Linux Foundation Open Source AI Report: Key Driver for India's AI Market Growth – 76% Startups Use Open Source

Unlocking India's AI Potential Through Open Source Innovation

The Linux Foundation's latest research publication, titled AI for Economic and Social Good in India: Scaling Inclusive Growth for Entrepreneurs, Creators, and Local Economies, released on February 17, 2026, at the India AI Impact Summit in New Delhi, underscores open source artificial intelligence (AI) as the pivotal force propelling India's AI market forward. In partnership with Meta, this report draws from extensive literature reviews and qualitative interviews to highlight how open source AI lowers barriers to entry, fosters customization, and drives rapid innovation tailored to India's unique socio-economic context. 88 39

India's AI landscape is transforming at an unprecedented pace, with open source tools enabling startups, researchers, and enterprises to build solutions that address local challenges such as multilingual communication, agricultural productivity, and judicial efficiency. This report arrives at a critical juncture, as India's government pushes digital public infrastructure (DPI) mandates requiring open source for key systems, amplifying the ecosystem's momentum.

Key Findings: 76% of Indian Startups Champion Open Source AI

A standout statistic from the report reveals that 76% of Indian startups are harnessing open source AI technologies. This high adoption rate stems from the cost-effectiveness and flexibility of open source models, allowing resource-constrained innovators to customize AI for India's diverse languages, cultures, and low-connectivity environments. 88 With over 200,000 startups in the country—ranking fourth globally for newly funded AI companies in 2024—this trend positions India as a global leader in grassroots AI development.

The methodology involved synthesizing global literature on open source AI impacts and conducting targeted interviews with Indian stakeholders, providing a robust, evidence-based view. Hilary Carter, senior vice president of research and communications at the Linux Foundation, noted, "India is leveraging open source to define its own unique trajectory in the AI revolution." 88

India's AI Market: From $6 Billion to $32 Billion by 2031

India's AI market has surged from $3.2 billion in 2020 to $6 billion in 2024, with projections reaching nearly $32 billion by 2031. This five-fold growth is fueled by a burgeoning startup ecosystem, surging global demand for Indian AI talent, and proactive government investments in DPI like India Stack. 88 The $200 billion-plus IT services sector further anchors this expansion, linking India to the global digital economy.

Open source AI accelerates this trajectory by enabling faster prototyping and deployment. For instance, government policies mandating open source for critical infrastructure ensure scalability and interoperability, creating a fertile ground for economic multipliers.

• Market size 2024: $6 billion
• Projected 2031: ~$32 billion
• CAGR drivers: Startups (200k+), talent hiring (highest YoY globally), DPI investments

Explore career paths in this booming sector via higher education jobs on AcademicJobs.com.

Startup Success Stories Powered by Open Source AI

The report spotlights real-world applications demonstrating open source AI's transformative power. Adalat AI uses open source models for real-time courtroom transcription in multiple Indian languages, tackling a backlog of over 50 million cases. Farmers for Forests employs satellite imagery and AI to monitor agroforestry, boosting smallholder farmers' incomes by up to 3-5 times through carbon credits and yield optimization. 88

Caze Labs' MeTProAI provides clinical decision support with privacy-preserving federated learning, while Bhashini and Sarvam AI develop multilingual models covering 20+ official languages. Sarvam AI, founded by IIT alumni, exemplifies how open source bridges linguistic divides, with models like Sarvam 2B supporting Hindi, Tamil, and Bengali. 140 These cases illustrate step-by-step processes: data collection in local contexts, fine-tuning open models like Llama or Mistral, deployment on edge devices for low-bandwidth areas, and iterative community feedback.

Read the full Linux Foundation press release for more examples. 88

Photo by Dharaneeswaran R on Unsplash

Talent Pipeline: India's Edge in Global AI Workforce

India boasts the highest year-over-year AI hiring rate worldwide, supported by its young, digitally fluent population. The report emphasizes upskilling initiatives like Skill India Digital Hub, which offers AI training in regional languages. However, AI could disrupt 45-69% of jobs in manufacturing, retail, and customer service by 2030, necessitating proactive reskilling. 88

Arpit Joshipura, head of LF India, stated, "With a supportive government... India is the ultimate sandbox for innovation." 88 Universities play a crucial role here, producing AI-ready graduates through programs integrating open source tools.

Higher Education's Role in Open Source AI Advancement

Indian universities and colleges are pivotal in translating open source AI research into practical impact. Institutions like IIT Madras have established centers for open source AI in Indian languages, collaborating on projects like Bhashini. The report recommends funding for secure, responsible AI research and open access publications tailored to regional needs. 88

In higher education, open source AI enhances teaching through tools like Hugging Face models for natural language processing in curricula. Budget 2026 allocations for AI classrooms and smart labs further bolster this, aiming for 2.7 million new AI jobs by 2028 per NASSCOM. 83 Professors and researchers can leverage platforms like Rate My Professor for peer insights while pursuing research jobs.

• Integrate open source in AI/ML courses for hands-on learning
• Partner with startups like Sarvam AI for internships
• Develop multilingual datasets for culturally relevant models

Check AI initiatives in Indian higher ed for more.

Government Policies and Digital Public Infrastructure

India's DPI— including Aadhaar, UPI, and now Bhashini—mandates open source, ensuring inclusive growth. Initiatives like IndiaAI Mission (Rs. 10,372 crore) fund compute and datasets, aligning with LF recommendations for multilingual infrastructure. 88

The Union Budget 2026 emphasizes skilling, with university townships and girls' hostels to expand access. Visit AcademicJobs India for education sector opportunities.

Challenges: Balancing Innovation with Job Transitions

While opportunities abound, the report warns of workforce shifts. Automation may affect millions, but open source democratizes reskilling tools like free Coursera models on GitHub. Universities must offer bridge programs in AI ethics, prompt engineering, and model fine-tuning.

Photo by A Chosen Soul on Unsplash

• Risks: Job displacement in routine sectors
• Solutions: Upskilling via open platforms, public-private partnerships
• Stakeholder views: Balanced optimism from Meta's Rob Sherman

Recommendations for Stakeholders and Future Roadmap

The Linux Foundation urges a national open source AI vision: invest in research, multilateral frameworks, and low-resource infrastructure. Higher ed leaders should prioritize applied AI training. For detailed analysis, see the LF Research page. 87

Actionable insights for academics: Contribute to repos like Sarvam AI, fine-tune models step-by-step (preprocess data, train on GPUs via Colab, evaluate with Indic benchmarks).

Outlook: India as Global Open Source AI Leader

By 2031, India's AI economy could unlock trillions in value, with open source at its core. Universities fostering open source talent will drive this. Aspiring professionals, gear up with higher ed career advice and apply to university jobs.

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