A few years ago, at the onset of India’s e-commerce boom, few expected consumers beyond metros to drive its growth. Yet recent reports show that Tier-2 and Tier-3 cities now contribute over 60% of India’s e-commerce transactions. And the surge isn’t limited to shopping—short-form video and digital payments are also seeing their fastest adoption in Bharat. Together, these trends reflect a clear shift: Bharat is not just online, it’s driving the internet economy’s next phase of growth.
As this momentum builds, the question for AI is no longer if Bharat will embrace it, but how quickly. For startups, this represents both an opportunity and a test: to build AI products that can earn trust, bridge the affordability gap and deliver real value to users. The next breakout companies will be those that design for Bharat from day one, not as an afterthought.
Unmet needs in a value-conscious market
Bharat represents one of the world’s largest yet underserved consumer markets. Access to essential services such as quality education, reliable healthcare, or sound financial advice still remains unavailable or inaccessible. Even when available, they are often expensive or delivered by unreliable service providers with varying levels of quality.
The challenges faced by Bharat’s consumers differ significantly from those in Tier-1 cities. While smartphone penetration is deep and data is affordable, disposable incomes are lower, making affordability a key barrier. More importantly, these users are also value-conscious: willing to pay, but only after demonstrable benefits. Language further complicates the experience. For millions of Indians, English-first or even Hindi-first interfaces feel unfamiliar or intimidating.
These realities demand solutions that combine utility, affordability and cultural relevance from the outset.
How AI can close the trust gap
AI’s potential in Bharat lies in its ability to understand context and deliver expert-grade, personalised, real-time assistance at scale, something earlier waves of technology could not achieve with accuracy. In a country where 88% of districts lack specialist doctors and where teacher availability varies drastically across states, AI can handle a large share of routine queries, triage health concerns, support schoolwork and guide financial decisions without depending on scarce expert human resources.
Yet, like any new technology, AI must first overcome a trust gap. And the best way to build trust is through accurate, personalised advice tailored for each individual.
This is where linguistic intelligence becomes crucial. LLMs can understand dialects, local expressions and everyday phrasing, making interactions feel familiar and personal. With Indians sending more than seven billion WhatsApp voice messages every day, speech is already the most natural mode of digital communication. Modern multimodal AI now builds on this by interpreting regional accents and linguistic nuances across dozens of Indian languages, enabling voice-first and vernacular experiences that significantly reduce friction.
Together, these capabilities allow startups to build nationwide products from day one without needing sequential, market-by-market expansion.
Affordability: A critical driver of adoption
However, affordability remains the decisive factor in whether AI products succeed in Bharat. AI-led expert services can be significantly more affordable, while still accurate, compared to human-led services of a similar quality. And with token costs expected to fall further, AI has the potential to offer premium offerings at mass-market prices.
Micropayments strengthen this affordability by reducing perceived risk. When users can “pay as they benefit,” adoption becomes far easier. India’s digital rails deepen this advantage: UPI now processes over 640 million transactions a day, the majority of them from Bharat consumers. Frictionless micro-transactions make low-cost, high-frequency AI services viable at scale. This combination enables users to try, verify and then gradually rely on products.
Over time, what truly builds loyalty is measurable improvement. Tangible outcomes like a higher credit score, stronger exam results, better health indicators, or increased crop yields are powerful validators of the technology.
AI-powered credit-building tools, tutoring platforms, health guidance services and multiple agri-advisory platforms exemplify this trend. They succeed not by replacing high-quality services, but by delivering dependable solutions where few existed.
Building culturally and contextually intelligent AI products
To succeed in Bharat, startups must go beyond AI that is technically capable to AI that is culturally and contextually aware. This means optimising models for specific problems and creating human interventions to build comfort and trust. Equally important is removing friction through voice-first interfaces in regional language, transparent onboarding, and payment models that allow users to experience the product.
