India consolidates itself as a strategic market for artificial intelligence, thanks to its massive user base, digital infrastructure, and favorable regulations.
India has established itself as a new giant in the field of artificial intelligence, drawing attention from companies worldwide looking to leverage its massive user base, advanced digital infrastructure, and favorable regulations.
The country currently ranks second globally in OpenAI users and could soon reach the top position.
In August, OpenAI launched a more accessible version of its chatbot for the Indian market and announced the opening of an office in New Delhi. Sam Altman, co-founder of OpenAI, described India’s tech adoption as “unparalleled anywhere in the world.”
International competition for the Indian artificial intelligence market has led to the release of advanced tools at very low prices, aiming to attract massive users and gather valuable data. With approximately 900 million internet users, India stands as a strategic market, surpassed only by China.
Unlike China, India offers an open field for U.S. companies, with an ecosystem dominated by Android and WhatsApp, which has over 500 million active users.
E-commerce giants such as Amazon and Flipkart, owned by Walmart, lead the online retail sector, facilitating the adoption of artificial intelligence services.
However, turning this user volume into profitability is challenging: companies like Netflix charge only USD 1.69 per month in India, compared to USD 7.99 in the U.S. For artificial intelligence, processing costs are high, reaching USD 0.07 per million tokens, with no geographic discounts.
Companies like Perplexity acknowledge that offering free services initially is economically challenging but allows them to demonstrate value and convert users into paying customers.
Experts note that India functions as an ideal “testing ground”: its heterogeneous user base allows the study of preferences and behaviors, such as voice versus text interaction. The data collected contributes to improving artificial intelligence models globally.
India boasts a robust digital infrastructure, known as “India Stack,” including biometric identification and electronic payments, enabling digital inclusion and generating high-value data for training international models. Additionally, the regulatory framework allows cross-border data transfer, enhancing its attractiveness to foreign companies.
However, the massive influx of international companies raises local concerns about competition with domestic startups.
Some analysts warn that the influence of U.S. tech firms could limit the development of homegrown solutions.
Ultimately, India has the potential to become a global leader in artificial intelligence, whether through the sheer size of its user base or the development of indigenous technology. Its role in the global digital economy will be critical in the coming years and will shape the distribution of technological innovation worldwide.
