Rise of Cloud AI in India 2024 - Bessemer Venture Partners

As the generative AI era unfolds, India’s software market has new growth opportunities––including AI-enabled services and cybersecurity—where it is positioned to win on a global stage.

1. Rise of Cloud AIin India 2024
AparnaChaganty
Investor
DivyamSharma
Investor
VatsalyaTandon
Investor
KshiteejPrasad
Investor
Veer Gupta
Investor
Anant VidurPuri
Partner

2. INDIA SAAS MARKET SIZE
Source: Venture Intelligence, Industry Reports, BVP analysis
India’s SaaS market continues to inflect
122
5
8
1113
17
25
35
0
10
20
30
40
50
201620172018201920202021202220232025F2027F2030F
50
By 2030,
India’s SaaS market size is
forecasted to reach
$50B
in ARR
ARR, $B

3. Source: Private Circle, BVP analysis
India SaaS centaurs and unicorns are set to bring in $20 to
$25 billion in revenue by 2030
India-firstGlobal-first
ARR, $B
0.61.52.43.03.84.55.4
CY10CY19CY20CY21CY22CY23CY24FCY30F
0.0
0.40.60.91.11.41.7
5.0
CY10CY19CY20CY21CY22CY23CY24FCY30F
17.0
ARR, $B

4. 0.75
1.51.75
4.95
6.18
0.90.53
127
236
300
530
453
145
49
0
100
200
300
400
500
600
0
1
2
3
4
5
6
7
8
2018201920202021202220232024
Total Funding in
USD Billion
TOTAL INVESTMENT IN
INDIAN SAAS STARTUPS
Source: Tracxn, Venture Intelligence, Pitchbook, BVP analysis 1. As of June 30, 2024
Venture dollars in 2024 are trending to be
higher than 2023
Funding in USD B
Number of dealsNo of Deals

5. Reemergence of India SaaS unicorns
in 2024 led by AI startups
Unicorn year 2022
9#New unicorns
2018
2
2019
2
2020
6
2021
6
2023
0
2024
2

6. A RARE BREED
$100M ARR
with ARR defined as annual
recurring or subscription
revenue
Three new Centaurs
have emerged in 2024
Source: BVP Analysis – Centaur list may not be exhaustive as several companies do not publicly reveal Centaur status.
We continue to consider Centaur status a real
measure of enduring companies.

7. Source: BVP NASDAQ Emerging Cloud Index and Bessemer Research
In the AI era, Public Cloud returns to “historical norms”
3.9x
21.9x
12.9x
5.9x
0.9x
5.9x
10.9x
15.9x
20.9x
25.9x
Jan-14Apr-14Jul-14Oct-14Jan-15Apr-15Jul-15Oct-15Jan-16Apr-16Jul-16Oct-16Jan-17Apr-17Jul-17Oct-17Jan-18Apr-18Jul-18Oct-18Jan-19Apr-19Jul-19Oct-19Jan-20Apr-20Jul-20Oct-20Jan-21Apr-21Jul-21Oct-21Jan-22Apr-22Jul-22Oct-22Jan-23Apr-23Jul-23Oct-23Jan-24Apr-24
EV / NTM REVENUE OF AI GIANTS &
THE BVP EMERGING CLOUD INDEX
AMZNNVDAMSFTGOOGLAAPLCRMORCLBVP CLOUD INDEX

8. Even in tough macroeconomic conditions, growth gets a
premiumover profitability
GrowthRate+FCF Margin=Rule ofXxMultiplier
STAGE OF COMPANYMULTIPLIER
Early stage1x
Mid-stage2x
Late stage2-3x
Source “The Rule of X,” Bessemer Venture Partners, Feb. 2024.
0%
10%
20%
30%
40%
50%
60%
70%
12/31/1812/31/1912/31/2012/31/2103/31/2206/30/2209/30/2212/31/2203/31/2306/30/2309/30/2312/07/23
Rule of 40
Rule of X=2

9. >$100M~2~9~11~16
$50-100M1-2~12~16~22
$20-50M2-4~20~25~35
$10-20M8-10~30~3545-50
$5-10M15+50+60+~100
$1-5M15+100+150+250+
NO. OF
COMPANIES AT
DIFFERENT
REVENUE RANGES
India SaaS companies are becoming mature and
reaching scale
Source: Tracxn, Venture Intelligence, Pitchbook, Industry Reports, BVP analysis
2015202120222023

