The pilot, which is being run in Varanasi, will run till middle of the next year.
"Under the pilot, we are using sensors to collect data, which will be then fed to a common centre to derive useful information. The pilot has just started and will go on till middle of next year," Intel President India Kumud Srinivasan told reporters here.
The US-based firm is also engaged in other projects with state governments to help fulfil the Digital India vision, she added.
Intel has about 6,900 employees in India with a major part of the headcount being engaged in research and development activities in Bengaluru and Pune.
"India is a very important market for us, from R&D point of view too, as teams here works on every category from servers to PCs to IoT," she said.
Srinivasan said the India team is the third largest, after the US and Israel.