Over the last two years, we have witnessed a steady increase in our percent of readership in India. Sometime in 2017, Bangalore became one of our largest sources of job applicants, and our single biggest city in terms of readers overtaking both London and NYC.
Given the Indian governments recent focus on developing a plan for artificial intelligence, we decided to apply our strengths (deep analysis of AI applications and implications) to determine (a) the state of AI innovation in India, and (b) strategic insights to help India survive and thrive in a global market with the help of AI initiatives.
We traveled to Bangalore in an effort to speak with experts from the Government of India, Indian AI startups, AI academic researchers in India and data science executives at some of the largest companies operating in India, including Reliance ADA, Amazon, AIG, Equifax, Infosys, NVIDIA and many more.
Through the course of this research our objective was threefold:
We have broken our analysis down into the following sections below:
Well begin by examining what we learned about AI adoption in India:
Since the early 90s, the IT and ITeS services sector in India has been of tremendous importance to its economy eventually growing to account for 7.7% of Indias GDP in 2016. In an attempt to capitalize on this foundation, the current Indian administration announced in February 2018 that the government think-tank, National Institution for Transforming India (NITI) Aayog (Hindi for Policy Commission), will spearhead a national programme on AI focusing on research.
This development comes on the heels of the launch of a Task Force on Artificial Intelligence for Indias Economic Transformation by the Commerce and Industry Department of the Government of India in 2017.
The industry experts we interviewed seemed to agree that artificial intelligence has certainly caught the attention of the Indian government and the tech community in recent years. According to Komal Sharma Talwar, Co-founder XLPAT Labs and member of Indias AI Task Force:
I think the government has realized that we need to have a formal policy in place so that theres a mission statement from them as to how AI should evolve in the country so its beneficial at large for the country.
Indeed its comments like Komals that made us realize that we should aid in determining a strategic direction for artificial intelligence development in India and learn as much as possible about the possible strategic value of the technology.
In our research and interviews, we saw consensus (from executives, non-profits, and researchers alike) that healthcare and agriculture would be among the most important sectors of focus in order to improve living conditions for Indias citizens.
Just as Google, Oracle, Microsoft, and Amazon are battling to serve the cloud computing and machine learning needs of the US government, the next three to five years may lead to a similar dynamic within India. As the Indian government pushes for digitization and enacts more AI initiatives, private firms will flock to win big contracts adding to the pool of funds to develop new technologies and spin out new AI and data science-related startups.
Mayank Kapur, CTO of Indian AI startup Gramener, says that the government is still the largest potential customer for data science services in the country. Other experts we spoke with have enunciated that more and more Indian startups and established tech firms are beginning to implement AI in their products and services.
Mr. Avik Sarkar, the Head of the Data Analytics Cell for NITI Aayog explains that the think-tank which has been tasked with spearheading Indias AI strategy is currently engaged in the following public sector initiatives:
The current areas of focus for AI applications in India are majorly focused in 3 areas:
With the governments growing interest around AI applications in India, Deepak Garg the Director at NVIDIA-Bennett Center of Research in Artificial Intelligence (andDirector LeadingIndia.ai) believes that there has been a significant growth in interest levels around AI across all industry sectors in India.
He explains that although AI attention is considerably smaller in India than in China or the USA, the increased AI interest has manifested itself in the following three ways:
1) Industries have started working to skill their manpower to enable themselves to compete with other global players
2) Educational institutions have started working on their curricula to include courses on machine learning and other relevant areas
3) Individuals and professionals have started acquiring these skills and are comfortable investing in upgrading their own skills.
Despite the initial enthusiasm for AI, there were also a few opinions from experts about a sense of unfulfilled potential and that the country could be doing far more to adopt and integrate AI technologies.
Another common theme we heard often during our interviews was that culturally speaking the cost of failure is much higher in India than the West. While failing in an attempt at bold innovation and grand goals might be seen as noble or brave in Silicon Valley or New York City (or even Boston), failure often implies a loss of face in India and some Asian countries. This has historically meant a lack of room for innovative experimentation.
Dr. Nishant Chandra, the Data Science Leader of Science group at AIG adds a valuable insight about the high stakes for failure in India and that cultural and economic factors play into raising these stakes:
Indian society is not as forgiving to failure in entrepreneurship as US or Europe. So far, this has led to ideas borrowed from other places and implemented after customization. Yet I believe, entrepreneurs will build upon the success of IT services industry and establish globally competitive AI companies in near future.
