India’s ambition to become a global leader in artificial intelligence (AI) is at a crossroads, as the country grapples with both remarkable momentum in workforce transformation and persistent challenges in scaling its AI ecosystem. While Indian professionals and businesses are embracing AI with unprecedented enthusiasm, industry analysts and recent reports warn that funding constraints and talent shortages could blunt the nation’s competitive edge.
According to Feon Ang, Managing Director for Asia Pacific at LinkedIn, India is currently one of LinkedIn’s most energising growth stories. As of August 19, 2025, the professional networking giant boasts over 161 million members in India, with a staggering 20% year-on-year membership growth. This surge is not just a matter of numbers; it reflects a broader shift in how Indian professionals are approaching their careers. “Most recognise that careers aren’t linear paths, they’re more like squiggly lines,” Ang told The Economic Times. The appetite for new opportunities is palpable: at the start of 2025, 82% of Indian professionals said they planned to look for a new job, only a slight dip from 88% in 2024. Job applications per posting have risen by 19%, and applications per applicant are up by 7%—a sign of growing ambition and urgency.
This dynamism is mirrored by Indian business leaders’ embrace of AI. A remarkable 95% of C-suite leaders in India are prioritising AI skills, outpacing counterparts in Singapore (93%) and Australia (76%). AI is reshaping work in three major ways, Ang explained: augmenting roles by freeing people for higher-value tasks, disrupting jobs reliant on repetition, and elevating those that depend on uniquely human qualities like creativity and empathy. “As AI takes on more background tasks, professionals are bringing more of their uniquely human skills to the forefront,” Ang observed.
However, the AI revolution is not without its casualties. India’s largest tech firm, Tata Consultancy Services (TCS), recently announced mass layoffs, prompting the Karnataka state government to survey companies about AI’s impact on jobs. Sectors such as Technology, Retail, Wholesale, Financial Services, and Professional Services are already feeling the tremors of AI-driven change. Titles like AI Engineer are among the fastest-growing jobs, with skills in machine learning, natural language processing, and large language models in high demand. LinkedIn data shows that AI talent hiring in India grew by 33% year-over-year in 2024, underscoring the rapid adoption of the technology.
Yet, this rapid evolution brings to light persistent disparities. Women’s participation in the Indian workforce has risen impressively to 35% in 2025 from 28% the previous year, with the strongest gains in Education (40%), Government Administration (36%), and Healthcare (35%). But the gender gap persists as careers progress. LinkedIn’s data reveals that 80% of women in India work in roles likely to be disrupted by AI, compared to 75% of men. Even more concerning, only 20% of women feel prepared to adapt. “Skills-based hiring can expand the talent pool more than 11x in India, levelling the playing field,” Ang said. But she emphasised that inclusion must go beyond hiring, requiring safe workplaces, mentorship, and a culture where women can thrive and lead.
India’s AI story is also marked by a surge in small and medium business (SMB) engagement, especially outside the major metropolitan areas. SMBs are now LinkedIn’s fastest-growing customer segment in India, with engagement growing twice as fast in Tier 2 and Tier 3 cities, particularly in manufacturing, consulting, and IT services. This decentralisation is helping to spread opportunity and innovation across the country.
Gen Z professionals—those under 35—make up over 60% of India’s LinkedIn members, and they’re driving new trends in how work is pursued and presented. Video content consumption among this cohort jumped 36% year-over-year, and video creation is growing twice as fast as other formats. “They want real value, community, and clarity,” Ang noted. To support this, LinkedIn is offering free access through 2025 to top LinkedIn Learning courses, including Career Essentials for Generative AI.
Despite this vibrant ecosystem, India’s AI startup landscape faces formidable headwinds. According to a recent report from the National Association of Software and Services Companies (Nasscom), funding for mature Indian AI startups is nearly non-existent—less than 0.5% of what American startups have raised in 2025. In the first half of this year, 87% of the $122 million invested by venture capitalists in Indian AI startups went into early-stage companies, while late-stage funding amounted to less than $16 million. In stark contrast, U.S. startups—bolstered by billion-dollar rounds for giants like Anthropic and OpenAI—have collectively raised over $4.9 billion in the same period.
The disparity is not just in private investment. India’s government has announced a $1.2-billion AI Mission and an $11.5-billion research, development, and innovation scheme to boost AI startups. However, these figures pale in comparison to the $500-billion AI investment push in the U.S. and China’s $56 billion in government-backed AI funding as of June 2025. France, too, has made headlines with a $112-billion government initiative. Nasscom’s report points out that India has not reported a single late-stage funding round for AI startups in the past 18 months, and overall AI startup funding dropped from $320 million in 2023 to $190 million in 2024—a clear sign of a market correction and investor caution.
Why the caution? Investors are wary of the lack of strong engineering teams and the prohibitive cost of computing power in India. “A key issue here is that most of India’s startups are today building simple layers of automation on top of foundational work done by others. There’s very little effort at the end of the day that is going into building products that would underpin simpler applications in future—this is the same approach that India has taken many times in the past,” AI analyst Kashyap Kompella told Mint. Nasscom’s report underscores that 96% of overall private funding globally is directed at late-stage startups—those working on foundational technology—whereas India’s focus remains on early-stage ventures.
Industry stakeholders caution that India risks repeating past mistakes. In the 1990s, Indian IT firms focused on providing software services while U.S. companies built the core platforms—leaving India dependent on foreign technology. “There is a fundamental difference of approach as well, between India’s AI engineers and those in the US. The American market fundamentally rewards engineers for building their own product—and not creating simple applications that do not add to a nation’s ability to influence global technology,” said Jibu Elias, responsible computing lead for India at Mozilla Foundation.
Still, there are glimmers of hope. Abhishek Singh, chief executive of the India AI Mission, pointed out that India’s approach to building a government-backed repository of graphic processing unit chips—the backbone of AI infrastructure—could allow startups to develop foundational AI at a fraction of the cost. This strategy aims to circumvent the funding crunch and give Indian startups a fighting chance in the global AI race.
India accounts for nearly one-fifth of the world’s generative AI startups, second only to the U.S. The country’s vast, young talent pool, growing SMB ecosystem, and government initiatives provide fertile ground for innovation. But bridging the gap between ambition and execution will require not just enthusiasm, but sustained investment in research, foundational technology, and the people who build it.
As India stands at this critical juncture, its next moves will determine whether it can realise its AI leadership dreams—or watch from the sidelines as others shape the future.