10. Our rapid growth is driven by a uniquely innovative, composite
product that establishes us as the modern leader in the PSA
category. Rocketlane's comprehensive capabilities not only
replace multiple tools but also significantly enhance process
rigor, automation, and actionable insights. This holistic approach
allows service delivery and finance teams to identify and prevent
revenue leakage, while empowering them with data-driven
decisions on staffing, pricing, and service management. Our
product's ability to deliver such critical benefits makes it a
favorite among finance departments and a game-changer in
tighter economic times.
Source: BVP Interviews“
Growing like a Rocket(lane)
ship!
Srikrinan Ganesam, Co-founder and CEO, Rocketlane

11. AI has been an undeniable catalyst for Indian SaaS. It's
accelerated our ability to move swiftly and decisively in the
market. Indian entrepreneurs are combining their product
strengths with complementary services, to deliver capital
efficient results. At Everstage, we are incredibly excited about
the potential of AI and are rolling out new modules with this
technology at its core.
Siva Rajamni, Co-FounderEverstageSource: BVP Interviews“
AI has been an undeniable
catalyst for India SaaS.

12. The cornerstone of our growth lies in the unwavering dedication of a
strong and driven team, committed to achieving realistic targets and
excelling across diverse geographies. Each member possesses a clear
vision of their goals and benefits from collaborative support to attain
them. Our strategic multi-geo approach allows us to find multiple
avenues for momentum, spanning regions like the US, EU, and the
Middle East. Enterprises have been undergoing significant
transformations from legacy platforms, and we are delving deeper
into financial services by adopting a vertical approach. This strategy,
coupled with our decision not to over-invest in sales capacity, ensures
sustainable growth. The expansion across multiple regions guarantees
that if one geography faces macroeconomic challenges, another can
compensate, maintaining our momentum. With steadfast belief, I am
optimistic about the enduring potential of India’s SaaS industry.
Raviteja Dodda, Co-Founder, MoEngageSource: BVP Interviews“
Our multi-geo approach
allows growth to eclipse
macro cycles.

13. Source: BVP Interviews
Baskar Subramanian,Srinivasan KA, Srividhya Srinivasan
Founders ofAmagi
At Amagi, our dream was to build a media technology company
from India for the world, where we bring path-breaking
innovation to drive large scale industry transformation in the
media and entertainment industry. Thanks to our customers,
employees and investors, we have been able to demonstrate
that vertical SaaS companies in India can dream big and
succeed through a relentless pursuit of execution excellence,
supported by an active startup ecosystem.“
Vertical software businesses
in India can dream big.

14. Rise of Cloud AI in India 2024— Five key trends
The line between software and
services is blurring with the
rise of AI-enabled services
India SaaS is transitioning
to IndAI SaaS1. 2.
4.
3.
5.
Industrial SaaS will start
scaling as Industry 4.0
matures and Industry 5.0
arrives
Cyber security is gaining
prominence in India’s
technology growth journey
A wealthier nation will
becatalyzed by software

15. 2024 Trend – 1
India SaaS is transitioning
to IndAI SaaS

16. Venture dollars in AIcontinue to rise
7864
125115
140
175
20
120
201820192020202120222023
$M
$M
Total Funding in
USD Million
TOTAL INVESTMENT IN
INDIAN AI STARTUPS
Left Axis: Funding in USD M

17. Source: BVP Survey
Bessemer survey ofIndian startups shows that53% of them
categorize themselves as AI-enabled SaaS
A whopping 92%have launches some form of an
AI feature in their product in the last 12 months.
53% companies identify as AI-enabled SaaS
and34% companies identify as Native SaaS.
91%
9%
Launched an AI
feature
Did not launch an
AI feature
32.35%
52.94%
14.70%
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
AI Native SaaSAI Enabled SaaSOthers

