Artificial Intelligence (AI) has rapidly transitioned from an emerging technology to a pivotal component of India’s economic aspirations. With its growth trajectory suggesting that it could reshape decision-making and product design, AI is fundamentally altering competitive dynamics within various markets. In response, the Competition Commission of India (CCI) launched a comprehensive market study in April 2024, aimed at examining the competitive landscape of the AI ecosystem. Released on October 6, 2025, this study arrives at a crucial juncture as the AI industry is poised for exponential growth, marking the first systematic attempt to balance innovation with equitable competition in this burgeoning sector.
AI’s influence spans numerous industries, including healthcare, banking, logistics, and retail. Businesses harness these technologies for diverse applications such as demand forecasting, fraud detection, automated decision-making, and personalized user experiences. Globally, the AI market was valued at approximately USD 186 billion in 2024 and is projected to surpass USD 1 trillion by 2031. India reflects this trend, with its market growing from USD 3.2 billion in 2020 to USD 6 billion in 2024, with forecasts suggesting it could reach USD 32 billion by 2031. These figures not only indicate increased adoption but also underscore significant domestic innovation and skill development, with the Stanford AI Index Report 2025 ranking India among the top nations for AI skill penetration.
Despite this positive growth backdrop, the CCI’s market study has highlighted structural imbalances within the AI sector, specifically concerning dominance issues across various layers of AI applications and deployment. The identification of potential anti-competitive behaviors could spark discussions on building robust infrastructures that support the development of resilient AI startups in India.
The CCI has adopted a balanced and pragmatic approach in its findings, recognizing AI as a potential democratizing force in innovation rather than a threat. Approximately 76% of AI startups surveyed in India reported reliance on open-source technologies, demonstrating how AI can lower entry barriers and enhance operational efficiency. This is particularly beneficial for micro and small enterprises that previously lacked access to advanced analytics, now able to utilize accessible AI tools for tasks such as credit scoring and demand estimation. This perspective positions AI as a catalyst for inclusion, contingent on maintaining an open and competitive ecosystem.
To foster a competitive AI landscape, the study proposes a flexible roadmap focused on building an innovation-driven market. Recommendations include encouraging companies to conduct self-audits to identify competitive risks and emphasizing the need for transparency frameworks in AI decision-making processes. It also stresses the importance of enhancing access to open-source tools, affordable computing resources, data, and skills. This adaptive regulatory model from the CCI prioritizes dialogue and co-regulation over strict enforcement, reflecting a mature understanding of the constantly evolving digital market landscape.
One of the standout recommendations from the study involves bolstering institutional capacity within the CCI itself. By enhancing technical expertise in AI and machine learning, the CCI aims to better interpret market behaviors influenced by these technologies. The establishment of a think tank is also proposed to provide insights into the evolving interplay among technology, markets, and competition policy. This move aligns with the Committee on Digital Competition Law’s report, which similarly advocates for the CCI to develop digital market monitoring tools and analytical capabilities. Strengthening these internal competencies will be crucial as AI-driven markets become increasingly complex, with challenges related to algorithmic collusion and data access.
The release of the market study marks just the beginning of a more comprehensive effort. The next phase will require coordinated actions among the CCI, the Ministry of Corporate Affairs, the Ministry of Electronics and Information Technology (MeitY), and industry stakeholders to operationalize the recommendations. Establishing evidence-backed frameworks to identify anti-competitive practices specific to AI will be vital for maintaining predictable and proportionate enforcement. Furthermore, fostering international cooperation will be essential as AI supply chains and digital markets continue to expand beyond borders.
This market study represents a forward-looking step in India’s journey toward modern competition law. The aim is not to stifle innovation in the AI sector but to cultivate an environment conducive to sustainable and fair advancement. By emphasizing institutional capacity, transparency, and alignment of competition policy with market realities, India has the potential to emerge as a leader in responsible AI growth and governance. As AI increasingly becomes integral to the global economy, India’s challenge remains to balance openness with effective competition safeguards. The implementation of the study’s recommendations will be crucial in ensuring that AI serves as a tool for empowerment rather than concentration, marking this study as a foundational blueprint for the future of India’s digital competition policy.
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