We caught up with Professor Manish Gupta at IIIT Bangalore Manish is also a startup founder (VideoKen) and former AI researcher at Xerox and Goldman Sachs India. He expressed his disappointment in Indias lack of global AI participation:
I think that we are not doing enough justice to our potential [in India]; I think we are really far behind some of the other leaders. I see a lot of American and Chinese companies at global AI conference like NIPS / AAAI and these two countries seem to be far ahead of the rest of the pack. I look at India as a country that ought to be doing a lot more.
A number of our interviewees mentioned the prevalence of copy-catting business models in India (taking a famous or successful business model in the USA or Europe and reconstructing it in India), as opposed to the invention of entirely new business models.
Google is not the copy-cat of another business in another country, nor is Facebook, Amazon, or Microsoft and many of the same interviewees we spoke with are hopeful that India will have its own global trend-setters as its technology ecosystem develops.
Our previous research on AI enterprise adoption seems to indicate that it may be another 2-5 years until AI adoption becomes mainstream in the Fortune 500 and even that is only at the level of pilots and initiatives, not of revolutionary results.
This learning phase evident given the state of AI adoption the Western markets may last longer in Indias relatively underdeveloped economy.
Aakrit Vaish, CEO of Haptik, Inc. also seems to suggest that in the next 10 years we can expect that understanding of AI and how it works will potentially be more commonplace among most technical industry executives:
India may go in the direction that China has gone, become their own economies. There are probably going to be pockets, Bangalore might be good at deep tech like robotics or research / Hyderabad being good at data/ AI training, Mumbai being good at BFSI and Delhi for agriculture and government. Like China, most solutions will probably be applied to the local economy.
Indias services sector (call centers, BPOs, etc roughly 18% of the Indian GDP) have a significant potential opportunity to cater to the coming demand for data cleaning and human-augmented AI training (data labeling, search engine training, content moderation, etc).
Komal Talwar from Government of Indias AI Task Force added her views on what the Indian governments future strategy around AI might be focused on:
We think AI could have a great impact in health sector. There is a scarcity for good doctors and nurses, with AI the machine can do the first round of diagnostics. Staff can carry machines with them to help cut down in the physical presence needed for doctors.
The government is really encouraging startups to have AI applications that really have a social impact (AI in health, AI in education, etc), where startups compete to solve social problems.
Has India woken up to artificial intelligence? Expert opinions on this topic seem mixed, yet through our analysis, we managed to distill the following themes:
Interested readers can learn more about AI applications in India today from our other articles about AI traction in some of Indias largest sectors:
The majority of our Indian AI respondents and interviewees showed optimism about Indias potential to be one of the key global players in the future of AI. Optimism about the prospects of ones own nations success seems a natural bias (and one that weve seen before in our geography-specific coverage in Montreal, Boston, and more) but Indias optimism isnt unwarranted.
Since the early 90s when the Indian economy opened up to foreign investment, the country has been considered by some economists as the dark horse among the larger economies in the world.
Historically, the slower adoption of IT services by domestic Indian companies (in some cases by even by a period of around 10 years) as compared to global competitors was an indicator of the unfulfilled potential according to some experts we spoke to.
Yet, most of the interviewees seemed bullish on the fact that this time around in the wave of AI, India is firmly backing its strengths as represented in the quote below from Aakrit Vaish Co-founder and CEO of Haptik, Inc.
The Indian foundation of IT services and business process outsourcing makes me believe that such AI training jobs will be even more lucrative for India than elsewhere in the future.
During the interview with him, Aakrit explained his stance with an example about the possibility that Indian BPO services providers could potentially be attractive in terms of skills and cost for tasks (which he believes will for a long time remain a manual effort) like cleaning and tagging of data in the near future.
We heard opinions from other experts favoring the view that India may be positioned well to take advantage of the AI disruption. Sundara Ramalingam Nagalingam, Head of Deep Learning Practice at NVIDIA India, shares his thoughts on some of the advantages India may have over other countries in terms of AI:
India is the third largest startup ecosystem in the world, with three to four startups being born here daily. We believe India has a major advantage over other countries in terms of talent, a vibrant startup ecosystem, strong IT services and an offshoring industry to harness the power of AI.
