AI Could Add $500 Billion to India’s Economy by 2030: Explained

Artificial intelligence could become a transformative force for India, with a joint study by IBM and IndiaAI estimating that it may contribute more than USD 500 billion to the country’s economy by 2030.

The report, titled “From promise to power: How AI is redefining India's economic future,” reflects growing confidence among businesses. It notes that four in five business leaders believe AI investments will directly influence India’s GDP growth, while 73 per cent expect the country to emerge as a leading global AI nation within this decade.

Why is there concern about an “execution gap”?

Despite the optimism, the report flags a significant gap between ambition and actual implementation. Around 72 per cent of organisations surveyed admitted they are lagging behind global peers in AI adoption.

This gap, the report warns, “will be pivotal in determining India's leadership in the global AI economy.” While many companies are experimenting with AI, only a small proportion have scaled it across operations.

What is the government’s vision for AI in India?

India’s approach to AI is being framed as both strategic and inclusive. Speaking at the report launch, MeitY Secretary S Krishnan emphasised the country’s evolving role in the global AI landscape.

"India is no longer just participating in the global AI conversation, we are helping shape it. Our vision is clear. AI must evolve as an extension of our people's aspirations, driving inclusive growth and national progress," he said.

"Guided by our vision of Viksit Bharat, we are advancing a human centric approach to AI rooted in trust, ethics, and national sovereignty".

This signals a focus not just on growth, but also on governance, ethics, and societal impact.

Why are data and infrastructure key challenges?

The study highlights structural bottlenecks that could slow AI adoption. A majority of executives stressed the importance of data control, with 74 per cent saying it is essential to know where data resides. This reflects a growing push for sovereign and hybrid AI systems.

At the same time, infrastructure remains a concern. About 77 per cent of respondents identified the lack of “accessible, affordable, and secure cloud infrastructure” as a major barrier. Additionally, 57 per cent pointed to uneven data quality as a persistent issue.

Together, these challenges underline the need for robust digital infrastructure and reliable datasets to support AI systems at scale.

Does India have enough AI-skilled talent?

Talent is emerging as one of the biggest constraints. The report finds that only around 30 per cent of employees currently have the AI literacy levels required by businesses.

To meet future demand, this figure would need to nearly double to 57 per cent by 2030. The study estimates that India will require more than 350 million AI-skilled workers by the end of the decade, highlighting the scale of the skilling challenge ahead.

Are companies ready to scale AI adoption?

Most Indian enterprises are still in early stages of AI adoption. Only 15 per cent of organisations are scaling AI through “significant cross-functional investments,” while the vast majority remain in pilot phases.

Governance is another weak link. Around 68 per cent of enterprises cited gaps in AI governance as a barrier, and an equal proportion emphasised the need for an “ecosystem-oriented approach” to accelerate adoption.

What will determine whether India realises this opportunity?

According to Sandip Patel, the opportunity is substantial but not guaranteed.

"AI has the potential to become one of the most powerful growth engines for India's economy," Patel said. "With the right investments in skills, governance, and infrastructure, India can translate AI ambition into sustained economic impact."

Ultimately, the report suggests that India’s success in harnessing AI will depend on how effectively it bridges gaps in adoption, builds infrastructure, and develops a skilled workforce capable of sustaining long-term growth.

(With inputs from ANI)