In a major boost to its global standing in emerging technologies, India secured the 10th position globally for private investment in Artificial Intelligence (AI), with a total inflow of ₹11,943 crore (US$ 1.4 billion) in 2023, as per a recent report published by the United Nations Conference on Trade and Development (UNCTAD). This significant investment figure places India among the top AI-investing nations, trailing behind economic powerhouses such as the United States and China, yet standing tall as one of only two developing nations to have made it to the top 10 in AI funding.

The findings are part of UNCTAD’s annual ‘Readiness for Frontier Technologies’ Index, a comprehensive indicator that measures countries' capacity to adopt and adapt cutting-edge technologies like AI, robotics, nanotechnology, and big data. India showed considerable improvement in its overall position in this index, jumping from 48th place in 2022 to 36th in 2024, among a total of 170 evaluated countries. This leap is indicative of the country’s growing readiness to embrace transformative digital technologies and build an inclusive innovation ecosystem.

However, the report also brings into sharp focus some of India’s existing challenges in the AI domain. Despite the high volume of AI investment and a robust research environment, India ranked 99th in Information and Communication Technology (ICT) deployment, 113th in skills, 10th in industrial capacity, 70th in financial access, and 3rd in Research and Development (R&D) activity. These rankings underline the urgent need for infrastructure development and skill upgradation, even as India positions itself as a major AI player on the global stage.

In stark contrast, the United States led the global chart in AI private investment, attracting a staggering ₹5,71,577 crore (US$ 67 billion) in 2023. China followed closely with ₹66,541 crore (US$ 7.8 billion). These two countries continue to dominate the AI landscape, primarily driven by corporate R&D investments, advanced infrastructure, and talent pool. According to the report, 100 global firms, primarily based in the US and China, are responsible for 40% of global AI-related corporate research and development spending, showcasing a highly concentrated global AI ecosystem.

India’s performance is, nonetheless, impressive given the scale of its tech workforce and ongoing government efforts to foster AI innovation. The country is home to over 13 million software developers, making it the second-largest developer community in the world after the United States, according to GitHub activity statistics. Initiatives such as the India AI Mission, combined with dedicated AI research centres at the Indian Institutes of Technology (IITs), have been instrumental in propelling AI development and innovation across sectors.

Looking forward, the economic impact of Artificial Intelligence is projected to reach ₹4,09,48,800 crore (US$ 4.8 trillion) globally by 2033, demonstrating the massive growth potential and economic transformation AI can deliver. For India, this represents both an opportunity and a challenge. While investment and innovation continue to rise, concerns around AI-driven automation and job displacement loom large, with the UN estimating that up to 40% of global jobs could be at risk due to automation. For India, a country with a large population dependent on labour-intensive jobs, the reduction of cost advantages of low-wage economies could exacerbate social and economic inequalities.

To mitigate this, India must prioritize investment in AI education, skilling, and upskilling, ensuring that its workforce is future-ready. While India excels in R&D and has made remarkable progress in industrial AI applications, the gaps in skills development and ICT infrastructure need urgent attention. Policymakers must implement targeted schemes to bridge the digital divide, especially in rural and semi-urban regions, to ensure inclusive growth.

Moreover, in the broader landscape of frontier technologies, India is making strides in nanotechnology, a key enabler for AI and other emerging domains. However, global competition is fierce, with Germany leading in wind energy, Japan dominating electric vehicle innovation, and South Korea taking the lead in 5G wireless network deployment. To keep pace, India must not only expand its AI research ecosystem but also ensure that its regulatory frameworks support ethical and inclusive AI practices.

The report also highlighted that financial access remains a bottleneck in India's AI innovation pipeline. Startups and mid-level enterprises face difficulties in securing venture capital or institutional funding, which often restricts scalability and global outreach. Encouraging public-private partnerships, enhancing ease of doing business, and fostering a startup-friendly ecosystem will be essential to support long-term growth in AI.

To summarise, India’s rank as 10th globally in private AI investment and its ₹11,943 crore inflow in 2023 is a testament to the country’s growing digital strength and evolving innovation landscape. This progress, driven by initiatives like the India AI Mission and R&D focus in premier institutions, aligns with the global shift towards automation, smart technologies, and data-driven systems.

However, the road ahead demands strategic investments in skills development, ICT infrastructure, financial access, and ethical governance of AI. These measures will ensure that India not only sustains but strengthens its place in the global AI ecosystem and leverages it to achieve inclusive, equitable, and sustainable economic growth.

With global competition intensifying and AI’s influence expanding across industries—from healthcare and education to manufacturing and finance—India must embrace this momentum to lead the way in responsible innovation and digital transformation. The ₹11,943 crore AI investment in 2023 is a foundation upon which India can build a future-proof economy, driven by technology and rooted in inclusive growth principles.

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