India's GenAI Ecosystem Thrives Amid Global Downturn

India's Generative AI ecosystem experiences significant growth, with quarterly investments surging sixfold, primarily driven by B2B and productivity solutions. Despite a global decline, Indian GenAI startups secured USD 51 million in Q2FY2025, reflecting a robust revival in funding and innovation. Major tech companies are prioritizing partnerships and advanced skilling.

Amid a global investment slump, India's Generative AI sector has demonstrated exceptional growth, achieving a sixfold increase in quarterly investments. This surge, influenced largely by business-to-business and productivity solutions, is outlined in a recent report by the IT industry body, Nasscom.

Nasscom's 'Generative AI Tracker: Tech Industry Activity in Q2FY2025' report highlights a vigorous resurgence in both funding and innovation within India's GenAI landscape. Indian startups witnessed over USD 51 million in funding in Q2FY2025, marking more than a sixfold rise quarter-on-quarter. This growth was spearheaded by B2B and agentic AI startups, with a record 20 funding rounds completed in Q2 after a slow Q1.

Despite a global drop to USD 4 billion in Q2FY2025—down 2.3 times from Q1—India's tech companies are steadily launching GenAI platforms with integrated capabilities. Strategic collaborations in the industry increased by 25%, focusing on product innovation and skilling initiatives. As the GenAI ecosystem matures, enhanced revenue channels and effective Proofs of Concept are fueling its expansion, reshaping service provider strategies and unlocking new technological capabilities.

(With inputs from agencies.)