18. Leena AI case study: Broken workflows cost enterprises millions
Emma Wilson
Top Sales Rep
Core tools:
Salesforce, Email,
MS Teams
Sharepoint search is very limiting,
so Emma reads through 100s of
case studies in order to find the
relevant ones
Emma needs to create a quote and tries
to create one in Salesforce, but is not
able to do so, it says access denied
Emma emails the IT helpdesk to help
her get access to the Quote creation
module (Salesforce CPQ)
Emma gets access after 2 business days
and finally sends the email to Bruce
with the case study and pricing quote.
BAD EMPLOYEE
EXPERIENCE
‘I had a meeting with the CEO of
Wayne Enterprise, Bruce Wayne.
He mentioned that they face high
attrition in the manufacturing plants.
I need to send him an email with a
case study that highlights how we
have helped companies with similar
challenges and attach a rough
pricing quote’
Number of
manhours spent
by Emma
Number of
tickets raised
5 hrs
1
Total business
delay2 days
Private and confidential

19. Leena AI Knowledge Agent reads through all
enterprise knowledge and finds the right case
study in manufacturing domain in less than 5
seconds
Leena AI CRM Agent tries to create a price
quote on Emma’s behalf but sees that she
doesn’t have access to the CPQ module
Leena AI ITSM Agent asks her managers’
approval and moves Emma to the right
security group in Microsoft AD to grant her
access to the CPQ module
Leena AI creates an email on Emma’s behalf
attaching the case study & the price
quotation and post her approval sends it to
Bruce Wayne
GREAT EMPLOYEE
EXPERIENCE
Leena AI is the perfect solution
SINGLE
UI
Number of
manhours spent
by Emma
Number of
tickets raised
2 mins
0
Total business
delay5 mins
TASK 1
TASK 2
TASK 3
TASK 4
Private and confidential

20. ENTERPRISE
HORIZONTAL
ENTERPRISE
VERTICAL
INFRA
/FOUNDATION
AI Native AI EnabledAI-enabled SaaS opportunity will dwarf traditionalSaaS
PREDICTION 1

21. Monish Darda,Co-Founder & CTO, IcertisSource: BVP Interviews“
India's young English-speaking population and rapidly growing
economy are significant strengths. The advancements in Generative
AI in language understanding, creativity, and intelligence have the
potential to disrupt existing software models, offering India a
massive opportunity to provide global solutions. While the path to
Artificial General Intelligence (AGI) is challenging and regulated, it
remains one of the largest opportunities the world has ever seen.
India's young English-
speaking population and
rapidly growing economy
are significant strengths.

22. Arundhati Bhattacharya
Chairperson & CEO, Salesforce IndiaSource: BVP Interviews“
A recent report byNASSCOMpredicts that the Indian AI market will reach $17 billion by
2027, highlighting its immense potential. Our country is well-positioned for sustained
economic growth, with digital transformation serving as a key driver. Moreover, India's focus
on AI's rapidly evolving innovation cycle further strengthens its growth potential. With a
large talent pool, supportive government policies, strong academic institutions, and world-
class research and innovation facilities, India possesses some of the richest data sets for AI
innovation. E-governance platforms in India are poised to become more intelligent and
customized to local communities through AI.
This represents a golden moment for India, with Salesforce as its digital partner committed
to building a future where AI empowers individuals and fosters a truly inclusive digital
economy. With one of the largest developer ecosystems outside the US, we are dedicated to
nurturing and leveraging talent in India. Through our free online learning platform,Trailhead,
we are cultivating a diverse pool of tech talent (Trailblazers) and equipping them with the
skills and ethical framework to use AI responsibly.
We’re committed to embracing AI as a force for good, driving innovation, and fostering
inclusive growth. At the forefront of the AI revolution, we are also brilliantly positioned to
deepen India’s reputation as a global tech leader. We’ve been investing in safe, responsible
AI for over a decade — with Trust at the center of everything we do. Together, we can
harness the transformative power of technology to build a brighter, more prosperous future
for all.”
We’re committed to
embracing AI as a force for
good, driving innovation, and
fostering inclusive growth.

