New Delhi: India’s generative artificial intelligence (GenAI) ecosystem witnessed significant growth in Q2 FY25, with startups raising $51 million in funding, a sharp rise from $8 million in Q1 FY25, according to a Nasscom report. This marks a sixfold quarter-on-quarter increase, positioning India sixth globally in GenAI startup ecosystems.
The Generative AI Tracker: Tech Industry Activity in Q2 FY2025 report by Nasscom highlighted a recovery in funding activity after a subdued Q1, with 20 funding rounds recorded. Year-on-year, total GenAI funding increased 3.4 times, largely driven by enterprise applications and Agentic AI. Notably, early-stage investments accounted for 77% of the funding rounds, which predominantly involved seed and angel investments.
Sangeeta Gupta, senior vice president at Nasscom, noted that the GenAI sector is transitioning from pilot projects to full-scale applications. She emphasized that strategic innovation and proof-of-concept conversions are key to future growth.
The report also observed a 25% rise in partnerships in Q2 FY25 compared to Q1, with collaborations focusing on product enhancement, go-to-market strategies, and global AI alliances. Key partnerships included Accenture’s collaboration with Unilever to boost efficiency and Genpact’s partnership with Volkswagen Financial Services to improve business operations.
India’s IT services sector is also tapping into the growing GenAI market, with Accenture reporting $3 billion in GenAI-related bookings, of which $1 billion has been realized. Similarly, TCS reported $1.5 billion in bookings tied to GenAI projects.
As the market evolves, the focus is shifting toward scaling impactful GenAI applications, supported by increasing investments in technology, talent, and partnerships.
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