Get All Access for $5/mo

Indian AI Talent Drought: a Myth Or Reality? Despite all the intellect and prowess available in the country, investors and founders find the quality of AI-skilled talent challenging

By Paromita Gupta

You're reading Entrepreneur India, an international franchise of Entrepreneur Media.

Geeta Bisht

With over 6,000 Artificial Intelligence and 60 Generative AI start-ups, India is poised to become an AI hub in the future. Government initiatives such as the IndiaAI Mission, the National AI portal, AI for India 2.0, and the US-India AI Initiative are aiming to ensure this goal is accomplished.

The Information and Technology (IT) industry was estimated to have employed 5.43 million professionals as of March 2023, while 25,237 students passed from 23 branches of Indian Institutes of Technology alone in 2023.

Despite all the intellectual prowess available in the country, investors and founders find the quality of AI-skilled talent challenging. The concern is aggravated due to the prolonged practice of top IT professionals moving overseas. "We need more AI researchers. Where are they going to come from? ... 20 per cent of the global AI researchers are of Indian origin, and we should bring them back. Most of them are in the US, but we should bring them back the way China did over the past 15 years," said Rajan Anandan, managing director, Peak XV at the Global IndiaAI summit.

According to a Deloitte India and Nasscom report, the demand for Indian AI talent is projected to grow from 600,000–650,000 to more than 1,250,000 by 2027. However, apart from reclaiming the talent abroad, there is a need to improve the quality of these professionals to meet the demand.

THE PRESENT SCENARIO

The Stanford AI Index 2024 reported that India tops global AI skill penetration rate and AI talent concentration. AI talent concentration has increased by 263 per cent from 2016 onwards in India. Xpheno, a specialist staffing firm, revealed that the active pool of senior AI engineers building core AI products and services in India was less than 2,000. On the other hand, Nasscom projected data that 650,000- 700,000 people were trained in AI across top-tier tech companies. So, what's the actuality? AI has a broad spectrum of expertise, having AI experts who specialise in developing core technologies on one end with engineers who are trained to build AI enhancements on top of existing systems or features on the other.

Strong foundations in language programs such as Python, C++, Java, TensorFlow, and PyTorch continue to be non-negotiable. "Classroom-trained engineers are not sufficient; it's crucial to have candidates with experience in real customer engagements, dealing with challenges related to scale, privacy, and accuracy," said Ganesh Gopalan, co-founder and CEO, Gnani.ai.

"While both are valuable, the latter focuses more on implementation and optimisation than foundational AI development," said Ramesh Parthasarathy, SVP, Technology, Freshworks. He emphasised understanding algorithms, data structures, and mathematics, particularly linear algebra, calculus, and probability. Concurred Gopalan, "There is talent out there, but the real opportunity lies in identifying the right attitude and a strong willingness to learn."

Samiron Ghoshal, senior partner, technology, Transearch India feels that the country is at par with developed nations like the United States and China when it comes to the number of individuals efficient in software development, foundational AI and data analytics.

THE REAL CHALLENGE: FUNDING OR TALENT?

Anandan stressed that the real issue in the space was the lack of qualified AI researchers, rather than capital, "There is no shortage of capital." Bessemer Venture Partners reported that 2024 funding is expected to exceed 2023's figures by approximately 25 per cent, with nearly USD one billion in new venture funding for Indian startups. According to Gopalan, the pool of skilled engineers with experience in real-world projects is small, hence "funding won't fully address the hiring challenge." so, how is the overall AI talent currently available in the Indian market? "The Indian talent market has a growing pool of AI talent, with many skilled professionals emerging from top universities and tech institutions. The country is becoming a hub for AI innovation, supported by a robust software industry and increasing investments in technology, both by digitally native startups and large companies innovating to stay relevant. Both ends of the spectrum are equally lucrative for AI talent," said Parthasarathy.

As per TeamLease Digital data, the demand-supply gap in AI talent stood at 51 per cent.

THE ROAD TO QUALITY

1. Evolving education preferences: Fostering collaboration between industry and academia will play a major role in elevating AI skills for professionals (experienced or fresher) in India. In 2024, the Maharashtra Health and Technical Common Entrance Test saw over 70 per cent of applications for computers and IT-related courses including AI, machine learning and data science. Tamil Nadu Engineering Admissions' overall seat allotment went up by 13 per cent. The increase in uptake was driven to a considerable extent by the demand for AI and related courses among students.

The AI inclination is not only seen in physical environments. The India Brand Equity Foundation reported that 2023 saw a remarkable 50 per cent surge in enrolments for online courses focusing on AI and ML. For engineering students, AIfocused skills are crucial, "While colleges provide a foundation, to truly excel in this field, students must seek out external resources and practical experience. Colleges cannot always provide students with holistic knowledge," shared Mahika Tyagi, a Delhi-NCR based final-year engineering student.

