports increasing to USD 800 billion by 2030. Their baseline scenario suggests that services exports could reach around 11 per cent of GDP by 2030 from the present 9.7 per cent, marking India’s rise as the services factory of the world.
With the reveling capabilities of AI, the industry is at the cusp of yet another major transition. Recently, TCS CEO Kirthivasan, pointed to the call centre sector completely being taken up by AI within just a year. The advancements in AI, remove the need for humans. Chatbots and virtual assistants would be able to pre-emptively detect and solve user concerns resulting in enhanced customer experience and improved response times. The market size for AI in customer support is projected to reach USD 11.6 billion by 2025.
ITES, Accounting and HR will be most transformed by AI…
IT services and accounting also stand to benefit with AI integration in their operations. In IT services alone, AI related operations will have a market size of USD 168 billion by 2027. This will help to streamline processes and optimise efficiency in the sector. In accounting, the market size for AI is expected to reach USD 4.3 billion by 2025, enabling faster and more accurate reporting through automation and data analysis.
To retain the competitive edge, skilling plays a primary role. The industry has already started this initiative. Microsoft recently announced its aim to equip 2 million people with AI skills by 2025. Demand for generative artificial intelligence (Gen AI) courses has surged about threefold in the past one year, with working professionals upskilling and reskilling them. Stanford University’s AI Index Report 2023 ranks India on top, at 3.2, for penetration level of AI skills, followed by the United States (2.2), and Germany (1.7). Additionally, in 2022, Indian software developers contributed around 24.2 per cent of AI projects on GitHub.
Investments in AI must be ramped up
But the same enthusiasm does not reflect in AI related research. Over the past decade, India saw a mere 0.2 per cent contribution to global AI patents, and only USD 9 billion was invested in AI ventures from 2013 to 2023. In contrast, the US saw a staggering USD 335 billion in AI investments during the same period. The government is trying to bridge the gap and spearhead with the investments. Recently, the India Artificial Intelligence Mission, with an outlay of Rs 10,372 crore for five years was announced. This will focus on developing AI related technologies and enhancing the supercomputing capacity in the country. GPUs based servers are core to AI operations as they can process data at higher speed than CPUs. 10,000 units would be made available in 10-24 months with an aim to extend GPU as a public infrastructure to enable AI-as-a-service. This expects to spur the investment in the area with several private players following suite.