23. 2024 TREND – 2
The line between software
and services is blurring
with the rise of
AI-enabled services

24. 10%
12%
14%
16%
18%
20%
22%
24%
26%
28%
30%
-
50
100
150
200
250
300
350
400
450
500
202020242030
Global MarketIndia ContributionIndia Share
Source: BVP Desk, NASSCOM,Statista, Grand View Research
India leads global services, holding 19% of the $400 billion
global services market
SERVICES MARKET SIZE; INDIA'S SHARE OF REVENUE
Market Size ($B)India's Share of Revenue
332
389474
5174132
15%
19%
28%

25. Sources: BVP Desk, NASSCOM, Bain, PwC, Grand View Research, Smart Sheet, TaskUs
India: The hub of professional services with 56% global
worker hours
TASKS BREAKDOWN FOR DIFFERENT INDUSTRIES
% of total in industry
0
10
20
30
40
50
60
70
80
90
100
Finance ServicesHealthcareInsuranceCommerceSoftwareTMT
Back-Office TransactionsCustomer Interaction ServicesKnowledge Processes
25
REVENUEBREAKDOWN(%)
20%FinancialServices
15%Healthcare
12%Insurance/Legal
8%Commerce
8%Software
8%TMT
4045404040
40
30
40
404535
25
152015
3035

26. Source:BVP Desk; Regulations Handbooks; Gartner;KPMG
AI will augment human expertise where trust is fundamental
AI will enhance service efficiency, but human involvement will remain essential in high-stakes industries.
More regulations demand human
oversight, evidenced by the EU's AI Act
Hallucinations
remain a challenge
VERTICALADDITIONALREGULATIONS
Insurance
Legal
Finance
Healthcare
EU AI Act
ABA MRPC 5.3 ; GDPR; EU AI Act;
FRCP 23 (a)
FINRA3110, SECSCI ; Basel III
Pillar2; EU AI Act; DoddFrank Act
FDA(21 CFR Pt. 11); HIPAA;
EU AI Act; EMA 2001/20/EC

27. The rise of new ageservice firms: Efficient, accurate, human
Source: Public Company Reports; BVP Desk
1.
Software-equivalent
gross margins, vs. 40%
intraditional services
2.
Outcome-based pricing
replacing labor-based
pricing
3.
Ensured AI accuracy via
human oversight
4.
Efficient innovation
with AIfreeing human
creativity

28. Human Writer (Creator)Human Editor (Quality Control)+ =30%
Gross Margin
Business
Human Writer (Creator)AI Editor (Quality Control)+ =50%
Gross Margin
Business
In 2 years, AI has transformed the
content business
AI Writer (Creator)+Human Editor (Quality Control)=75%
Gross Margin
Business

29. Increased organic orders and traffic: A healthcare pharmacy giant
doubled their revenue in less than six months
0
5000
10000
15000
20000
25000
30000
Oct '23Nov '23Dec '23Jan '24Feb '24Mar '24Apr '24May '24Jun '24Jul '24
App Organic OrdersWeb Orders
0
100000
200000
300000
400000
500000
600000
Oct '23Nov '23Dec '23Jan '24Feb '24Mar '24Apr '24May '24Jun '24Jul '24
Organic Traffic
SCALED GROSS MARGIN FROM 30% TO 75% FOR 20,000+ ASSETS THROUGH HUMAN + AI APPROACH

30. CUSTOMER INTERACTIONS
KPO
BACKOFFICE
AI will grow India’s strength in the services market
SERVICESSOFTWARE
PREDICTION 2

31. 2024 Trend – 3
Cybersecurity is gaining
prominence in India's
technology growth journey

32. Source: Data Security Council of India, Cert-IN, News clippings
Cybersecurity attacks in India are growing rapidly
0.2
0.4
1.21.41.4
20182019202020212022
CYBERSECURITY INCIDENTS
IN INDIA (MILLION)

33. 2.4
3.4
4.7
6.1
2020202120222023
India cybersecurity market
($ Billion)
DOMESTIC CONSUMPTION OF
CYBERSECURITY SERVICES AND
SOFTWARE BREACHED $6B
MARK IN 2023
Source: Data Security Council of India
India’s domestic cybersecurity market is growing rapidly

