As the Gulf pours USD bns into AI, Indian startups are becoming its go-to build partners - MENA India Corridor

The UAE and Saudi Arabia have invested billions of US dollars in AI infrastructure, sovereign AI programmes and digital transformation over the past two years, creating a surge in enterprise demand that Indian AI startups are increasingly filling. India now counts more than 3,100 AI startups and ranks third globally in AI capability, up from seventh a year earlier, and a rising number of mid-stage Indian companies are landing customers across Gulf sectors including banking, healthcare, retail and energy.

"The US continues to be one of the largest markets for Indian startups. What we are seeing is that the Gulf, particularly the UAE, has emerged as a strategic growth market over the last few years," Shivendra Singh, vice president and head of global trade development at Nasscom, says, underscoring why many founders view the Gulf as a natural first international market.

Strong enterprise demand, regulatory sandboxes and sovereign funding in the Gulf are combining with India's growing AI talent pool to create a pragmatic corridor for commercial expansion. "Governments in markets such as the UAE and Saudi Arabia are also major buyers and early adopters of AI," Vijay Gopalakrishnan, partner at Deloitte India, adds, pointing to top-down mandates that complement bottom-up enterprise interest.

Why Indian startups are winning Gulf work

Founders cite two main advantages: access to high-quality, systematic data and a regional willingness to adopt new technology. "The first reason why Indian AI startups are eyeing Gulf expansion is the availability of high-quality, systematic data," says Shravan Bhati, co-founder and CEO of SatLeo Labs. "The second reason is the region's willingness to adopt new technologies." That mix enables quicker model development and faster deployments than many mature markets.

Healthcare is a prominent example. Dhruv Bhatia, head of international business at healthcare AI startup 4baseCare, says Gulf governments have made AI a national priority and that healthcare providers have continued investing in AI to improve clinical outcomes despite geopolitical uncertainty. "For 4baseCare, the decision (to expand to the Gulf) was driven by a clear healthcare need rather than market expansion alone. We saw [a window] to combine our genomics expertise, AI-driven clinical decision support, and laboratory capabilities to address that gap," Bhatia explains.

Enterprise adoption is already visible: Indian-origin vendors such as Fractal, Yellow.ai, Uniphore, Kore.ai, Gnani.ai, Observe.AI, Whatfix and MathCo have established customers or operations across the GCC. Abu Dhabi’s Hub71 is also cited as a preferred landing pad for Indian AI firms seeking a regional base.

Challenges and the road ahead

Despite enthusiasm, experts warn of hurdles. "Clients in the region are also highly demanding, and Indian AI startups must be prepared to manage these expectations," Gopalakrishnan cautions, noting price sensitivity, Arabic-language requirements and geopolitical security concerns as key challenges.

For some companies, inbound demand has driven expansion. "The combination of bottom-up enterprise demand and top-down government mandate is what’s pulling Indian AI companies into the region right now," says Ahshad Jussawala, CEO of Reliance-affiliated AI company Jio Haptik, noting that UAE and Saudi clients often seek solutions proven at India’s consumer scale.

• Indian startups benefit from engineering depth and speed of execution, alongside cost advantages.
• Sectors seeing strong traction include financial services, retail, energy and healthcare.
• Experts expect the India–GCC AI corridor to expand further over the next three to five years.

With sovereign funding and enterprise procurement aligned, the Gulf is emerging as a major commercial market for Indian AI firms that can meet local language, regulatory and security requirements while co-innovating at scale.