Indian organisations are increasingly opting for small language models (SLMs) as they look for faster, more efficient, and targeted artificial intelligence (AI) solutions, according to Deloitte’s Tech Trends – India Perspective 2025 report.
These compact AI models are gaining popularity due to their ability to deliver personalised, responsive outputs while consuming less computational power—making them ideal for Indian enterprise environments.
The report notes that when SLMs are combined with task-specific AI agents and AI-driven simulations, they can create highly tailored solutions that improve user interaction and operational efficiency.
This fusion is part of a larger transformation where AI is becoming the core innovation enabler across industries in India.
“Across Indian organisations, AI is not just a trend but a powerful force weaving together technological advancements and driving India’s growth as a global leader in innovation. However, India must enhance its infrastructure, particularly high-performance computing and sustainable energy solutions, to accelerate growth while empowering its workforce through skill development and building ethical AI frameworks,”
— Abhrajit Ray, Partner and CIO Programme Leader, Deloitte India
Rather than being a standalone tool, AI is emerging as a foundational force that drives breakthroughs across sectors. In India, this shift is producing real-time, intuitive systems built on the convergence of:
Multimodal AI
Spatial computing
Advanced analytics
Together, these technologies are transforming how decisions are made and how systems interact with human users.
Deloitte’s report also highlights the re-emergence of hardware innovation—a response to the increasing demands of generative AI (GenAI).
Previously seen as a commoditised layer, hardware is now evolving to become a critical pillar of AI performance and scalability. Specialised chips are being developed for:
Power management
Telecommunications
Cryptographic acceleratio
Heterogeneous computing, which involves combining GPUs and NPUs (neural processing units) on a single chip, is becoming essential for efficient, high-performance AI workloads. This approach is enabling hardware to move from a support role to a driver of AI innovation.
In the defence sector, AI-driven mixed reality is enhancing operational readiness through immersive simulations. It also supports autonomous systems for quicker, more strategic decision-making.
In healthcare, AI is advancing diagnostic accuracy and improving surgical training through virtual environments that replicate real-world conditions for better preparedness and reduced risk.
AI is reshaping how businesses modernise their IT infrastructure. Deloitte’s findings show a move away from traditional monolithic systems to composable, decoupled architectures.
These agile systems are designed to:
Embed AI directly into daily workflows
Automate complex operations
Ensure regulatory compliance
Address evolving workforce needs
Improve resource optimisation and cost efficiency
However, implementing such systems requires deep architectural transformation to maintain scalability, security, and long-term viability.
In India’s booming information technology (IT) industry, AI is being widely adopted to assist in:
Code generation
Software testing
Automation of development workflows
This not only reduces manual effort but also boosts productivity, driving a shift away from traditional virtualisation models toward scalable, AI-enabled solutions.
Deloitte’s Tech Trends – India Perspective 2025 paints a compelling picture of how Indian enterprises are rapidly evolving by embracing small language models (SLMs) and AI-driven innovations. The shift toward compact, task-specific models highlights a growing preference for scalable, cost-effective, and high-performance AI solutions.
As AI becomes deeply embedded in core business functions—from software development to defence simulations and healthcare diagnostics—Indian organisations are not just keeping pace but actively leading transformation across sectors.
However, realising the full potential of this AI-driven future requires significant investments in infrastructure, skill development, and ethical frameworks.
With a strategic focus on hardware innovation, composable architectures, and multimodal capabilities, India is well-positioned to become a global innovation powerhouse.
As businesses modernise and talent adapts, AI will continue to reshape India's digital economy, driving agility, productivity, and inclusive growth. The coming years promise a dynamic interplay between technology, policy, and people in building India's AI-led future.