India AI in Transportation Market Overview
As per MRFR analysis, the India AI in Transportation Market Size was estimated at 173.6 (USD Million) in 2023.The India AI in Transportation Market is expected to grow from 192.5(USD Million) in 2024 to 520 (USD Million) by 2035. The India AI in Transportation Market CAGR (growth rate) is expected to be around 9.455% during the forecast period (2025 - 2035)
Key India AI in Transportation Market Trends Highlighted
Government programs aiming at digital transformation and smart city projects are driving the notable growth of the India AI in Transportation Market. The National AI Strategy's launch places a strong emphasis on incorporating AI into a number of industries, including transportation.
In order to improve the effectiveness of logistics and public transportation systems, this drive encourages the development of autonomous vehicles, predictive maintenance, and route optimisation. India's fast urbanisation is another major factor driving the industry, raising demand for cutting-edge transit options that may reduce traffic and enhance security.
AI-driven solutions, such as intelligent public transport applications and traffic control systems, are emerging to efficiently address these issues as cities expand. Furthermore, India offers a significant chance for AI solutions to flourish due to the country's growing smartphone usage and adoption of digital payments.
Businesses can utilise AI to improve user experience, maximise ridesharing alternatives, and provide individualised transport services as more people rely on smartphone apps for transportation. Another trend that has gained popularity recently is the expansion of public-private sector partnerships, which has led to joint initiatives to develop and implement AI technology in transportation infrastructure.
In keeping with the government's emphasis on improving commuter security, AI-based monitoring technologies are also being incorporated to guarantee safety and lower crime in public transport. All things considered, the industry is expected to grow steadily, with new technologies and rising demand for more intelligent transportation options influencing its future in India.
Source: Primary Research, Secondary Research, MRFR Database and Analyst Review
India AI in Transportation Market Drivers
Government Initiatives and Policies
Government initiatives in India play a pivotal role in the growth of the India AI in Transportation Market. The Indian government has actively promoted the adoption of Artificial Intelligence technologies across various sectors, especially transportation.
The Smart Cities Mission initiated by the Ministry of Housing and Urban Affairs aims to develop 100 smart cities in India, which requires smart transportation systems powered by AI. For instance, the government's National AI Strategy envisions utilizing AI to enhance road safety and traffic management.
According to guidelines from the Ministry of Electronics and Information Technology, investment in AI for transportation can improve operational efficiency, which aligns with the ambitious goal to reduce road traffic fatalities by 50% by 2030.
The government's commitment to fostering innovation also encourages Research and Development activities by organizations like the Indian Institute of Technology, which consistently conduct research aimed at enhancing the transportation infrastructure using AI technologies.
This blend of government support and industry collaboration is projected to significantly boost the demand for AI in transportation in India.
Rise in Urbanization
Urbanization is rapidly accelerating in India, with urban populations expected to reach 600 million by 2031, up from approximately 430 million in 2021. This shift presents significant challenges in transportation systems, including increased traffic congestion and pollution.
The need for efficient transportation solutions has become paramount, leading to a demand for AI-driven systems that can streamline traffic management and improve public transport efficiency. With cities like Bengaluru and Mumbai already experiencing over 30% traffic congestion, municipalities are looking for innovative solutions to tackle these issues.
AI technologies, such as predictive analytics for traffic flow and automated public transport scheduling, are recognized as critical components for future urban mobility. The increasing pressure on transportation infrastructure, therefore, makes AI an indispensable asset in urban planning and management, thereby driving growth in the India AI in Transportation Market.
Growth in E-commerce and Logistic Services
The e-commerce sector in India is booming and projected to reach USD 200 billion by 2026, significantly boosting logistics and transportation requirements. Companies such as Flipkart and Amazon are heavily investing in AI to optimize their logistics networks, which includes route optimization and inventory management.
With an increasing volume of deliveries, reliance on AI technologies to enhance operational efficiencies, such as real-time tracking systems and automated delivery scheduling, is becoming essential. The logistics sector is currently one of the largest employment generators in India, reportedly employing approximately 22 million people.
As per the Ministry of Commerce and Industry, investments in AI solutions are set to transform the logistics landscape, making the India AI in Transportation Market a focal point for economic growth. This demand for AI in logistics and transportation will continue to rise, resulting in substantial market opportunities and advancements in the industry.
