PSUs, state bodies drive AI-based chatbot adoption in India

Public sector organizations and government agencies are leading the adoption of artificial intelligence (AI) based chatbots in India, using them for everything from citizen engagement to ticket booking and customer service. While Indian government bodies are still behind global counterparts in adoption of AI, experts said that the growth of chatbots in the public sector began during the pandemic and has continued.

The range of deployments include bodies such as the National Payments Corp. of India (NPCI), Indian Railways, Bangalore Metro Rail Corp. Ltd (BMRCL) and Bharat Petroleum Corp. Ltd (BPCL), which are increasingly using these automation platforms to answer user queries and even accept bookings.

On 1 November, BMRCL introduced an automated text platform on WhatsApp. The platform, developed by homegrown AI conversation service provider Yellow.ai, offers ticket and metro rail pass booking. Users can enquire about routes and ticket prices, and register their unified payments interface (UPI)-linked bank accounts to purchase tickets and passes for journeys.

Rashid Khan, co-founder and chief product officer of Yellow.ai told Mint that since being rolled out, BMRCL’s WhatsApp platform has seen over 15 million messages exchanged on the platform, onboarding over 100,000 users in this period.

“We are seeing at least 10,000 new users being added to the service every week, and the bilingual service has so far seen about 30% of usage in Kannada, with the rest being in English,” Khan added.

Yellow.ai has around 10 active clients from governments and public sectors, including the BPCL and Madhya Pradesh State Electricity Board. It expects to earn about 30% of its revenues from government and public sector projects by FY24.

Other companies offering conversational automation services, such as Bengaluru-based Gupshup, are also seeing an influx of clients. Beerud Sheth, chief executive of Gupshup, said the company is working with bodies like the NPCI, for which it built ‘DigiSaathi’ in May this year—a chatbot service for customers to find information on resolution of issues with digital payments, on WhatsApp.
In March, Gupshup built ‘Conversations on the move’ for the Central Railways, which is a chatbot designed for user entertainment on select train routes. The service is presently available on 10 trains, and offers passengers infotainment on journey locations.

“Government bodies are realizing that for users in emerging markets such as India, chat apps and platforms are super apps—where users do payments, content sharing and more, apart from just conversations. There is a natural evolution process where chatbot adoption is picking up, since this gives users great convenience,” Sheth said.

Yellow.ai’s Khan concurred, stating that being able to offer multi-language conversation platforms through chat services has far greater value than asking users to access websites.

In 2022 itself, the range of organizations that have adopted conversational automation platforms include Madhya Pradesh Chief Minister’s Office for a ‘CM Helpline’ service, Maharashtra State Election Commission for voter registration and name search guidance, the Madhya Pradesh Commercial Tax Department’s WhatsApp chatbot in Hindi and ‘Megha’ for offering guidance to businesses for Goods and Services Tax (GST) payments and resolutions.

That said, roadblocks still exist. Kashyap Kompella, AI analyst and chief executive of industry research firm RPA2AI, said that government agencies need to take cues from private sector deployment of chatbots for offering actual value addition to customers, instead of just offering a first-stage chatbot in the market.

“If you look at services such as the Indian Railways Catering and Tourism Corp. (IRCTC), the chatbot service is not particularly helpful. More government bodies need to see how private companies are facilitating seamless operations, such as deployment of know-your-customer (KYC) services among private banks, to be able to make actual use of AI adoption in their services,” he said.

He also said that government bodies in India are yet to use automation for internal processes, which would increase adoption further. “Numerous government bodies in the US, for instance, use automation to simplify internal processes. India’s deployment of AI platforms is still at an early stage, in this regard.”

For firms that provide such services, contracts from corporates remain more lucrative too, because governments offer fixed-value contracts based on tenders, whereas corporates pay on a per-message basis for their chatbots.