AI could add $600B to India’s GDP by 2035

Accelerated adoption of Artificial Intelligence (AI) across industries could contribute between USD 500 billion and USD 600 billion to India’s GDP by 2035, driven by improved productivity and workforce efficiency, according to a report released by NITI Aayog on Monday. The report, titled “AI for Viksit Bharat: The Opportunity for Accelerated Economic Growth,” also noted that AI adoption globally is expected to add USD 17–26 trillion to the world economy over the next decade.

The report highlighted that India’s large STEM workforce, expanding R&D ecosystem, and growing digital and technology capabilities position the country to capture 10–15 per cent of global AI value. It further stated that while AI will create numerous new roles, it may displace jobs in clerical, routine, and low-skill segments.

According to the analysis, the financial services and manufacturing sectors are likely to be most impacted, with AI potentially contributing 20–25 per cent of sectoral GDP by 2035. In financial services alone, AI-led productivity improvements could unlock USD 50–55 billion beyond the sector’s current projected growth, through applications such as automated compliance, fraud detection, risk management, credit decisioning, collections, and portfolio management. The report emphasized that leveraging alternative data can enable more accurate, dynamic, and inclusive lending decisions.

In manufacturing, AI-driven efficiency could contribute an additional USD 85–100 billion to India’s GDP growth by 2035. AI adoption is expected to enhance both domestic consumption and exports, with innovation in technology services potentially adding 15–20 per cent more to overall economic growth through higher-value solutions and new business models.

India’s GDP, growing at the current rate of 5.7 per cent, is projected to reach USD 6.6 trillion by 2035, but under the government’s aspirational 8 per cent growth trajectory under the Viksit Bharat vision, GDP could rise to USD 8.3 trillion, representing an incremental USD 1.7 trillion compared to the current path.

BVR Subrahmanyam, CEO of NITI Aayog, stated that achieving 8 per cent growth requires significant productivity gains and innovation. He added that sector-specific AI deployment in banking, manufacturing, and frontier technologies such as AI-enabled drug discovery and software-defined vehicles will be critical to achieving these targets, asserting that “the path to 8 per cent growth runs through decisive AI adoption and innovation.”