Artificial intelligence is projected to contribute approximately $607 billion to India’s economy by 2035, underscoring AI’s growing role as a key driver of productivity, innovation, and long-term economic growth.
The estimate highlights how AI adoption across industries such as IT services, manufacturing, healthcare, finance, and agriculture could significantly reshape India’s economic landscape over the next decade.
AI as a Major Economic Growth Engine
According to the report, AI’s economic impact will be driven primarily by productivity improvements, cost optimization, and the creation of new digital capabilities. Rather than replacing human labor at scale, AI is expected to augment existing jobs, streamline workflows, and enable faster decision-making across sectors.
India’s large workforce, expanding digital infrastructure, and strong IT services ecosystem position the country well to capture value from AI-driven transformation.
Key Sectors Set to Benefit from AI
Several industries are expected to contribute significantly to AI-led economic growth:
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IT and software services, through automation, AI-powered development tools, and managed AI platforms
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Manufacturing, via predictive maintenance, quality control, and smart factories
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Healthcare, through diagnostics, personalized treatment, and operational efficiency
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Financial services, using AI for risk assessment, fraud detection, and customer engagement
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Agriculture, with AI-enabled crop monitoring, yield optimization, and supply chain insights
Together, these sectors could account for a substantial share of AI’s projected economic contribution.
India’s Digital Advantage
The report notes that India’s rapid adoption of cloud computing, data platforms, and digital public infrastructure provides a strong foundation for scaling AI. Initiatives around digital identity, payments, and data access are helping organizations deploy AI solutions faster and at lower cost.
Additionally, India’s role as a global technology services hub allows enterprises to develop AI capabilities not only for domestic use but also for international markets.
Talent and Skill Development Remain Critical
While the economic potential is significant, the report emphasizes that realizing this opportunity will depend heavily on AI talent development and workforce upskilling. Demand for skills in data science, machine learning, AI engineering, and AI governance is expected to rise sharply.
Investments in education, industry-academia collaboration, and continuous learning will be essential to ensure that the workforce can adapt to AI-driven change.
Challenges Around Adoption and Governance
Despite strong growth prospects, the report highlights challenges that could slow AI adoption if not addressed. These include data quality issues, uneven access to computing resources, regulatory uncertainty, and concerns around ethics and trust.
Clear governance frameworks, responsible AI practices, and increased collaboration between government and industry will be key to unlocking AI’s full economic value.
A Long-Term Opportunity for India
The projected $607 billion contribution by 2035 reflects AI’s potential to become a core pillar of India’s economic strategy, rather than a standalone technology trend. As adoption deepens, AI is expected to influence not just productivity but also innovation, competitiveness, and global positioning.
Looking Ahead
AI’s contribution to India’s economy will likely accelerate as enterprises move from experimentation to large-scale deployment. With the right mix of policy support, talent development, and responsible innovation, India has the opportunity to emerge as a global leader in applied AI over the coming decade.
