AI Could Add $550 Billion to India’s Economy by 2035, PwC Report Finds

• AI could add nearly $550 billion to India’s economy by 2035, driving long-term growth.

• Key beneficiary sectors include agriculture, healthcare, energy, education, and manufacturing.

• AI adoption can boost farm productivity, addressing challenges faced by small and marginal farmers.

• Advanced AI use may strengthen healthcare access, manufacturing competitiveness, and energy efficiency.

• PwC frameworks stress ethical, inclusive, and large-scale AI integration for sustainable development.

Artificial intelligence has the potential to deliver a significant boost to India’s economy over the next decade, with its overall impact estimated at nearly $550 billion by 2035, according to a new report by consulting firm PwC. The study highlights AI as a key growth engine across several critical sectors, including agriculture, healthcare, energy, education, and manufacturing.

The report, titled AI Edge for Viksit Bharat, was unveiled last week at the World Economic Forum in Davos. It projects that AI-driven applications alone could generate close to $550 billion in economic value across five priority sectors by 2035, measured in nominal terms. PwC also suggested that India has the opportunity to position itself as a global case study for how emerging economies can deploy AI in ways that are both impactful and inclusive.

Agriculture and productivity challenges

Agriculture continues to be the foundation of India’s economy, the report noted. To achieve the broader ambitions of Viksit Bharat, the sector’s gross value added would need to grow substantially—from an estimated 2,359 billion by FY47.

Despite its importance, the sector faces deep-rooted productivity issues. PwC pointed out that nearly 86 per cent of Indian farmers fall into the small or marginal category, typically owning less than one hectare of land. Addressing these challenges will require faster adoption of digital solutions, particularly AI-based tools, to raise efficiency, improve yields, and ensure the long-term sustainability of farming.

Energy, healthcare, and manufacturing in focus

The energy sector was identified as a critical driver for progress in both agriculture and manufacturing. According to the report, a reliable and efficient energy system is essential for meeting national development goals, as it underpins industrial growth and supports modern, technology-driven farming.

In healthcare, PwC emphasised the expansion of tertiary and super-speciality services through medical colleges linked to district hospitals. Such an approach could generate high-skilled employment, reduce the outflow of medical professionals, and attract medical tourism. AI, the report noted, can play a role in improving diagnostic accuracy, operational efficiency, and access to advanced care beyond major urban centres.

Manufacturing was another area highlighted for its AI-led growth potential. Sectors such as semiconductors, solar equipment, telecommunications, and electronics were identified as key contributors. The report said that accelerated growth in these industries, supported by AI and digital technologies, could strengthen the goals of Aatmanirbhar Bharat and deepen India’s integration into global value chains.

Education, governance, and skills

Beyond sector-specific gains, the report underlined AI’s role in improving education outcomes, strengthening governance, and aligning skills with labour market needs. By enhancing the quality of learning and making systems more responsive, AI could help improve employability and workforce readiness.

Frameworks for large-scale AI adoption

PwC also outlined the broader outcomes expected from widespread AI adoption through its AI Edge framework. These outcomes include improved operational efficiency, greater sustainability, stronger governance, increased resilience, and better financial discipline across institutions.

To support this vision, the report introduced the 3A2I framework, designed to integrate AI into India’s development ecosystem. The framework prioritises building access to data, infrastructure, and skills; fostering acceptance through trust, transparency, and ethical safeguards; and enabling assimilation by embedding AI into real-world applications.

Once these foundations are established, the framework aims to support large-scale deployment and long-term institutionalisation of AI through robust governance structures and continuous learning mechanisms.