34. 1.2.3.4.
Four key tailwinds that help create unique opportunities
for servicing the Indian market
Source: BVP Desk Research, PWC India 2024 Digital Trust Insights
Rising talent pool
in India
Both global cybersecurity
giants and Indian service and
system integrator (SI)
companies have expanded
the cybersecurity talent
landscape in India, making it
the 2nd largest hub for
cybersecurity professionals
globally
Increasing
cybersecurity
budgets
99% of organizations in India
are expected to increase their
cyber budgets, 50% of which
envisage an increase between
6% and 15% in the next 12
months
AI adoption
Increasing adoption of AI
acts as a double-edged
sword––while it enables
cyber companies to better
detect threats, it also opens
a new range of attack
vectors
Regulatory
environment in India
With the Digital Personal Data
Protection (DPDP) Act, fines
for data breaches have
expanded manifold, requiring
many Indian enterprises to
deploy a full-stack
cybersecurity suite

35. Source: Teamlease, LinkedIn Talent Insights, CBRE
1. India is one of the major global talent hubs
and continues to grow
100K
210K
300K
202120222023
38%
10%6%4%3%
39%
USAIndiaUKFranceCanadaRoW
NUMBER OF CYBERSECURITY
PROFESSIONALS IN INDIA HAS
3X’D IN THE PAST 3 YEARS
WITH BOTH PRODUCT AND SERVICES
COMPANIES BUILDING A MASSIVE
TALENT BASE
INDIA IS BECOMING THE SECOND-
LARGEST CYBER TALENT POOL IN
THE WORLD

36. Source: BVP Desk Research, MEITY, PWC Digital Survey 2024 - India
Macro budgets continue to grow leading to further resiliency of the cyber category
compared to other categories
INR 1,100 Cr
Budget allocated from central government for
cybersecurity in FY25, moving up from INR 400 Cr in
FY23
99%
Of the Indian enterprises stated an increase in their
cyber budgets in FY24
50%
Of the Indian enterprises stated an increase between
6% to 15% in the next 12 months
30
400
1100
FY23FY24FY25
CENTRAL GOVERNMENT’S
BUDGET ON CYBERSECURITY,
INR CR
As digital adoption
accelerates,
cybersecurity has
become a top priority for
organizations in India,
leading to substantial
increases in
cybersecurity budgets.
This investment in
advanced security
measures and threat
detection systems is
crucial to protecting
sensitive data, ensuring
the resilience of our
digital infrastructure and
enhancing trust in the
cyberspace
Vinayak Godse, CEO, Data
Security Council of India
“
2. Cyber budgets keep on rising

37. Source: Various Indian news outlets
3. AIhas also opened up new attack vectors

38. Source: DPDP Act, Data Security Council of India
4. The regulatory landscape has tightened up with DPDP
INR 250 Cr
Failure in implementing security safeguards
for preventing data breach
INR 200 Cr
Failure to notify the board and affected
principals of data breach
INR 200 Cr
Non-compliance with obligations around
children’s data
INR 200 Cr
Breach of additional obligations by significant
data fiduciary
INR 50 Cr
Any other noncompliance penalty
POTENTIAL PENALTIES

39. Source: Various Indian news outlets
Cyber insurance: A key part of building cyber resilience

40. Data breaches in India potentially generate more than
$100 billion in losses each year
Source: IBM Security, Cert-In
~$2 Mn
AVERAGE TOTAL COST
OF A DATA BREACH
INCIDENT IN INDIA
x50 - 100K
NUMBER OF SECURITY
INCIDENTS THAT COULD HAVE
POTENTIALLY RESULTED IN A
BREACH
=$100-200 Bn
POTENTIAL LOSS DUE TO DATA
BREACHES IN INDIA, ANNUALLY
From IBM Security’s cost of data
breach report, 2023
Conservatively estimated number of
incidents that can result in a data breach
(via CERT-In)

41. Yet cyber insurance penetration is still < 1%
…with a long way to go
Source: Deloitte Cyber Insurance Report, PwC Cyber Readiness Report, BVP Desk Research
< 1 % 1
Cyber insurance penetration
$800 million 1
Cyber insurance current market size across
enterprise & retail in 2030
50% +
Expected growth (CAGR) in the next 3-5 years
1. Across retail and enterprise

