Agentic AI in Indian Business: Ushering in the Third Wave of Artificial Intelligence

Sharisha Sahay
Sharisha Sahay
Research Analyst - Policy & Advocacy, CyberPeace
PUBLISHED ON
May 5, 2025
10

The world of Artificial Intelligence is entering a new phase with the rise of Agentic AI, often described as the third wave of AI evolution. Unlike earlier systems that relied on static models (that learn from the information that is fed) and reactive outputs, Agentic AI introduces intelligent agents that can make decisions, take initiative, and act autonomously in real time. These systems are designed to require minimal human oversight while actively collaborating and learning continuously. Such capabilities indicate an incoming shift, especially in the ways in which Indian businesses can function. For better understanding, Agentic AI is capable of streamlining operations, personalising services, and driving innovations at scale.

India and Agentic AI

Building as we go, India is making continuous strides in the AI revolution- deliberating on government frameworks, and simultaneously adapting. At Microsoft's Pinnacle 2025 summit in Hyderabad, India's pivotal role in shaping the future of Agentic AI was brought to the spotlight. With over 17 million developers on GitHub and ambitions to become the world's largest developer community by 2028, India's tech talent is gearing up to lead global AI innovations. Microsoft's Azure AI Foundry, also highlighted the country's growing influence in the AI landscape.

Indian companies are actively integrating Agentic AI into their operations to enhance efficiency and customer experience. Zomato is leveraging AI agents to optimise delivery logistics, ensuring timely and efficient service. Infosys has developed AI-driven copilots to assist developers in code generation, reducing development time, requiring fewer people to work on a particular project, and improving software quality. 

As per a report by Deloitte, the Indian AI market is projected to grow potentially $20 billion by 2028. However, this is accompanied by significant challenges. 92% of Indian executives identify security concerns as the primary obstacle to responsible AI usage. Additionally, regulatory uncertainties and privacy risks associated with sensitive data were also highlighted.

Challenges in Adoption

Despite the enthusiasm, several barriers hinder the widespread adoption of Agentic AI in India:

  • Skills Gap: While the AI workforce is expected to grow to 1.25 million by 2027, the current growth rate of 13% is considered to be insufficient with respect to the demands of the market. 
  • Data Infrastructure: Effective AI systems require robust, structured, and accessible datasets. Many organisations lack the necessary data maturity, leading to flawed AI outputs and decision-making failures.
  • Trust and Governance: Building trust in AI systems is crucial. Concerns over data privacy, ethical usage, and regulatory compliance require robust governance frameworks to ensure the adoption of AI in a responsible manner.
  • Looming fear of job loss: As AI continues to take up more sophisticated roles, a general feeling of hesitancy with respect to the loss of employment/human labour might come in the way of adopting such measures.
  • Outsourcing: Currently, most companies prefer outsourcing or buying AI solutions rather than building them in-house. This gives rise to the issue of adapting to evolving needs.

The Road Ahead

To fully realise the potential of Agentic AI, India must address the following challenges :

  • Training the Workforce: Initiatives and workshops tailored for employees that provide AI training can prove to be helpful. Some relevant examples are Microsoft’s commitment to provide AI training to 2 million individuals by 2025 and Infosys's in-house AI training programs.
  • Data Readiness: Investing in modern data infrastructure and promoting data literacy are essential to improve data quality and accessibility.
  • Establishing Governance Frameworks: Developing clear regulatory guidelines and ethical standards will foster trust and facilitate responsible AI adoption. Like the IndiaAI mission, efforts regarding evolving technology and keeping up with it are imperative.

Agentic AI holds unrealised potential to transform India's business landscape when coupled with innovation and a focus on quality that enhances global competitiveness. India is at a position where by proactively addressing the existing challenges, this potential can be realised and set the foundation for a new technological revolution (along with in-house development), solidifying its position as a global AI leader.

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PUBLISHED ON
May 5, 2025
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