India’s AI market to hit $31.9 billion by 2031; Marketing, retail, and e-comm lead in adoption
A new market study, “Artificial Intelligence and Competition,” released by the Competition Commission of India (CCI), reveals that the Indian AI market has doubled in size- from $3.2 billion in 2020 to $6.05 billion in 2024.
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The marketing ecosystem in India is undergoing a seismic transformation powered by artificial intelligence (AI). As brands compete for consumer attention in an increasingly fragmented digital landscape, AI has emerged as the linchpin for hyper-personalised engagement, predictive insights, and creative efficiency.
A new market study, “Artificial Intelligence and Competition,” released by the Competition Commission of India (CCI), reveals that the Indian AI market has doubled in size- from $3.2 billion in 2020 to $6.05 billion in 2024, and is expected to reach $31.94 billion by 2031, growing at a staggering pace.
Within this, AI adoption in marketing, retail, and e-commerce is among the fastest-growing segments, projected to expand from $1.27 billion in 2025 to $15.7 billion by 2032, reflecting a CAGR of over 43%.
This explosive growth underscores a larger shift in how companies conceptualise and execute marketing. From automated content generation to real-time bidding and consumer sentiment tracking, AI is no longer an experimental add-on—it’s at the core of strategic marketing transformation.
The New Marketing Engine: Data, Decisions, and Design
AI has fundamentally redefined how marketers understand and engage audiences. Machine learning (ML) and natural language processing (NLP) now enable marketers to craft messages that resonate more deeply and adapt to changing consumer behaviours in real time.
Generative AI (GenAI) tools have revolutionised content creation, allowing brands to produce blogs, social media posts, and ad creatives in seconds. Nykaa, for instance, uses an AI-powered virtual assistant that not only helps shoppers find products but also offers video consultations and personalised recommendations. Similarly, Spotify’s globally acclaimed “Wrapped” campaign showcases how AI transforms user data into emotional storytelling—turning analytics into art.
Read more: AI revolutionises Indian retail as investments set to reach US$22 billion by 2027: Deloitte India
Even legacy giants are embracing AI creativity. Coca-Cola’s ‘Create Real Magic’ platform, built with OpenAI and Bain & Company, lets fans co-create digital artwork for potential inclusion in official campaigns, blending automation with participatory marketing.
Beyond creativity, AI-powered analytics are redefining media planning and performance marketing. Through programmatic advertising, brands now automate ad buying, optimise bids in real time, and ensure that every rupee spent reaches the right audience. Publications like The Economist have leveraged AI-driven targeting to reverse readership decline by identifying and engaging with hesitant readers through hyper-focused digital campaigns.
Retail and E-commerce
In retail, generative AI and predictive analytics are reshaping everything from supply chains to storefronts. By 2025, GenAI alone is expected to boost retail profitability by 20%, according to CCI’s findings. The technology is driving cost reduction, improving customer experiences, and fuelling product innovation.
India’s e-commerce sector, valued at $125 billion in FY24, is forecast to grow nearly threefold to $345 billion by FY30. Much of this growth will be underpinned by AI adoption- from personalised recommendations and demand forecasting to dynamic pricing and logistics automation.
As per the study, the AI market size in e-commerce and retail has surged from $0.33 billion in 2019 to $0.86 billion in 2024, with projections to hit $15.7 billion by 2032. The adoption of AI allows platforms to adjust prices dynamically, manage inventory more efficiently, and deliver contextual, personalised shopping experiences that keep users coming back.
Smarter Logistics
AI is also driving efficiencies across logistics and transportation, with 88% of companies in the sector already using AI for demand-based inventory management and real-time fleet tracking, according to a NASSCOM survey cited in the study.
The logistics AI market grew from $0.14 billion in 2019 to $0.40 billion in 2024, and is expected to reach $6.77 billion by 2032, growing at a CAGR of 41.9%. Predictive algorithms now allow companies to anticipate demand spikes, optimise routes, and reduce operational costs—all while improving service reliability.
Regulation and Responsibility
While AI promises immense economic and marketing value, it also introduces new competition risks. The CCI report highlights concerns around algorithmic collusion, data monopolies, and price discrimination. As large tech companies control vast datasets and infrastructure, smaller firms often face high entry barriers, including cloud service costs and limited access to proprietary data.
To address this, India has enacted a series of regulatory reforms. The Competition (Amendment) Act, 2023 introduced mechanisms for settlement, commitment, and deal-value thresholds to tackle digital-era challenges. The upcoming Digital Competition Bill, 2024 aims to pre-empt anti-competitive conduct by large platforms, while the Digital Personal Data Protection Act (DPDPA), 2023 strengthens consumer privacy and data governance- both critical to responsible AI deployment in marketing.
Additionally, the CCI recommends that companies implement AI self-audits to ensure compliance with competition laws and prevent anti-competitive algorithmic behaviour.
India’s AI revolution represents both an opportunity and a test—of innovation, ethics, and adaptability. For marketers, it marks a new chapter where success depends on combining data intelligence with human insight.
As AI’s footprint expands—from chatbots to creative design to decision-making—businesses that embrace transparency, ethical data use, and explainable AI will be better positioned to win consumer trust.
With marketing-driven AI applications alone expected to contribute over $15 billion by 2032, the message is clear: in India’s next growth decade, competitive advantage will belong to those who can align machine intelligence with human empathy.
