AI Push Can Add $600 Billion to GDP by 2035

Accelerated AI adoption in India could contribute $500-600 billion to GDP by 2035, driven by productivity gains in financial services and manufacturing. A NITI Aayog report highlights AI’s potential to close the gap between India’s projected $6.6 trillion GDP and its $8.3 trillion target under the Viksit Bharat 2047 framework. Key sectors like space tech, R&D, and financial innovation could fuel growth, with new initiatives fostering AI-driven economic transformation.

Artificial Intelligence (AI) has emerged as a transformative force across industries, and its accelerated adoption in India could significantly boost the nation’s economic landscape. According to a report released by NITI Aayog on Monday, AI could contribute an additional $500-600 billion to India’s GDP by 2035, over and above the current growth trajectory. This is projected to stem from enhanced workforce productivity and efficiency, with financial services and manufacturing expected to account for 20-25% of the GDP gains over the next decade.

A Vision for Growth

The report, titled ‘AI for Viksit Bharat: The Opportunity for Accelerated Economic Growth’, highlights India’s unique position to potentially capture 10-15% of the global AI market. It aligns with the Viksit Bharat 2047 framework, which envisions an 8% annual growth trajectory, placing India’s GDP target at $8.3 trillion by 2047. This ambitious vision creates a growth opportunity of approximately $1.7 trillion.

AI adoption, coupled with transformative advancements in research and development (R&D), is expected to bridge nearly half of the gap required to propel India’s GDP from the projected $6.6 trillion to $8.3 trillion by 2035. “If India is to achieve the 8% growth necessary for the realisation of Viksit Bharat, we must significantly enhance productivity and foster innovation. Artificial intelligence stands as a pivotal lever in this journey,” said BVR Subrahmanyam, CEO of NITI Aayog, during the report’s unveiling.

Key Growth Areas

The report identifies 10 critical sectors that hold immense potential for AI-driven economic gains. These include space technology, aerospace and defense, cybersecurity, and medical devices. Collectively, these areas could contribute $380-660 billion in incremental GDP growth by 2035, according to Noshir Kaka, senior partner at McKinsey & Company, which collaborated on the report.

The breakdown of AI’s influence on GDP growth is striking. Increased AI usage across industries could account for 30-35% of the growth, while generative AI’s role in transforming R&D could contribute 20-30%. Additionally, innovations in technology services might add another 15-20% to the overall economic uplift.

AI in Financial Services and Manufacturing

In financial services, AI is set to revolutionize customer experiences through hyper-personalization, advanced fraud detection mechanisms, and more inclusive lending solutions. These advancements are projected to unlock $50-55 billion in additional value by 2035.

Meanwhile, the manufacturing sector stands to benefit from AI-driven improvements in productivity, predictive maintenance, and intelligent product design. Collectively, these enhancements could add $85-100 billion to India’s GDP.

Building India’s AI Ecosystem

To further harness the potential of AI, NITI Aayog has launched a frontier tech repository, a curated platform showcasing impact-driven technology applications that address real-world problems. The national think tank has also established the Frontier Tech Hub, which will recognize states that effectively leverage frontier technologies through state impact awards.

By fostering innovation and scaling AI across industries, India is well-positioned to unlock new growth opportunities, bridge economic gaps, and secure a prominent place in the global AI landscape. The journey to Viksit Bharat is undoubtedly ambitious, but with AI as a cornerstone, the possibilities are boundless.