top of page
TechRegForum Logo (1)_edited.jpg

CCI’s Market Study - Market Structure of AI in India: AI stack

  • Tech Reg Forum
  • Oct 23, 2025
  • 5 min read

We scriberes summarise -  taking information provided by the Competition Commission of India (“CCI”) in its latest market study on ‘Artificial Intelligence and Competition’ published on October 6, 2025. The CCI’s market study outlines the structure of India’s AI ecosystem through a layered “AI stack,” highlighting the roles of data, infrastructure, development, and application. Most Indian AI startups (67%) operate at the application layer, building on existing foundation models, while only 3% develop foundational models themselves. Global tech firms dominate the data and infrastructure layers, though Indian startups are emerging across areas like cloud computing, generative AI, and deployment. Machine Learning is the most widely used AI technology, followed by GenAI, NLP, and Computer Vision, all showing strong market growth. Despite rapid development, the ecosystem remains heavily reliant on global players for core technologies.


 Figure 1: Artificial Intelligence (AI) Stack for Market Study on AI andCompetition[1]


  • AI Stack is divided into upstream (where data and foundational technologies are prepared)and downstream layers (where AI gets adapted and deployed in real-world contexts).

  • Main Layers - data layer, infrastructure layer, development layer and model layer.

  • 67% of AI startups in India are focused on the AI application model layer. These companies use existing foundation models to build applications.

  • 3% are involved in developing foundation models.

  • 20% are working in AI data layer.

  • 10% provide compute and AI infrastructure.



Figure 2: Core areas of work of startups[2]


Data Layer


  • As per an MRF Report - Major players in the Indian market in the data layer are Appen (23.4%), AWS (19.2%), Google (15.3%), Microsoft Azure (11.3%) and Scale AI (9.4%).

  • Other companies including IBM, Kaggle, Meta, Wipro, Playment and Infosys have a combined market share of 21.4%. [3]

  • Indian startups: Tuplejump, Extracto, ML LABS, Prakash and WitHub.[4] 


Computing and AI Infrastructure Layer


  • The cloud computing landscape in India is characterised by the presence of major global players like Amazon Web Services (AWS) (32.6%) , Microsoft Azure (20.8%), and Google Cloud Platform (GCP) (1.5%), each offering scalable computing, storage, and AI/ML tools.

  • Other companies including Oracle, IBM Cloud, Utho, DigitalOcean, LLC, ESDS Software Solution Ltd., Tata Communications, Cyfuture India Private Limited, PixelCrayons etc made up the remaining 35.1%.[5]

  • The growing demand for AI technology is driving semiconductor manufacturing and innovation. According to the Semiconductor Industry Association (SIA) the global semiconductor sales reached USD 627.6 billion in 202430, an increase of 19.1% compared to the 2023 total sales of USD 526.8 billion.[6]

  • The market is projected to grow from USD 755.28 billion in 2025 to USD 2,062.59 billion by 2032, with a CAGR of 15.4%.[7]

  • Major global players include Taiwan Semiconductor Manufacturing Company (TSMC), Samsung, Intel, NVIDIA, Qualcomm, and Broadcom.

  • India - market size of the overall semiconductor industry was at USD 45 billion and AI semiconductor market size was USD 3 billion in 2023.

  • Projected growth in India - USD 21 billion by 2030; a sevenfold increase.[8]

  • Major Players - Tata Group, Micron, HCL-Foxconn etc.

  • In addition to chip manufacturing, the infrastructure layer in India is anchored by a growing set of startups focused on cloud computing and edge computing. This includes JarvisLabsAI, NeevCloud, MoboDexter, and BrainChip.


AI Development Layer

  • The AI development layer is where algorithms are developed, trained and applied to create AI models using Machine Language (“ML"), Natural Language Processing (“NLP”), Computer Vision (“CV”), and Generative AI (“Gen AI”).  

  • 88% of the startup respondents said that they use ML to build their AI solutions.

  • 66% respondents said they use (Gen AI) LLMs for application development.

  • 8% use NLP.

  • 27% work in CV.

  • ML is the most popular and widely used technology.



Figure 3: AI Technology Used


  • Pre-trained proprietary algorithms and pre-trained open-source algorithms are used by 63% and 66% of the respondent companies, respectively. Pre-trained open-source algorithms may result in increased competition (lower barriers to entry).

