India’s GenAI Startups Boom: 3.7X Growth, $990M Funding In H1 CY2025: Report

The generative artificial intelligence (GenAI) startup ecosystem of India is currently at a transformative inflection point in 2025, rapidly scaling in size, deepening in capability, and becoming more strategically relevant to enterprises, policymakers, and the broader technology landscape.

India Leads GenAI Startup Hub

According to a report by NASSCOM, India’s GenAI startup landscape has witnessed 3.7 times growth in cumulative startups, reaching more than 890 by the first half of 2025. GenAI application startups alone have grown 4 times to cross 740, contributing  nearly 83% of the total.

In the Indian GenAI landscape, pivoting has been a defining trend, with 63% of Indian  GenAI startups pivoting their model or focus in the past year, largely toward vertical SaaS and application-focused models, the report added.

Additionally, the cumulative funding in Indian GenAI startups increased by 30% year-on-year (YoY), touching $990 Mn by H1 CY2025, though this still lags significantly behind global peers.

According to the report, India is emerging as a hub for vertical AI specialists, with the largest rounds going to startups solving domain-specific problems in regulated industries.

The Shift From Exploration To Deployment

The report also found out that GenAI use cases are also shifting from exploration to deployment, with BUs driving purchasing decisions.

Nearly 64% of founders are focused on model efficiency, yet 58% lack a sustainable compute strategy, revealing a major gap in operational readiness and cost planning.

Startups are sophisticated in their data approach as 79% of them use proprietary customer data, and 45% augment use synthetic data for better fine-tuning and accuracy, the report noted.

Additionally, the technology stack has evolved significantly, with most Indian startups now using Autoregressive models, indicating strong alignment with global trends.

Further, despite the rise in enterprise interest, 30% of startups report no active partnerships, and regulatory hurdles and IP protection concerns remain the top two concerns with such collaborations for the second year in a row.

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