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AI in India’s Digital Transformation

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The technology and services industry in India is entering an exciting phase with tremendous growth and opportunities across different segments. Since the last couple of decades, India’s technology service industry is at the forefront and driving technology-enabled business transformations across the world. With initiatives like Aadhar, Aatma Nirbhar Bharat and Digital India along with technologies like Data Analytics and AI, India is not just transforming but leading the global market in digital transformations. 


While the global digital transformation market size is expected to grow from USD 469.8 billion in 2020 to USD 1009.8 billion by 2025, at a CAGR of 16.5%, India digital transformation market is expected to reach $710.0 billion by 2024, registering a CAGR of 74.7%. Major growth drivers of the market are the adoption of industry 4.0, the use of advanced technologies such as cloud, IoT, big data and analytics, mobility, and social media. Innovations around Data Analytics and AI are the most critical factor in driving business strategies and growth to bring forth an impact in the digital transformation journey. 

Organizations across industries and sectors are adopting transformation strategies and quickly adapting to new ways of working to serve their customers. Innovation and automation are being applied in product transformation, services and business models in organizations to maintain relevance. Data Analytics and AI using an enormous volume of data, coming from different sources and formats, such as structured (ERP, Database, etc.) and unstructured (social media and others) are helping organizations to innovate, stay relevant, better understand customer and behaviour, and make smart decisions. 


The use of data and AI is the focal point for organizations and management, driving their digital transformation journey. Digital transformation coupled with AI & Machine Learning can deliver optimum results and help in transforming core areas like BFSI, healthcare, citizen services, MSME, agriculture and manufacturing, with speed and scale. Organizations can build predictive models to bring a great deal of efficacy in digital optimization and automation and it can help scale processes much faster, allowing results to be delivered in seconds as compared to months. 


The basic element needed for AI to thrive is the availability of data and computing power. Advancement in technology has helped both areas; availability of greater computing power and large amounts of data. Businesses today are trying to harness data to gain a competitive edge over their counterparts. 

India Digital Transformation: AI Landscape in different Sector



The Government of India, in the 2018–19 Budget, had prioritized building technological capabilities and initiated a national programme to direct the efforts of the government towards artificial intelligence. NITI Aayog released India’s National Strategy for Artificial Intelligence (NSAI) in June 2018 called #AI for All, which combines the economic potential of AI with social development and inclusive growth, and positions India as the ‘AI Garage of the World’. With a vision to promote AI to the youth, MeitY, along with industry participation has launched the National AI Portal, which functions as a one-stop platform for all AI-related advancements in India, along with sharing important resources such as articles and information on AI-based companies and educational firms in India. Some of the key areas and initiatives where AI can play crucial roles are:


AI can help convert Smart Cities into Intelligent Cities by meeting the rapidly increasing demand of the urbanised population and providing them with a better quality of life, better traffic control to reduce congestion and enhance security using improved crowd management. 


AI in E-Pathshala by providing text-to-speech and text translation systems to aid easy availability of learning material in the many Indian languages as well encourage interoperability of teachers across states.  


AI in E-Prison using video analytics platforms to identify violations and illegal activities and flag them for swift action.


AI in Farmer Portal using image-recognition software, drone technology and machine learning to monitor crops, predict yields, encourage precision farming, stabilise yield, analyse soil quality, predict economic gains from future yields and predict advisories for weather, sowing, pest control, input control to help increase farmers’ income. 




Goods and Services Tax Network(GSTN) is another area where AI can help track and analyse the tax evasion problem along with its application in eGovernance and to ease the compliance burden

GOI has launched Project Insight, which leverages machine learning to track frauds and black money. 



AI could benefit the Khoya Paya portal by integrating the Automated Facial Recognition System (AFRS), to ensure seamless exchange of information to avert and solve crimes, find missing persons and apprehend delinquents. 


Swachh Bharat App uses AI to ascertain the beneficiary through facial recognition software and digitally affirming the state of toilets, and cross-checks photos with the GPS coordinates shared by smartphones. 


IRCTC Connect uses an AI-enabled chatbot called ‘Ask Disha’ in English and Hindi to help solve text and voice-based queries of users.


While the government has launched several initiatives to adopt AI in different areas, other sectors are also prioritizing their business by adopting AI. Some of the early adopters and areas are listed below :


BFSI sector is gradually opening up to adopt innovative solutions to transform the banking system with initiatives like Jan Dhan Yojana, UPI, and the BharatNet mission which is driving internet adoption across India. Areas, where AI can play a crucial role, are:

  • Digital Services to gain a competitive advantage, drive efficiencies and improve customer experience.
  • Robotics and Natural Language Processing (NLP) to enhance on-demand customer experience and satisfaction.
  • Adoption of algorithms in Investments to increase portfolio returns and reduce risks, both for institutional and retail investors.
  • AI-based financial management tools to deliver personalized financial management advice and alerts to customers.
  • Smart transaction analysis programs and tools to detect fraud and money-laundering transactions.


Industrial sector

AI is a core element of the Industry 4.0 revolution and use cases are spread across different areas like:

  • AI-driven design and blueprinting enable the development of digital prototypes before the production phase. 
  • Real-time predictive maintenance to reduce unplanned machine downtime. 
  • AI-based visual inspection for manufacturing detects anomalies, real-time tracking and recall of defective equipment. 
  • AI-based market demands prediction using location, socioeconomic and macroeconomic factors, weather patterns, political status, consumer behaviour and other data elements to s

optimize manufacturing supply chains and anticipate market changes.



AI is utilized across the entire supply chain for the eCommerce and Retail sector, starting with merchandise procurement & classification, and quality, billing and payments, logistics tracking, delivery, and even managing and tracking customer feedback and complaints. A couple of other use cases are:

  • Product recommendation for consumers on digital platforms to enhance the shopping experience
  • In-store assistance
  • Virtual fitting rooms
  • Customer behaviour prediction



The Telecom industry is one of the fastest adopters of AI and Machine learning in multiple areas of business, from improving network reliability to better customer experience to predictive maintenance. The most common AI applications in Telco are:

  • Predictive Maintenance and Network Optimization
  • Customer Satisfaction and experience
  • Better Customer Targeting and Personalized Upselling