Is AI reshaping India’s business landscape? CCI study finds 67% startups focus on applications, 76% use open source tech

A recent survey by the Competition Commission of India (CCI) highlighted how artificial intelligence is “rapidly reshaping” India’s business landscape, driving efficiency and innovation, according to a PTI report.

The study found that around 67 per cent of Indian AI startups are primarily focused on developing applications. Further, a majority of 76 per cent of the surveyed companies said that they rely on open-source technologies in order to reduce costs and improve access, it added.

AI in India: Here’s what CCI study found — Key Highlights

• According to the study, “the core area of work for almost 67 per cent of respondents in AI startups in India lies in the layer of building AI applications.”
• “The adoption of AI technologies in India is rapidly accelerating across various user sectors. The integration of AI across industries is reshaping market structures and business strategies,” the CCI report stated.
• Further, the survey found that about 88 per cent of respondents use machine learning (ML) as the foundation for their AI solutions.
• While 66 per cent employ generative AI models such as large language models (LLMs).
• The use of natural language processing (NLP) stands at 78 per cent.
• And 27 per cent of startups are working in computer vision (CV).

Big takeaways: Big players supply open source models, adoption in India quick

As per the study, major tech players such as Amazon, Google, Meta, Microsoft and OpenAI are the big contributors when it comes to providing open-source technologies and algorithms that are used for model building.

Among Indian companies, it noted that the adoption of AI is “spreading quickly” across industries and transforming how companies operate.

AI adoption is wide in sectors such as banking and financial services, e-commerce, healthcare, logistics, marketing (automated decision making, demand forecasting, dynamic pricing, and personalised recommendations), and retail.

What are Indian companies using AI for?

• The study found that around 90 per cent of the businesses use AI to monitor customer behaviour.
• Some 27 per cent Indian companies said they use AI to track supply chain efficiency.
• Nearly 69 per cent use AI for demand forecasting.
• Around 24 per cent for pricing trend analysis.
• And 21 per cent for predicting inventory needs.

AI in India: What is CCI’s role in this space?

The survey report also highlighted that AI helps businesses improve productivity, reduce costs, and gain a competitive edge by offering better and more personalised services. However, it also warned that companies failing to adopt AI risk losing competitiveness in an increasingly AI-driven market.

Reacting to the findings of the study, Shivanghi Sukumar, Partner, Axiom 5 law chambers, said, “The CCI’s study adopts a thoughtful and forward-looking approach that aligns with the objectives of the IndiaAI Mission. The study highlights areas that could shape competition dynamics in the future, including emerging risks of algorithmic collusion, opacity in AI decision-making, and unequal access to data and compute. By flagging these issues early, the CCI acknowledges that AI could gradually reshape market structures”.

To ensure fair competition and safeguard consumer interests, the CCI said it will continue to focus on promoting a culture of competition compliance and preventing AI-driven anti-competitive practices.

The commission aims to support the development of a healthy and innovative AI ecosystem in India. (ANI)