India’s economic growth is increasingly being driven by artificial intelligence (AI), clean energy and a rapidly expanding startup ecosystem. Now the world’s third-largest startup hub, India has more than 1.57 lakh DPIIT-recognised startups and over 100 unicorns, supported by government initiatives, rapid digital adoption and rising investment.
This entrepreneurial momentum is also transforming the country’s private space sector, with startups moving beyond proving launch and satellite technologies to building the infrastructure, manufacturing capabilities and downstream applications needed for a sustained commercial space economy.
Indian startups are also taking a more cost-conscious approach to AI, with OpenAI’s global head of startups, Marc Manara, noting that they consider AI expenses much earlier than their Silicon Valley counterparts. The trend is especially visible among consumer-focused and domestic-market startups, whose founders factor in AI costs well before scaling.
AI is also moving beyond startups and technology into critical sectors such as power generation. AI adoption in generation assets is projected to rise 65% by 2030, while an ENCIS survey found that 35% of Indian power companies have already integrated AI into their core operations. Nearly seven in 10 industry professionals believe power generation offers the greatest potential for AI-driven efficiency gains.
The growing demand for AI is fuelling India’s digital infrastructure. Data-centre capacity is expected to expand from 1.5 GW in 2025 to 7 GW by 2030, driving higher electricity demand. Reflecting the scale of the opportunity, Adani and Reliance have committed more than $210 billion towards AI-driven infrastructure and renewable energy through 2035, according to ENCIS.
To support this transformation, the Government of India is implementing the Rs 10,300-crore IndiaAI Mission, while states are developing complementary strategies. Maharashtra’s AI Policy 2026 aims to attract Rs 10,000 crore in investment and create over 1.5 lakh jobs by 2031. It proposes a Maharashtra AI Mission, training for two lakh youth and professionals, AI cities across five innovation hubs and an AI data exchange. The state also plans to support 5,000 MSMEs through a 20% subsidy on AI implementation, alongside a Rs 500-crore AI Startup Venture Fund and 12 AI incubators.
Tamil Nadu is developing ‘Arivagam’, India’s first dedicated AI and innovation city, featuring an AI university, skill centre, semiconductor testing lab and incubators. Karnataka, meanwhile, plans to establish India’s first government-led AI university and an AI hub to promote research, talent and innovation. Chief Minister D K Shivakumar said the hub will support AI R&D by startups, companies and academic institutions, while the university will focus on developing world-class talent and strengthening industry-academia collaboration.