If the first decade of India’s internet was about access, the next will be about intelligence. For founders, Bharat’s AI opportunity lies in solving for trust, language and price and for the first time, technology itself is capable of solving all three at once.
The writer is Partner, Stellaris Venture Partners.
As this momentum builds, the question for AI is no longer if Bharat will embrace it, but how quickly. For startups, this represents both an opportunity and a test: to build AI products that can earn trust, bridge the affordability gap and deliver real value to users. The next breakout companies will be those that design for Bharat from day one, not as an afterthought.
Unmet needs in a value-conscious market
Bharat represents one of the world’s largest yet underserved consumer markets. Access to essential services such as quality education, reliable healthcare, or sound financial advice still remains unavailable or inaccessible. Even when available, they are often expensive or delivered by unreliable service providers with varying levels of quality.
The challenges faced by Bharat’s consumers differ significantly from those in Tier-1 cities. While smartphone penetration is deep and data is affordable, disposable incomes are lower, making affordability a key barrier. More importantly, these users are also value-conscious: willing to pay, but only after demonstrable benefits. Language further complicates the experience. For millions of Indians, English-first or even Hindi-first interfaces feel unfamiliar or intimidating.
These realities demand solutions that combine utility, affordability and cultural relevance from the outset.
How AI can close the trust gap
AI’s potential in Bharat lies in its ability to understand context and deliver expert-grade, personalised, real-time assistance at scale, something earlier waves of technology could not achieve with accuracy. In a country where 88% of districts lack specialist doctors and where teacher availability varies drastically across states, AI can handle a large share of routine queries, triage health concerns, support schoolwork and guide financial decisions without depending on scarce expert human resources.
Yet, like any new technology, AI must first overcome a trust gap. And the best way to build trust is through accurate, personalised advice tailored for each individual.
This is where linguistic intelligence becomes crucial. LLMs can understand dialects, local expressions and everyday phrasing, making interactions feel familiar and personal. With Indians sending more than seven billion WhatsApp voice messages every day, speech is already the most natural mode of digital communication. Modern multimodal AI now builds on this by interpreting regional accents and linguistic nuances across dozens of Indian languages, enabling voice-first and vernacular experiences that significantly reduce friction.
Together, these capabilities allow startups to build nationwide products from day one without needing sequential, market-by-market expansion.
Affordability: A critical driver of adoption
However, affordability remains the decisive factor in whether AI products succeed in Bharat. AI-led expert services can be significantly more affordable, while still accurate, compared to human-led services of a similar quality. And with token costs expected to fall further, AI has the potential to offer premium offerings at mass-market prices.
Micropayments strengthen this affordability by reducing perceived risk. When users can “pay as they benefit,” adoption becomes far easier. India’s digital rails deepen this advantage: UPI now processes over 640 million transactions a day, the majority of them from Bharat consumers. Frictionless micro-transactions make low-cost, high-frequency AI services viable at scale. This combination enables users to try, verify and then gradually rely on products.
Over time, what truly builds loyalty is measurable improvement. Tangible outcomes like a higher credit score, stronger exam results, better health indicators, or increased crop yields are powerful validators of the technology.
AI-powered credit-building tools, tutoring platforms, health guidance services and multiple agri-advisory platforms exemplify this trend. They succeed not by replacing high-quality services, but by delivering dependable solutions where few existed.
Building culturally and contextually intelligent AI products
To succeed in Bharat, startups must go beyond AI that is technically capable to AI that is culturally and contextually aware. This means optimising models for specific problems and creating human interventions to build comfort and trust. Equally important is removing friction through voice-first interfaces in regional language, transparent onboarding, and payment models that allow users to experience the product.
If the first decade of India’s internet was about access, the next will be about intelligence. For founders, Bharat’s AI opportunity lies in solving for trust, language and price and for the first time, technology itself is capable of solving all three at once.
The writer is Partner, Stellaris Venture Partners.
(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)
