As the global race to harness Artificial Intelligence (AI) intensifies, India’s Information Technology (IT) sector is positioned at a critical juncture.

While the potential for growth is immense, a recent report highlights the looming challenge of an inadequate AI talent pool, which could hinder the country’s ability to fully capitalize on this technological revolution. 

India’s IT industry, which was valued at approximately $250 billion in FY24, has long been a significant contributor to the nation’s economy.

With IT exports reaching $200 billion, the sector accounted for more than 7 percent of the country’s GDP in 2023.

However, the report points out that India’s software products exports were much smaller, at just $15 billion in FY24. 

The report projects that with the increasing integration of deep technologies such as AI, Generative AI, Blockchain, Augmented & Virtual Reality, India’s software products exports could skyrocket to $100 billion by 2030.

 

This anticipated growth underscores the massive opportunities lying ahead of India's digital economy. However, the optimistic forecast comes with a significant challenge; the country must dramatically scale up its AI talent pool to meet the demand.  

Industry experts have raised concerns that India’s current educational framework may not be adequately equipped to produce the volume and quality of AI professionals required to sustain such a growth. Despite producing a large number of engineering graduates annually, many of them lack the specialized skills needed in AI and related fields. This talent shortage could become a bottleneck, preventing India from realizing the full potential of the AI boom. 

To address this issue, there is a growing consensus that both the government and private sector need to invest heavily in AI- focused education and training. This could involve updating engineering curricula, fostering closer collaboration between industry and academia, and providing incentives for upskilling initiatives. Additionally, experts recommend the establishment of AI research centers and the provision of more funding for AI startups to spur innovation. 

As India stands at the precipice of an AI-driven transformation, the next few years will be crucial in determining whether the country can overcome its talent shortfall and position itself as a global leader in AI. The choices made today regarding education, investment, and policy will have a lasting impact on the future trajectory of India’s IT sector and its role in the global digital economy.