42. Sumit Nigam,CTO,Perfios Source: BVP Interviews
At Perfios, cybersecurity is integral to our vision of transforming
financial data management. By implementing state-of-the-art
security measures, we ensure the integrity and confidentiality of
our clients' data. This unwavering commitment to cybersecurity not
only protects our clients but also fuels our growth by building trust
and enabling us to offer innovative and secure solutions in the
financial technology space.“
Cybersecurityis astrong
pillarofdata management.
Source: BVP Interviews

43. Hilal Lone, CISO RazorpaySource: BVP Interviews
AtRazorpay, cybersecurity is fundamental to our mission of
enabling seamless and secure digital payments. When dealing
$150B+ worth transactions a year, we need to invest in advanced
security technologies and practices. With this we are not only
safeguarding our platform and our clients' transactions but also
driving trust and growth in the fintech ecosystem. Our commitment
to cybersecurity is key to empowering businesses to innovate and
thrive in a secure digital economy.“
Cybersecurity is
fundamental to our mission
of enabling seamless and
secure digital payments.

44. Indian cybersecurity companieswill emerge to serve
domestic and global markets
NETWORK SECURITY
DATA PRIVACY AND PROTECTION
IDENTITY AND GOVERNANCEVULNERABILITY MANAGEMENT
AND ASSESSMENT
CLOUD SECURITY
COMPLIANCE AND GRC
APPLICATION SECURITY
PREDICTION 3
TECH INFRA AND ECOSYSTEM ENABLERS
SEC OPS
SECURITY SERVICES
AI SECURITY
TECH INFRA AND ECOSYSTEM ENABLERS
NEW AGE BROKERS

45. 2024 Trend – 4
A wealthier nation will be
catalyzed by software

46. Source: AMFI, BVP Desk Research
India’s wealth story is at an inflection point
19202122232528313541
55
90
114
2011201220132014201520162017201820192020202120222023
Number of Demat Accounts (Million)
941041081161301651831842142322372022143739335669
80
144150163186
276318
405
2011201220132014201520162017201820192020202120222023
Assets Under Management (AUM)
of Mutual Funds ($ Billion)
Debt
Equity
MUTUAL FUND AUM HAS ~5X’D FROM 2011DEMAT ACCOUNTS HAVE ~6X’D FROM 2011

47. Source: McKinsey, 360One WAM, Jefferies, BVP Desk Research
As the number of affluent households grows, savings invested
in non-traditional assets are also expected to rise
Property, 51%
Gold, 15%
Bank Deposits,
14%
Insurance Funds,
6%
Provident and
Pension Funds, 6%
Equities, 5%Cash, 3%
Split of $11 Trillion of total household
assets in India, 2023
HNI+ HOUSEHOLDS AND ASSETS ARE
THE FASTEST GROWING SEGMENT
AND YET <5% OF THE
WEALTH IS IN EQUITIES
UHNI
>$5Mn
HNI
$1-5Mn
Affluent
$100K-1Mn
Emerging Affluent
$50K-100K
Mass market
<$50K
20222027ECAGR
Total HH
financial
assets ($Bn)
# of
househol
ds ('000)
Total HH
financial
assets ($Bn)
CAGR
(22-
27E) %
810-82030-351,540-1,56013-14%
205-210160-170380-39013-14%
390-4002.5K-2.6K710-72012-13%
310-32031K-32K610-63011-13%
890-910207K-
210K
1,300-1,4008-10%

48. TRADITIONAL
NEW AGE
MANUFACTURERSDISTRIBUTORSTECH ENABLERS
Cloud software will power the next unlock in the Indian
wealth landscape
PREDICTION 4

49. Industrial SaaS will start scaling
as Industry 4.0 matures and
Industry 5.0 arrives
2024 Trend – 5

50. Source: From Industry 1.0 to Industry 5.0. | Download Scientific Diagram (researchgate.net)
From industry 1.0 to 5.0: Where we stand, and where we’re going - Article - Future Electronics Blog
Industrial technology has been evolving at an exponential clip
We are currently in the Industry 4.0 maturity stage, and Industry 5.0 is already planting seeds in manufacturing facilities.
INDUSTRY 1.0
1st Mechanical Loom
Steam and coal powered
machines boost manufacturing
processes.
1784187019692011Future
INDUSTRY 2.0
1st Assembly Line
Introduction of the electric power
grid and mass production
techniques.
INDUSTRY 3.0
1st Programmable Logic
Controller
Introduction of computers
enables automated production.
INDUSTRY 4.0
Cyber-Physical Systems
Boundaries between physical and
digital systems get blurred with
technologies like IoT, big data, and
cloud computing.
INDUSTRY 5.0
Human-Machine
Collaboration & Bioeconomy
Quantum computing and generative
AI will enable humans to tackle
more complex tasks. Focus on
sustainable operations will increase.

