India is poised to leverage generative AI (Gen AI) to add up to $1.5 trillion to its GDP over a seven-year period from 2023-24 to 2029-30, according to a report by EY. The study, titled “AIdea of India: Generative AI’s potential to accelerate India’s digital transformation,” suggests that generative AI could contribute an additional 0.9-1.1% to India’s GDP growth annually, representing up to 7.2% of the country’s GDP by 2030. Currently, India boasts the world’s fifth-largest economy and is projected to surpass Germany and Japan to become the third-largest by 2027.
The EY report identifies key sectors where generative AI is expected to have a significant impact, including business services (IT, legal, consulting outsourcing, rental, etc.), financial services, transportation and logistics, education, retail trade, and healthcare. These sectors are predicted to account for approximately 69% of the overall impact of generative AI in India. The report emphasizes that the Indian government recognizes the economic potential of AI and acknowledges that Indian enterprises are optimistic about Gen AI’s potential but also need better preparation for navigating digital transformation.
A survey included in the report, covering 1,200 CEOs from large companies globally, reveals that 99% of companies are planning to invest in Gen AI. Despite this enthusiasm, around two-thirds of respondents express a low-to-moderate level of readiness to leverage Gen AI benefits. The study suggests that many companies (83%) envision partnering with external tech providers to implement their Gen AI strategies. The report highlights India’s potential to become a processing hub for the world as it capitalizes on the economic opportunities presented by generative AI.
The findings underscore the transformative potential of AI technologies, positioning India to not only sustain its robust economic growth but also accelerate its ascent on the global economic stage. As nations increasingly compete in the digital era, those embracing AI and related technologies stand to gain significant advantages in productivity, innovation, and economic output.