Kiran Rama, the Director of Data Sciences at the VMware Center of Excellence (CoE) in Bangalore also seems to agree that the cost-competitive talent in India will be an opportunity for companies looking to open offices in India:
There seems to be a lot of opportunity for companies that are setting u shop in India. Especially since there is a supply of data science talent at a good cost advantage. I also think there Indians are starting to contribute to the advancement of machine learning libraries and algorithms.
Subramanian Mani, who heads the analytics wing at BigBasket.com, an online Indian grocery e-commerce firm, reiterates the idea that the IT services background in India is an advantage.
He believes that the major difference between the software and AI waves is that although India was slow to adopt software service as compared to America, this time around with the AI wave, adoption will be much faster and only slightly behind the leading countries.
This is the second wave. The software wave was 30 years ago. Folks in India realized that theyve been able to scale software and I think AI / ML is an extension of software development.
While software was often taught through books and in classrooms exclusively, many of the latest artificial intelligence approaches are available to learn online along with huge suites of open-source tools (from scikit-learn to TensorFlow and beyond).
Going in, we knew that one of the key advantages for India would, in fact, be the very IT and ITeS sectors which will make it easy for Indian tech providers to transition into AI services, given that well-developed ecosystems have evolved over the past 25 years in cities like Bangalore and Hyderabad.
Manish Gupta, Director of Machine Learning & Data Science at American Express India, expressed optimism in Bangalore as an innovation hub:
Bangalore has always been seen as the Silicon Valley of India and today there are lots of analytics companies here. It has all the ingredients to be a leader in the AI space. The state government is interested in planning and grooming for startups in this space as witnessed by the launch of the Center for Excellence (CoE) in AI setup by the GOI and NASSCOM in Bangalore.
While the advantage from the existing Indian IT sector may have been more intuitive, Madhusudan Shekar, Principal Technology Evangelist at Amazon AWS explains through an example how Indias diversity and scale (generally considered a challenge) can be an opportunity to make the best out of a tough situation:
In India, people speak over 40+ formal languages in about 800+ dialects. There are 22 national languages and if you want to build a neural network for speech, India is the best place to build that neural net. If you can build for India, you can most likely build it for other parts of the world.
In this respect, India with all of its language challenges could be a petri dish for translation-oriented AI applications. The market for this technology especially when backed by the Indian government may well rival the kind of AI innovations developed around translation in other parts of the world.
Another insight that was oft repeated by the experts was around the potential to have access to vast amounts of data in India. To further explain, According to a report by the Telecom Regulatory Authority of India (TRAI) the total number of internet subscribers in the country as a percentage of the overall population increased by 12.01% from December 2013 to reach 267.39 million in December 2014.
Along these lines, Mayank Kapur Co-founder of Gramener cites the increased level of data collection and the scale to which it could potentially grow as an opportunity for India in public sector AI applications:
In the public sector, we have an advantage of scale the amount of data that can potentially be gathered is huge. For example, leveraging data to provide access to services is a huge differentiator in the healthcare sector for applications like disease prevention or nutrition.
Figure. Number of internet subscribers
in India in 2014 by access type (Source)
Juergen Hase the CEO of Unlimit- A Reliance Group Company, one of Indias largest private sector companies, expressed his thoughts during our research:
The direct switch to mobile platforms in India means that there are no legacy systems to deal with and new technologies can be developed from scratch.
As shown in the figure to the right, an overwhelming majority of Indias Internet subscribers gain access through mobile wireless networks.
As Juergen points out, what this means is that large-scale AI projects in India can be somewhat insulated from issues cropping up from legacy systems. This might also lead to a greater immediate mobile-fluency for Indias startup and developer communities, who need to appeal to an almost exclusively mobile market.
Juergen adds, in the future, we can expect that AI software will also potentially have this advantage in India as compared to developed countries where the ratio is more evenly distributed among mobile and fixed wireless users.
We think our business audience will indeed find the next quote from Avi Patchava, Vice President, Data Sciences, ML & AI InMobi, highly insightful in terms of gaining an overview of Indias biggest strengths with respect to the countrys ability to leverage AI. Avi neatly summed up what he believes are Indias four biggest strengths to face the upcoming AI disruption:
The following points became evident through our interviews about Indias AI strengths and opportunities:
While there were many favorable views on the future outlook of the Indian AI ecosystem, there seemed to be different views among experts regarding the challenges that the country might have to overcome to survive and thrive in the AI disruption.