51. Make In India tailwinds will spur technology adoption in
the Indian manufacturing sector
MII GOVERNMENT SCHEMES TO
PROMOTE MANUFACTURING
$25Bn PLI, $10Bn DLI Initiatives;
11 sectors opened up with 100% FDI
Sponsor sectors like automobiles and semiconductors
which are adopting technology at a rapid pace.
National Investment and Manufacturing Zones
(NIMZs) and Free Trade Agreements (FTAs)
14 NIMZs – ‘in principle’ approval – 4 NIMZs – final
approval to attract enterprise manufacturers to set up
facilities in India. Launch of FTAs has also opened
global markets to India.
IMPLICATIONS ON ADOPTION
OF INDUSTRIAL SAAS
Increased adoption of simulation software
and production monitoring
Manufacturers based in the US and Europe
are digitally more mature than native Indian
manufacturers and will bring in a higher
adoption rate of Industry 4.0 technologies.
Technology Acquisition and Development Fund
Launched for acquisition of tech, creation of patent
pool, and development of domestic equipment
manufacturing.
Increased adoption among SME manufacturers

52. Sustainable operations will be a key focus area and ESG
software will become a “must-have” vs a “good-to-have”
Source: BVP Research
ESGreporting regulations, especially in the EU and US, have created
massive opportunities for Indian founders building for the world
ESG software verticalized for manufacturing will map suppliers
and provide risk screening to brands for other regulations like
sustainable sourcing laws and labor laws as well
60,000+ businesses regulated topublish ESG
reports from 2024.This number will rise
to90,000+ businesses in the next 3-4 yearsEUROPE
US SEC has regulated voluntaryESG
reporting.Companies expectESG reporting to
be mandated in nexttwo years.US
SEBI has regulated Top 1000 listed companies
to issueESG reportsINDIA
TEXTILE
FMCG
OIL & GAS

53. Penetration of AI use cases will increase across quality, safety,
and production efficiency in manufacturing
Self-learning AI models have
significantly increased the accuracy of
vision-based quality inspection
systems.
In industrial health and safety, AI has
found use cases in workflow automation,
safety data management, regulatory
compliance, and proactive risk
management.
Across both process and discrete
manufacturing, AI is enabling improvement in
production efficiency.
Legacy incumbents in the industrial vision
inspection space are actively adding AI
features to their existing offerings
Automobile, CPG, and semiconductor
industries have actively adopted AI based
vision inspection solutions, and other
industries will follow suit
Source: BVP Research
Traditional safety software, currently used
mainly for auditing purposes and adding on
AI based safety features as well
Construction, oil and gas, and mining industries
have widely implemented AI based safety features
like proactive risk management and lone worker
monitoring
Godrej and JSW Steel are a couple of several Indian
enterprise manufacturers that are now using a
digital twin to identify losses in their production
processes
OEMs like Siemens and Rockwell are
focusing on increased sensorization of their
equipment to enable creation of ‘digital
twins’.

54. Industrial software will transition from on-premise
to cloud deployments
v
PREDICTIVE MAINTENANCEINDUSTRIAL VISION INSPECTIONPROCESS MONITORING
ESG SOFTWARE
SIMULATION SOFTWARE
EHS & G SOFTWARE
PREDICTION 5

55. Rise of Cloud AI in India 2024 — Five key predictions
AI will grow India’s strength in
the services marketIndAI SaaS opportunity will
dwarf traditional SaaS1. 2.
4.
3.
5.
Industrial software will
transition from on-premise
to cloud deployments
Indian cybersecurity
companies will emerge to
serve domestic and
global markets
Cloud software will power
the next unlock in the
Indian wealth landscape