Technological Advancements in AI
Technological advancements in Artificial Intelligence are significantly driving the growth of the India AI in Transportation Market. With continuous improvements in machine learning algorithms, computer vision, and sensor technologies, AI applications are becoming increasingly sophisticated and efficient.
Indian startups, such as Ather Energy and Ola Electric, are leveraging these advancements to develop smart electric vehicles that utilize AI for enhanced navigation and safety features. The Ministry of Heavy Industries has announced policies to promote electric vehicles, which includes the integration of AI technologies for improved performance.
This growing trend towards advanced technology in transportation is facilitating a shift towards more sustainable and efficient modes of transport, which is crucial given India's commitment to reducing carbon emissions.
As these technologies become more mainstream, they are anticipated to foster exponential growth in the India AI in Transportation Market, creating new opportunities for innovation and investment in the sector.
India AI in Transportation Market Segment Insights
AI in Transportation Market Offering Insights
The India AI in Transportation Market, categorized under the Offering segment, presents a dynamic landscape, integrating advanced technological solutions into the transportation sector. The market growth is underpinned by the increasing need for efficient transportation solutions, driven by the rapid urbanization and population growth in India.
The transition towards smart transportation systems is prominent, emphasizing innovative hardware that is pivotal for enhancing vehicle automation and connectivity. Robotics and sensors, comprising essential components, facilitate real-time data processing and decision-making.
In addition to hardware, the role of services in the India AI in Transportation Market cannot be understated. With a growing focus on developing intelligent transportation applications, service providers are increasingly involved in delivering data analytics, predictive maintenance, and fleet management solutions.
These services are crucial in helping companies optimize route planning, reduce operational costs, and improve safety. They leverage machine learning algorithms to analyze traffic patterns and predict potential disruptions, which significantly enhance the overall efficiency of transportation systems.
Furthermore, software solutions play a significant role in this market segment. They encapsulate a wide range of applications, from navigation and mapping to advanced traffic management systems. Software development teams are increasingly focusing on integrating AI capabilities within transportation platforms to facilitate smoother user experiences and smarter traffic management.
Moreover, mobile applications that provide real-time updates on congested routes or public transport schedules are gaining traction among users, reflecting an increased demand for digital solutions in transportation.
As the India AI in Transportation Market evolves, growth drivers such as government initiatives aimed at promoting smart city projects and investments in infrastructure improvement become vital. However, challenges such as data privacy concerns and the high cost of technology implementation must be addressed to fully unlock the market's potential.
Overall, the Offering segment, encapsulating hardware, services, and software, represents a convergence of innovative technologies tailored to transform the transportation landscape across India, embracing a future that prioritizes efficiency, safety, and sustainability.
Source: Primary Research, Secondary Research, MRFR Database and Analyst Review
AI in Transportation Market IoT Communication Technology Insights
The IoT Communication Technology segment within the India AI in Transportation Market showcases a robust framework supporting diverse sub-segments such as Cellular, LPWAN, LoRaWAN, Z-Wave, Zigbee, NFC, and Bluetooth. Cellular technology is pivotal for delivering real-time data and connectivity across vast urban and rural ecosystems, significantly enhancing transport efficiency.
LPWAN stands out for its low power consumption over long distances, making it ideal for smart city applications and logistics tracking. LoRaWAN, with its focus on long-range wireless communication, plays a significant role in IoT devices, while Z-Wave and Zigbee contribute to home automation and smart infrastructure integration.
The flexibility and energy efficiency of NFC are crucial for cashless transactions and smart ticketing solutions in transportation. Bluetooth technology bridges user devices with transportation networks, ensuring seamless experience.
The India AI in Transportation Market revenue from this segment is critical in driving innovation, addressing urban congestion, and improving safety and efficiency through interconnected transport systems. With steady market growth, the emphasis on smart technology and infrastructure in India continues to propel this sector, presenting numerous opportunities for stakeholders.
AI in Transportation Market Application Insights
The Application segment of the India AI in Transportation Market encompasses a diverse range of technologies aimed at improving efficiency, safety, and operational capabilities in the transportation sector. Significant focus has been on Autonomous Trucks and Semi-autonomous Trucks, which are transforming logistics by enabling faster and safer freight deliveries across the nation.
Truck Platooning, which involves a group of trucks traveling closely together leveraging autonomous driving technology, is another area gaining attention due to its potential to enhance fuel efficiency and reduce road congestion. Technologies such as Human-Machine Interface (HMI) are critical for ensuring seamless interaction between drivers and AI systems, enhancing user experience and operational safety.