2. Upskilling and reskilling: Players like Tata Consultancy Services, Infosys, Wipro, HCLTech, and Tech Mahindra are actively training their IT workforce in AI to enhance their capabilities and meet the growing demand for AI solutions. TCS, Infosys and Wipro collectively trained over 775,000 employees in generative AI (GenAI) capability in 2023-24.

However, the fear of AI replacing software engineers continues to linger. A recent study by Great Learning revealed that 67.5 per cent of engineers felt AI was negatively affecting their jobs, while 87.5 per cent viewed upskilling as essential to protecting their careers amid technological disruption. François Chollet, developer of Keras, feels that there will be 10 million new coding jobs in the next five years. For instance, code optimization will have AI algorithms analyse vast amounts of data to suggest improvements, enhancing the efficiency of a code.

Shrijeet Mishra, Chief Innovation Officer and Head Group Services, Aditya Birla Group shares that companies that educate their employees on how AI can improve their work will be more successful in easing fears and fostering a collaborative environment. "The concern of how it will impact their job gets reduced and jobs will metamorphosize," explained Mishra.

"Organising learning workshops led by experienced Gen AI engineers, hosting hackathons, and assigning challenging tasks based on real-world problems are effective ways to train the right candidates," Gopalan added.

3. Government training and awareness initiatives: The government's interest in elevating the AI segment holistically has seen the launch of several initiatives, missions, and policies. The 'YUVAi: Youth for Unnati and Vikas with AI' programme will enable school students between classes 8th and 12th with AI tech and social skills in an inclusive manner. The National Education Policy 2020 saw the proposal to introduce AI and coding in the school curriculum from class six onward. In July, the Ministry of Skill Development & Entrepreneurship launched a free online training programme, "AI for India 2.0." The programme will cater to college students, fresh graduates and early professionals. The Ministry of Electronics and Information Technology with the 'FutureSkills PRIME' programme will focus on re-skilling/up-skilling IT manpower for employability in 10 new/emerging technologies including AI.

COMING TIMES

Nasscom and BCG predict that India's AI market will reach USD 17 billion by 2027 at a CAGR of 25-35 per cent. While brain drain will remain a problem; it is slowly but surely changing. According to a BCG report, the number of Indians willing to work abroad has declined from 78 per cent in 2020 to 54 per cent in 2023. "Companies need to look beyond regional boundaries to be successful in tapping into the talent pool," shared Parthasarathy. "As skill enhancement progresses, we anticipate a rising demand for midlevel and senior roles, particularly in architecture and program management. The continued evolution of applied AI technologies will drive innovation and create exciting opportunities within the industry," added Ghoshal.

On how startups can elevate their existing AI talent, Parthasarathy said that "startups should join hands and create an ecosystem" to stimulate practical learning and innovation. "We also foresee an increase in AI-based SaaS startups, fostering a dynamic entrepreneurial environment. This wave of innovation not only has the potential to create new unicorns but also to position India as a key player in the global AI landscape. The coming years hold tremendous promise, and we can look forward to a vibrant and thriving AI ecosystem in India," Ghoshal concluded.

Paromita Gupta

Entrepreneur Staff

Features Writer with Entrepreneur India

Covering news and trends in AI and Metaverse segments. An avid book reader running her personal blog on the side. You may reach me at paromita@entrepreneurindia.com. 
Side Hustle

At 16, She Started a Side Hustle While 'Stuck at Home.' Now It's on Track to Earn Over $3.1 Million This Year.

Evangelina Petrakis, 21, was in high school when she posted on social media for fun — then realized a business opportunity.

Business News

Remote Work Enthusiast Kevin O'Leary Does TV Appearance Wearing Suit Jacket, Tie and Pajama Bottoms

"Shark Tank" star Kevin O'Leary looks all business—until you see the wide view.

Health & Wellness

I'm a CEO, Founder and Father of 2 — Here Are 3 Practices That Help Me Maintain My Sanity.

This is a combination of active practices that I've put together over a decade of my intense entrepreneurial journey.

Growing a Business

Why 'Founder Mode' is Not a One-Size-Fits-All Solution to Leadership

The founder-driven approach can boost a business's growth, but transitioning from "founder mode" to a balanced leadership style is essential for sustained success and scaling.

Growing a Business

PR vs. Marketing — Which One Delivers Better ROI for Your Business?

PR builds trust and credibility over time, while marketing drives short-term sales through targeted campaigns, making both essential for business success, depending on goals and budget.

Business News

San Francisco's Train System Is Still Run on Floppy Disks. It May Finally Get an Upgrade.

Officials approve a $212 million plan to replace its wildly outdated train control system.