India Augmented Reality Market Outlook to 2028

India Augmented Reality Market Overview

• In 2023, the Indian augmented reality (AR) market was valued at USD 789 Mn, driven by rapid advancements in AR technology and increased adoption across various sectors including retail, healthcare, and education. The market's growth is primarily fuelled by the rising demand for immersive user experiences and the expansion of AR applications in mobile devices and gaming.
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• Key players in the Indian AR market include Infosys, Tata Consultancy Services (TCS), Wipro, HCL Technologies, and Tech Mahindra. These companies are actively involved in developing AR solutions for diverse applications ranging from enterprise solutions to consumer apps.
• In 2022, Reliance Jio invested US$ 15 million in TWO, a Silicon Valley-based startup, focused on the AR/VR sector. Also, Krikey, an AR company, has launched Yatra, a new AR game in India in association with Reliance Jio.
• Major cities such as Bengaluru, Hyderabad, and Mumbai dominate the Indian AR market due to their status as technology hubs and innovation centers. Bengaluru, known as the Silicon Valley of India, leads in AR development due to its high concentration of tech startups and research institutions.

India Augmented Reality Market Segmentation

• By Technology Type: The Indian AR market is segmented by technology type into hardware and software. In 2023, the software segment held a dominant market share, driven by increasing demand for AR applications and platforms across various industries. The rapid advancements in software technologies, such as AR development kits and cloud-based AR solutions, are contributing to the growth of this segment.

• By Application: The AR market is further segmented by application into gaming, retail, healthcare, and education. The gaming segment held the largest market share in 2023 due to the growing popularity of AR-based games and applications. Companies like Niantic have driven significant growth in this segment with successful AR games like Pokmon GO.

• By Region: The AR market in India is segmented by region into North, South, East, and West India. In 2023, the South region, including cities like Bengaluru and Hyderabad, dominated the market due to its robust tech infrastructure and higher concentration of AR development activities. The regions vibrant startup ecosystem and tech-savvy population contribute to its leading position in the AR market.

India Augmented Reality Market Competitive Landscape

• Infosys acquired an AR Company: In 2024, Infosys announced the acquisition of a leading AR development company to expand its AR capabilities. The acquisition, valued at 280 crore, enhances Infosyss AR portfolio and strengthens its position in the market. This move is expected to drive innovation in AR solutions and increase Infosys's market share in the AR sector.
• BalaAatral Solution collaborating with Defence Ministry: In 2023, BalaAatral Solutions, a Chennai-based startup operating in the gaming industry, has received grants worth US$ 0.41 million (Rs. 3 crore) from the Ministry of Defence to work on two defence startup challenges.

India Augmented Reality Market Analysis

India Augmented Reality Market Growth Drivers

• Increased Adoption of AR in Healthcare: The integration of augmented reality (AR) technology into healthcare is proving to be a substantial driver for sector growth. AR supports critical functions such as surgical planning, diagnostic procedures, and patient care management, enabling a higher level of precision and patient engagement. Funding directed toward AR-based healthcare solutions has risen significantly, with particular attention to surgical assistance and immersive patient diagnostics. India has seen a rapid increase in startups focused on AR and VR technologies, now surpassing 2,000, which contributes to a robust innovation ecosystem fostering continued advancements in healthcare.
• Expansion of AR in Retail and E-Commerce: Augmented reality is reshaping the retail landscape, particularly within e-commerce, as it enhances customer engagement and improves conversion rates. By allowing customers to view products in a realistic, interactive format, AR helps bridge the gap between online and in-store shopping experiences. Studies show that AR-driven product pages experience conversion rates about 94% higher than non-AR pages. This immersive experience not only captures customer attention but also provides reassurance and confidence in purchasing decisions, leading to an increase in Add to Cart actions and overall sales.
• Increasing Funding for Startups: In the first half of 2024 alone, AR-focused startups in India secured over 1,000 crore in investment, underscoring the sector's growth potential and investor confidence. This surge in funding is catalyzing the development and deployment of new AR technologies across various industries, including education, retail, and healthcare. The influx of capital is not only supporting technology advancement but also accelerating the time to market for innovative AR applications. As a result, the AR industry in India is witnessing rapid growth, with startups continually pushing the boundaries of what AR can accomplish.

India Augmented Reality Market Challenges

• High Development Cost: The total cost for developing AR applications typically ranges from $10,000 to $200,000 depending on the complexity and features of the app. Simple applications can cost as low as $10,000, while complex applications may escalate to $250,000 or more.
• Privacy and Security Concerns: Privacy and security concerns related to AR data are significant challenges. The use of AR often involves collecting and processing sensitive personal data, raising concerns about data breaches and misuse. In 2024, the Indian government is implementing stricter data protection regulations as part of the Digital Personal Data Protection Bill, which aims to safeguard user data in AR applications.

India Augmented Reality Market Government Initiative

• Smart Cities Mission: The Indian government's Smart Cities Mission, with an allocated budget of 20,000 crore for 2024, includes the deployment of AR technology for urban management and public services. The initiative supports the integration of AR into city planning, traffic management, and public safety, enhancing the efficiency of urban infrastructure.
• National Artificial Intelligence Mission: In 2024, the Indian government launched the National Artificial Intelligence Mission, which includes support for AR technology development as part of its AI strategy. The National Artificial Intelligence Mission is a significant initiative by the Indian government, with a budget exceeding 10,300 crore, aimed at fostering AI development and addressing various societal needs.

India Augmented Reality Market Future Outlook

By 2028, the India AR Market will grow progressively, as the convergence of AR and AI technologies will be a prominent trend, enhancing the capabilities of AR applications. The integration of AI with AR will lead to more sophisticated and intuitive AR solutions, offering advanced features such as real-time data analysis and predictive insights.

India Augmented Reality Market Future Trends

• Growth in AR Applications Across Various Sectors: By 2028, the Indian AR market is expected to see significant growth in applications across sectors such as retail, healthcare, and education. Government initiatives and Smart Cities Mission will drive the integration of AR technologies into these sectors. Enhanced AR applications will provide innovative solutions and drive market expansion.
• Development of Cost-Effective AR Solutions: The development of cost-effective AR solutions is anticipated to become a major trend by 2028. Advances in technology and increased competition are expected to reduce the costs associated with AR hardware and software. This trend will make AR technology more accessible to a broader range of businesses and educational institutions, accelerating market growth.