New report shows rapid AI-driven economic growth fueled by open source innovation and global talent demand, positioning India for long-term success
NEW DELHI, India, Feb. 17, 2026 -- India AI Impact Summit -- The Linux Foundation, the nonprofit organization enabling mass innovation through open source, in partnership with Meta, today released a new report examining AI adoption in India and the economic and social opportunities the technology presents for the country.
Through a literature review and qualitative interviews, the report, AI for Economic and Social Good in India: Scaling Inclusive Growth for Entrepreneurs, Creators, and Local Economies, shows that 76% of Indian startups use open source AI, enabling cost-effective innovation and customization. India's AI market is projected to grow from $6 billion in 2024 to nearly $32 billion by 2031, which is fueled by strong startup momentum, global demand for Indian technical talent, and government leadership in digital public infrastructure. The research also underscores that India's deep and rapidly expanding talent pool, combined with high AI adoption and large-scale skilling initiatives, positions the country to navigate workforce transformation and capture long-term economic opportunity as AI adoption accelerates.
"India is leveraging open source to define its own unique trajectory in the AI revolution," said Hilary Carter, senior vice president of research and communications at the Linux Foundation. "This report highlights not only the scale of India's AI opportunity, but why the country is well positioned for long-term success – thanks to its talent base, startup ecosystem, and commitment to open innovation."
Open Source as a Catalyst for Economic Growth
India's AI momentum is powered by a unique set of structural strengths: a $200-billion-plus IT services industry tied into the global digital economy, one of the world's youngest and most digitally fluent populations, and a government with a proven track record of deploying nationwide digital public infrastructure. These conditions allow AI, and especially open source AI, to be adopted, localized, and scaled faster than in most markets. This combination enables localized innovation, lowering barriers for startups and small businesses, and supporting AI use cases across both the private and public sectors.
Key secondary research findings include:
- India's AI market has grown from $3.2 billion in 2020 to $6 billion in 2024 and is projected to reach nearly $32 billion by 2031
- India hosts more than 200,000 startups, ranking fourth globally for newly funded AI companies in 2024
- 76% of Indian startups use open source AI, enabling cost-effective innovation and customization
- India has the highest year-over-year AI hiring rate globally, positioning the country as a critical contributor to the global AI workforce
"We are witnessing a shift where India is utilizing its massive talent pool to solve real-world challenges at speed and scale that few other regions can match," said Arpit Joshipura, senior vice president and general manager of networking, edge and IoT at the Linux Foundation, and head of LF India. "With a supportive government mandating open source for critical infrastructure and a startup culture that is increasingly reliant on open AI tools, India is the ultimate sandbox for innovation."
India's Workforce Advantage in the Global AI Transition
AI poses significant risks of workforce disruption and inequality in India, with 45–69% of jobs in manufacturing, customer service, and retail sectors potentially being impacted by automation by 2030. These shifts are offset by India emerging as a global AI talent hub through rapid hiring growth and heavy investment in AI education, skilling platforms, and government-backed initiatives. Closing AI-driven economic divides will depend on large-scale upskilling investments, accessible AI infrastructure, and inclusive policies that ensure productivity gains translate into broad-based growth rather than concentrated advantage.
Key recommendations include:
- Strengthening AI readiness through workforce development, reskilling, and applied AI training programs – like the Skill India Digital Hub, which allows users to interact with an AI assistant to ask questions, find training centers, and discover jobs in their local language
- Build a national vision for open source AI, which includes encouraging broad-based use and procurement of open models and tools, investing in multilingual and low-connectivity infrastructure, funding research on secure and responsible AI, and investing in the service and support of open source infrastructure at public and private levels
- Incentivizing SMB adoption of AI tools to promote inclusive, equitable growth
- Adopt best practices on monitoring AI adoption and evaluating impacts on the economy while advancing open access research for emerging AI areas to develop the next generation of AI use cases that are suited to regional and cultural contexts
- Develop an actionable, national, multilateral framework rooted in best practices, treating AI as inclusive, digital public infrastructure
Scaling Social Impact
Beyond economic growth, the report highlights "AI for social good" as a defining feature of India's adoption story. By leveraging open source models, local developers are building culturally and linguistically relevant solutions to address real-world challenges.
Examples featured in the report include:
- Adalat AI: Applies open source AI to courtroom transcription and documentation, reducing judicial backlogs and improving access to timely information – a foundational requirement for economic activity and contract enforcement
- Farmers for Forests: Uses AI-powered monitoring and computer vision to support smallholder farmers transitioning to agroforestry, increasing incomes by up to 3–5x while enabling carbon sequestration and climate resilience in rural communities
- Caze Labs' MeTProAI: Deploys locally hosted open source models for clinical decision support, allowing physicians to access up-to-date treatment guidance while keeping sensitive patient data private and secure
- Bhashini and Sarvam AI: Use multilingual models to support India's 20+ official languages, expanding access to digital services and public infrastructure for populations historically excluded by language and literacy barriers
"India is already at the forefront of AI adoption, with its vibrant startup ecosystem creating innovative solutions tailored to the country's unique needs," said Rob Sherman, vice president of policy at Meta. "Open source AI coupled with pro-innovation regulation can supercharge India's AI ambitions – empowering local talent to build, adapt, and scale technologies not just for India, but for the world. "
This research is part of a broader Linux Foundation Research series examining how AI is being adopted, used, fine-tuned, and integrated into governments, enterprises, and everyday life around the world. As the sixth report in the series, it places India's AI adoption and use cases in a global context, allowing readers to compare patterns across APAC, Africa and the Middle East, Türkiye, Latin America, Canada, and global markets.
Read the full report: AI for Economic and Social Good in India: Scaling Inclusive Growth for Entrepreneurs, Creators, and Local Economies and explore the full Linux Foundation Research AI series.
About Linux Foundation Research
Founded in 2021, Linux Foundation Research explores the growing scale of open source collaboration, providing insight into emerging technology trends, best practices, and the global impact of open source projects. By leveraging project databases and networks and committing to best practices in quantitative and qualitative methodologies, Linux Foundation Research is creating the go-to library for open source insights for the benefit of organizations worldwide.
About the Linux Foundation
The Linux Foundation is the world's leading home for collaboration on open source software, hardware, standards, and data. Linux Foundation projects including Linux, Kubernetes, OpenChain, OpenSearch, OpenSSF, OpenStack, PyTorch, Ray, RISC-V, SPDX, and Zephyr provide the foundation for global infrastructure. The Linux Foundation is focused on leveraging best practices and addressing the needs of contributors, users, and solution providers to create sustainable models for open collaboration. For more information, please visit us at linuxfoundation.org.
The Linux Foundation has registered trademarks and uses trademarks. For a list of trademarks of the Linux Foundation, please see its trademark usage page: www.linuxfoundation.org/trademark-usage. Linux is a registered trademark of Linus Torvalds.
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