We heard a significant number of experts allude to the fact that the hype around AI may still be very real in India and there exists here a common tendency to view AI as a discrete industry rather than the broad, core technology that it is (like the internet).
In addition to being misunderstood and not being properly leveraged, many of the experts we spoke with were candid about addressing what they see as relative weaknesses of the Indian AI ecosystem.
Aakrit Vaish from Haptik, Inc. shares his thoughts on the AI hype that he sees in the Indian tech scene today:
Today AI is getting a lot of attention in India but nobody knows what it is or what are the best applications for it. Theres a little of a spray-and-pray attitude across the board.
While AI hype is hard to escape in the tech press in any country our speaking engagements in India seemed to affirm the state ambiguity around AI. We received post-presentation questions from attendees (about AI taking jobs, about the definition of AI itself, about the ongoings of Google and Facebook) that seemed like less informed questions than we might hear from a similarly technical audience in Boston or San Francisco.
This may mostly be due to the fact that AI applications are less well understood, and genuinely knowledgeable AI talent is rarer. We might suspect that over the coming few years particularly in a tech hub like Bangalore wed see this knowledge lessen over time.
Co-founder of XLPAT Labs and member of Indias AI Task Force Komal Sharma specifically points out that even some of the government projects have faced issues in terms of receiving funding for initiating AI pilot projects. She seems to indicate that the current Indian AI and startup funding ecosystem is not mature enough to be comparable to the US or even China.
The problem that we have faced I think is funding in areas where our field is very niche. In India, IP is developing lots of interest, but were nowhere near the US or other countries.
Komal was far from being alone in her lamenting AIs lack of VC funding, and the sentiment of our respondents seems to be backed up by the data.
The World Economic Forum chart below features information from Ernst & Young:
Taken as a percent of GDP, Israels VC investments represent about 0.006% of GDP, while Indias investments represent around 0.002%. As the Indian economy continues to develop and if Indias entrepreneurship trend continues we should expect to see investment increase.
Madhu Gopinathan Vice President, Data Science at MakeMyTrip,Indias largest online travel company,touches on a point repeated by other experts as well. He thinks that the two underlying factors here are larger salaries lie in the corporate sector, which is potentially creating a dearth of mentors for the next generation of software developers looking to transition into AI and the availability of data.Academia and Industry collaboration is a serious issue in India. Although we have a lot of universities, the incentives are skewed towards the corporate sector. For example, people like me who have an understanding of the technology may not be inclined to teach the next generation at universities, since working at the larger companies is far more lucrative today.
Madhu believes that much of the AI upskilling of Indias development talent will occur on the job in the cutting-edge work environments of venture-backed companies, as opposed to in the classroom.
As Nishant Chandra from AIG puts it, the boom in the Indian IT services sector in the early 90s was partially born out of necessity India just did not have a good products ecosystem. India has historically not done well with products and according to the experts, there also seems to be a dearth of good talent specifically for design and user-interface functions.
Sumit Borar, Sr. Director Data Sciences at Myntra, the Indian fashion eCommerce firm, is of the opinion that the scale of AI talent in India is still very nascent although he expects this to change in the next three years:
Talent will be the biggest strength for India with respect to AI. But AI is still new, so current talent in the market is very limited but in 3 years time I think that will become a strength.
Industry-university partnerships where students can work with real world data science applications and reskilling of existing workforces (example: getting software engineers to look at statistics or vice versa) are just beginning to take shape in India (starting with the unicorns).
The cultural factors in India play a role in talent development here as explained by Nimilita Chatterjee SVP, Data and Analytics at Equifax:
I see issues in AI talent in India are at 3 levels:
The issues that Nimilita addresses above arent all that different from what we see in the United States (indeed in Silicon Valley) on a daily basis. It does seem safe to say, however, that experienced data science talent (more specifically: Talent who have applied data science and AI skills in a real business context) is much more sparse in India than it is in the USA at least for now.
Nilmilita also believes that another weakness for India today in terms of data access for AI applications in the finance sector stems from the fact that the Indian economy still operates primarily on cash. As of 2017, Indias Economic Times claims that cash comprises 95% of the Indian economy.
Although there is a small percentage of the population that is making the switch to digital transactions, she believes that this segment of the population is still not significant enough before AI adoption in this sector becomes widespread in India.
India moving away from cash and being comfortable on a mobile phone, however that part of the population is still small. It will come into play in the future, but today it is still an issue in the finance sector.
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