As India bets big on AI, can it deliver economic growth that is truly inclusive?

While AI development has been dominated by the US and China, India is clearly on the AI map.

According to a report by the Niti Aayog titled AI for Viksit Bharat, AI adoption across sectors could add $17-26 trillion to the global economy over the next decade, with India well placed to capture 10-15% of that value, thanks to its large STEM workforce, expanding R&D base and growing digital capabilities. Stanford’s Global Vibrancy Tool ranked India fourth on AI globally in late 2024, before elevating it to third place in its 2025 edition.

The government think-tank’s Viksit Bharat report released in September describes AI as a “decisive lever” to push India’s economic growth towards an 8% annual trajectory, which is roughly what the country needs to achieve its 2047 aim of being counted among ‘developed’ countries (as measured by national output). The report argues that this growth bump-up can be unlocked by speeding up the use of AI across industries to lift productivity and overall economic efficiency.

To see that happen, India is moving to maximize the benefits of AI through targeted investment, policy enablers and a ‘techno- legal’ approach that seeks to balance innovation with guardrails. Data-centre capacity is expanding rapidly, while the IndiaAI Mission is easing access to AI compute power.

The Centre’s approval of 10 semiconductor plants should strengthen the country’s electronics ecosystem, even as startups build Indian- language and voice models that are vital for inclusion in a country where millions remain sub-literate.

India’s AI Kosh repository, which hosts close to 6,000 local datasets, offers a data backbone for innovation anchored in digital public infrastructure, spanning Aadhaar, UPI, the Health Stack and more.

For AI to fulfill its promise, though, it also needs to be democratized. This challenge is particularly acute across the Asia-Pacific region, which already accounts for more than half of all global AI users and nearly 70% of AI patents. A UNDP report, The Next Great Divergence, cautions that while AI could lift GDP growth by around two percentage points and raise productivity by up to 5% in key sectors, these gains are not likely to be evenly shared.

Many economists worry that AI will take away jobs, empower some classes over others and worsen disparities unless special efforts are made to prevent it. That said, India, as per the UNDP report, is well placed to push for a more inclusive AI transition.

Some steps are already visible. Niti Aayog’s October 2025 report, AI for Inclusive Societal Development, highlights initiatives such as the Digital ShramSetu Mission, which uses AI-driven tools to boost productivity and resilience among millions of workers in the informal sector by expanding access to healthcare, education, skilling and financial services.

The AI Impact Summit 2026, which builds on earlier multilateral conclaves held in Bletchley Park, Seoul, Paris and Kigali, is appropriately themed ‘Democratising AI, Bridging the AI Divide.’ With the right policy choices, we could align the rise of AI with the cause of equitable development.