The Competition Commission of India (CCI) has released a comprehensive market study examining how artificial intelligence (AI) is reshaping competition across industries in India. Conducted by the Management Development Institute in Gurgaon, the *Market Study on Artificial Intelligence and Competition* provides the first large-scale assessment of India’s AI ecosystem, analyzing market structure, competitive trends, and regulatory implications.
According to the report, India’s AI market has doubled from $3.2 billion in 2020 to $6.05 billion in 2024 and is projected to grow to $31.94 billion by 2031. The study positions AI as a cornerstone of digital transformation, highlighting its rapid integration across sectors such as banking, financial services, healthcare, retail, logistics, and marketing. Globally, the AI industry is expected to reach $1 trillion by 2031.
The CCI report outlines a multi-layered “AI stack” that maps the industry’s value chain — from data collection and computing infrastructure to model development, deployment, and governance. Global technology giants like Amazon Web Services, Google, Microsoft, and NVIDIA dominate India’s AI infrastructure and data layers, while domestic startups are emerging in application development. Nearly 67% of Indian AI startups are focused on building AI applications, with 76% using open-source technologies and 88% leveraging machine learning as their primary tool.
The study identifies both the competitive benefits and risks posed by AI adoption. On the positive side, AI enhances efficiency, productivity, and innovation, giving adopters a strong market advantage. However, it also introduces new competition challenges, including data concentration, ecosystem lock-in, algorithmic collusion, and opaque decision-making systems. Around 37% of surveyed startups expressed concern about potential AI-facilitated collusion, while others pointed to risks of price discrimination and predatory pricing.
CCI notes that pricing algorithms—especially self-learning and signaling algorithms—may unintentionally result in coordinated pricing behavior or discrimination, complicating enforcement in digital markets. The report also flags the dominance of large firms across the AI value chain, citing barriers such as limited access to high-quality data, expensive compute resources, and shortages in AI talent. The government’s IndiaAI Mission, backed by ₹10,300 crore, aims to address these challenges by expanding compute infrastructure, supporting startups, and improving AI skills and governance.
The study emphasizes that India’s regulatory landscape is evolving to meet these challenges. The Competition (Amendment) Act, 2023, introduces provisions for hub-and-spoke cartels and deal-value thresholds, allowing the CCI to better scrutinize digital and AI-driven markets. Complementary initiatives, including the Digital Personal Data Protection Act, 2023, and MeitY’s AI policy efforts, underscore a broader strategy of balancing innovation with fair competition and consumer protection.
To promote responsible AI and safeguard market integrity, the CCI plans to launch conferences, advocacy workshops, and inter-regulatory collaborations. It also recommends that enterprises conduct self-audits of their AI systems to detect potential competition issues and adopt transparency measures to reduce information asymmetry. A guidance note annexed to the report provides a framework for such self-audits.
Ultimately, the CCI’s market study calls for a “competitive, dynamic, and innovative AI ecosystem” grounded in transparency, fairness, and compliance. As AI continues to redefine India’s economy, the Commission’s findings lay the groundwork for ensuring that technological advancement goes hand in hand with open and equitable markets.
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