In recent years, India has solidified its position as a major player in the global generative artificial intelligence (GenAI) landscape. According to the latest report by Nasscom, India ranks sixth among major economies in the share of GenAI startup ecosystems.
The Indian GenAI startup ecosystem has witnessed a remarkable surge in funding, with a sixfold quarter-on-quarter increase in Q2 FY25. This growth is driven by investments in enterprise applications and Agentic AI. In fact, Indian GenAI startups raised a staggering $51 million in Q2 FY25, up from just $8 million in Q1 FY25.
The report highlights that over 90% of GenAI funding in Q2 FY25 was directed towards three startups – Nurix AI, Dashtoon, and Mihup. Early-stage investments accounted for 77% of all rounds, including angel and seed funding. Interestingly, the majority of funding rounds remained below $12.5 million in seed funding and $15 million in Series A funding.
The report also notes that the GenAI landscape is evolving rapidly, reshaping technology service providers and unlocking new capabilities. As Sangeeta Gupta, senior vice president and chief strategy officer at Nasscom, puts it: "The generative AI landscape is evolving rapidly, reshaping technology service providers and unlocking new capabilities. Providers are re-evaluating strategies and increasing investments in technology and talent."
The report highlights the rise of impactful applications that enhance productivity as a key trend in India's GenAI space. Future success will rely on strategic innovations, pilot project results, and lessons learned along the way.
Furthermore, the report notes that providers are now prioritising the conversion of active proofs of concept (PoCs) into production. This is reflected in the rise in partnerships, with diverse but impact-driven partnerships emerging to enhance product capabilities, establish joint go-to-market strategies, forge global AI alliances, support government-led skilling initiatives, and expand GenAI platform offerings.
Some notable partnerships include Accenture and Unilever, where the latter is adopting GenAI to drive efficiency and improve business agility. Similarly, Genpact's partnership with Volkswagen Financial Services is among others highlighted in the report.
The GenAI revenue pipeline among IT services providers is also strengthening. Accenture reported $3 billion in bookings, with $1 billion realised, while TCS reported $1.5 billion in bookings.
With its strong track record of innovation and growth, India's app startup ideas are poised to revolutionize the AI landscape.