Predictive Maintenance plays a vital role in minimizing downtime and maintenance costs by leveraging AI to foresee potential vehicle failures, while Precision and Mapping technologies contribute to the accurate navigation and optimization of routes, proving particularly important in India's densely populated urban areas.
Additionally, Traffic Detection and Computer Vision-Powered Parking Management systems are helping to streamline urban traffic flow and parking solutions, addressing the growing concern of urban congestion.
Other significant applications, such as Road Condition Monitoring and Automatic Traffic Incident Detection, are crucial for improving road safety, especially in regions prone to adverse weather conditions.
Lastly, Driver Monitoring technologies focus on ensuring driver safety and alertness, particularly in long-haul transportation scenarios, thus highlighting the importance of AI in fostering safer roadways in India. Collectively, these applications signify pivotal trends that are reshaping the transportation landscape and driving substantial growth in the sector.
AI in Transportation Market Machine Learning Technology Insights
The Machine Learning Technology segment plays a pivotal role in the India AI in Transportation Market, significantly enhancing operational efficiencies and safety measures within the industry.
As the market evolves, technologies such as Deep Learning, Computer Vision, Natural Language Processing, and Context Awareness contribute to the sophisticated capabilities of transportation systems across India. Deep Learning, for instance, enables more accurate predictions and decision-making in logistics and traffic management, facilitating timely and efficient service.
Computer Vision is crucial for applications like automated vehicle guidance and real-time monitoring, improving safety and reducing accidents on the road. Natural Language Processing enhances driver and passenger interactions with smart transportation systems, making communication seamless and more efficient.
Meanwhile, Context Awareness empowers systems to adapt to varying environments and user needs, ensuring a smarter, user-friendly public transport experience.
The collective impact of these technologies not only drives innovation but also addresses challenges such as congestion and safety in urban centers, aligning with the increasing government focus on integrating AI solutions in infrastructure development for a more intelligent transportation ecosystem.
This focus on AI and machine learning not only enhances the India AI in Transportation Market revenue but significantly influences its future growth trajectory.
India AI in Transportation Market Key Players and Competitive Insights
The India AI in Transportation Market is experiencing rapid growth driven by advancements in artificial intelligence technologies and increased demand for enhanced operational efficiency in the transportation sector. As the country embraces digitalization, various stakeholders, including logistics providers, public transport authorities, and automotive manufacturers, are actively integrating AI solutions.
The competitive landscape is characterized by a mix of established automotive giants and emerging technology firms that are striving to harness AI capabilities to optimize routes, manage fleets, and improve safety measures.
Companies are investing in research and development to stay ahead in this dynamic market, focusing on innovations that can cater to evolving customer needs and regulatory requirements. Additionally, partnerships and collaborations within the industry are becoming more prevalent as firms seek to combine expertise and resources in AI to enhance their product offerings.
Moreover, the organization has focused on understanding the specific needs of the Indian market, allowing it to tailor its solutions effectively. This localized approach, combined with a reputation for reliability and quality, has solidified the company's position within the competitive landscape of the AI transportation sector in India.
Tech Mahindra, a prominent player in the India AI in Transportation Market, offers a range of cutting-edge solutions tailored to address the unique challenges of the transportation industry. The company's services encompass AI-driven data analytics, intelligent transportation systems, and smart mobility solutions, positioning it as a key enabler of innovation.
Tech Mahindra's strengths include its vast expertise in software development and its established presence in various transportation domains, allowing it to cater to a diverse clientele. The company has engaged in several strategic partnerships and collaborations that enhance its portfolio and market reach, facilitating the integration of AI technologies into existing transportation frameworks.
Notably, Tech Mahindra's commitment to research and development has positioned it favorably, enabling the company to stay ahead of competitors while continuously evolving its product offerings to meet the demands of the Indian transportation sector.
The combination of a solid market presence, innovative solutions, and strategic initiatives underscores Tech Mahindra's role in shaping the future of AI in transportation in India.
Key Companies in the India AI in Transportation Market Include
- Tech Mahindra
- Infosys
- Ola Electric
- LocoNav
- MapmyIndia
- Ather Energy
India AI in Transportation Market Developments
The 5G Automotive Association and the ITS India Forum collaborated in February 2025 to promote Vehicle-to-Everything (V2X) connection solutions, emphasising the use of AI to improve traffic safety, tolling, and congestion control.
