India's artificial intelligence market is projected to touch $17 billion by 2027, growing at an annualised rate of 25-35 percent between 2024 and 2027, IT industry body Nasscom and consulting firm BCG said on Tuesday, citing a joint report studying AI-powered tech in the country.

The growth is seen on the back of an increase in enterprise tech spending, the country's expanding AI talent pool and a rise in AI investments, the two said in a statement ahead of the report's release on Wednesday.

India has over 420,000 employees who currently hold positions in AI job functions, said the report, adding that the country also has the highest skills penetration with respect to AI.

The report involved a survey of more than 65 respondents across larger-tech and mid-tech companies as well as companies in the business process management space and global capability centres.

The report comes as IT companies have earmarked significant budgets to train their employees, invest in startups and expand capabilities in the emerging technology. Last year, Wipro had announced $1 billion in investment in AI over three years.

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With investment in AI rising, the subsequent demand for AI talent in India is also expected to grow at an annualized rate of 15% until 2027, the report said.

Of the top 25 technology service providers, 90% have made large-scale Gen AI skilling commitments, it added.