India’s artificial intelligence startup ecosystem has expanded sharply over the past year, with the number of Generative AI (GenAI) startups more than tripling, according to the Economic Survey 2025–26.
The survey found that the number of active GenAI startups rose from about 240 in the first half of calendar year 2024 to over 890 in the first half of calendar year 2025. This rapid rise has made GenAI one of the fastest-growing segments within India’s technology startup ecosystem.
India is now home to around 32,000 to 35,000 startups, making it the third-largest startup ecosystem in the world, according to the survey. More than 2,000 startups were added in CY25, including over 900 funded startups during the year.
Funding into the GenAI segment has also increased. The survey showed that cumulative funding for GenAI startups rose from $606 million in the first half of CY2023 to $990 million by the first half of CY2025.
Most funding in the GenAI space has gone towards applications. According to the Survey, 63% of GenAI funding was directed at application-based companies, while 30% went to infrastructure and model development, and 7% to services.
The survey also highlighted that GenAI startups are concentrated in a few states. Karnataka accounted for 39% of GenAI startups, followed by Maharashtra at 14%, Delhi at 9%, and Telangana at 7%.
Further, the Survey noted that deep-tech companies saw a 78% rise in funding in calendar year 2024, reflecting growing investor interest in advanced technologies.
“Another key trend in the IT-ITeS sector is a shift towards higher-value products and capability-driven growth,” the survey said, pointing to the rapid expansion of Generative AI companies within India’s startup ecosystem.
The Economic Survey added that rising adoption of cloud computing, data-intensive technologies and artificial intelligence is reshaping demand across India’s technology sector, even as the country works to strengthen skills and infrastructure to support this growth.