With the launch of its TrackEi onboard train inspection system in April 2025, L&T Technology Services (LTTS) greatly increased rail safety by utilising high-resolution cameras, laser sensors, and NVIDIA Jetson edge computing to identify track flaws in real time at speeds exceeding 100 km/h. Reliance and Qualcomm-backed Netradyne, an AI fleet safety startup, enrolled over 450,000 cars worldwide in May 2025.
The firm uses AI-powered cameras and sensors to track driver behaviour and lower accident rates. With AI-enabled signals, ANPR, and real-time management capabilities, Nagpur Municipal Corporation started implementing its Integrated Intelligent Traffic Management System in August 2024; however, full enforcement is still pending certification.
Furthermore, the Indian Ministry of Road Transport and Highways said in October 2024 that expert committees will be implementing AI-driven solutions for automated penalty enforcement, satellite-based tolling, and traffic monitoring. When taken as a whole, these achievements show a strong push to incorporate AI into India's road, rail, and urban mobility systems.
India AI in Transportation Market Segmentation Insights
AI in Transportation Market Offering Outlook
- Hardware
- Services
- Software
AI in Transportation Market IoT Communication Technology Outlook
- Cellular
- LPWAN
- LoRaWAN
- Z-Wave
- Zigbee
- NFC
- Bluetooth
- Others
AI in Transportation Market Application Outlook
- Autonomous Truck
- Semi-autonomous Truck
- Truck Platooning
- Human-Machine Interface (HMI)
- Predictive Maintenance
- Precision & Mapping
- Traffic Detection
Computer Vision-Powered Parking Management
- Road Condition Monitoring
- Automatic Traffic Incident Detection
- Driver Monitoring
- Others
AI in Transportation Market Machine Learning Technology Outlook
- Deep Learning
- Computer Vision
- Natural Language Processing
- Context Awareness
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| Report Attribute/Metric Source: |
Details |
| MARKET SIZE 2023 |
173.6(USD Million) |
| MARKET SIZE 2024 |
192.5(USD Million) |
| MARKET SIZE 2035 |
520.0(USD Million) |
| COMPOUND ANNUAL GROWTH RATE (CAGR) |
9.455% (2025 - 2035) |
| REPORT COVERAGE |
Revenue Forecast, Competitive Landscape, Growth Factors, and Trends |
| BASE YEAR |
2024 |
| MARKET FORECAST PERIOD |
2025 - 2035 |
| HISTORICAL DATA |
2019 - 2024 |
| MARKET FORECAST UNITS |
USD Million |
| KEY COMPANIES PROFILED |
Mahindra & Mahindra, Tech Mahindra, Zebra AI, Nexus Mobility, Infosys, Ola Electric, LocoNav, DriveU, Rivigo, MapmyIndia, Curemetrix, Niramai, Ather Energy, Wipro, Tata Consultancy Services |
| SEGMENTS COVERED |
Offering, IoT Communication Technology, Application, Machine Learning Technology |
| KEY MARKET OPPORTUNITIES |
Autonomous vehicle development, Smart traffic management systems, Predictive maintenance solutions, AI-driven logistics optimization, Enhanced passenger safety technologies |
| KEY MARKET DYNAMICS |
Rising adoption of smart technologies, Government initiatives and funding, Increasing focus on safety, Growing demand for efficiency, Expansion of ride-sharing platforms |
| COUNTRIES COVERED |
India |
Frequently Asked Questions (FAQ) :
The expected market size of the India AI in Transportation Market by 2024 is valued at 192.5 million USD.
By 2035, the market value of the India AI in Transportation Market is projected to reach 520.0 million USD.
The anticipated CAGR for the India AI in Transportation Market from 2025 to 2035 is 9.455 percent.
The Services segment is expected to have the highest value at 185.0 million USD by 2035.
Some key players in the India AI in Transportation Market include Mahindra & Mahindra, Tech Mahindra, Ola Electric, and Tata Consultancy Services.
The projected market size for the Software segment in the India AI in Transportation Market by 2035 is 185.0 million USD.
Anticipated growth drivers for the market include the increasing integration of AI technologies in transportation systems and rising demand for intelligent transportation solutions.
The Hardware segment is valued at 57.5 million USD in the year 2024.
Challenges faced by the market include infrastructure limitations and regulatory hurdles surrounding AI technologies.
Current global scenarios could influence supply chain dynamics and innovation rates within the India AI in Transportation Market.