  • Supervised, unsupervised and reinforcement learning algorithms are used by 66%, 56% and 39% of the companies, respectively.

  • Deep learning multi-modal algorithms with multiple types of data inputs, such as text, images and audio, are used by 46% of the respondent companies.

  • Adoption of AI technologies in India is driven by advancements in Machine learning (ML), (NLP) and automation.


i) Machine learning (ML)

  • The market size of ML inIndia has increased from USD 1.76 billion in 2020 to USD 2.63 billion in 2024.

  • Projected growth - USD 3.55 billion in 2025 to USD 18.96 billion in 2031.[9]

  • As per the MRF Report the market size for ML in India is expected to increase from USD 4.23 billion in 2025 to INR USD 46.79 billion by 2032 at a CAGR of 40.9%.[10]


ii) Natural Language Processing (NLP)


  • The market size of NLP in India has increased from USD 0.47 billion in 2020 to USD 1.37 billion in 2024.

  • Projected growth - USD 1.84 billion in 2025 to USD 6.88 billion in 2031.[11] 

  • As per the MRF Report adoption of NLP in AI solutions is expected to grow from USD 3.07 billion 2025 to USD 37.33 billion by 203243 at a CAGR of 42.8%.


iii) Computer Vision (CV)


  • The market size of CV in India has increased from USD 0.34 billion in 2020 to USD 0.88 billion in 2024.

  • Projected growth - USD 1 billion in 2025 to USD 2.39 billion in 2031.

  • As per the MRF Report the market size is expected to increase from USD 2.05 billion in 2025 to USD 24.56 billion in 2032 at a CAGR of 42.6%.


Generative AI/ Foundation Model Layer


  • The market size of Gen AI in India has increased from USD 0.10 billion in 2020 to USD 0.67 billion in 2024 and is expected to grow from USD 1.18 billion in 2025 to USD 7.81 billion in 2031.

  • As per the MRF Report the market size is expected to increase from USD 0.36 billion in 2025 to USD 4.53 billion by 2032 with a CAGR  of 43.4% for the 2025–2032 period.

  • Major Players: Microsoft, Google and Meta

  • Indian Startups in GenAI - Observe.AI, Pixis, Ola Krutrim, InVideo, Sarvam AI, Avaamo AI, Senseforth.ai[12]


Table 1: Algorithms provided by different global technology giants[13]


  • In India, the majority (43%) of Gen AI Indian startups prefer a hybrid architecture consisting of a mix of open-source and closed-source models.[14]

  • Around 80% of Indian Large Language Model (LLMs) are estimated to be built atop existing foundational models.[15]

  • Major Players: Npluslabs, EDGE Neural, Grey Chain AI, Aqeeq Technologies.


AI Release and Deployment Layer


  • The AI release and deployment layer manages the deployment, versioning, and distribution of AI models to businesses, ensuring seamless updates and real-time performance.

  • Indian Players: Sygmoid, Cumin AI, Inferless.


AI User Interaction Layer


  • The AI user interaction layer focuses on how customers and employees engage with AI-powered systems.

  • Indian Players: Haptik, Yellow.ai, Engati, Sketcha, Frontitude.


Governance and Orchestration Layer


  • This layer is responsible for the coordination, management and integration of AI models within the organisation’s broader IT infrastructure.

  • Indian Players: Neurocrafts, AiEnsured, augmentIQ,

[1] Market Study on Artificial Intelligence and Competition.

[2] Market Study on Artificial Intelligence and Competition.

[3] Market Research Future: India Artificial Intelligence Market Research Report Market Analysis (2019-2032).

[4] Tracxn Analysis 2025.

[5] Market Research Future: India Artificial Intelligence Market Research Report Market Analysis (2019-2032)

[8] Powerhouse in the Making: AI Market in India, Statista.

[10] 1Market Research Future: India Artificial Intelligence Market Research Report Market Analysis (2019-2032)

[12] Powerhouse in the Making: AI Market in India, Statista

[13] Market Research Future: India Artificial Intelligence Market Research Report Market Analysis (2019-2032)

[15] Ibid.

Comments

bottom of page