AI Can Add $1.4-$1.7 Trillion to GDP by 2035

Chennai: At its current growth rate of 5.7 per cent, India’s GDP is projected to reach $6.6 trillion by 2035. However, to achieve the government’s vision of Viksit Bharat, it has to grow by 8 per cent and increase GDP to $8.3 trillion and for this AI adoption, especially in 18 sectors will help add $1.4 trillion to $1.7 trillion by 2035, finds Niti Aayog.

Over the next decade, the adoption of Artificial Intelligence (AI) across sectors is expected to add $17–26 trillion to the global economy. India’s combination of a large STEM workforce, expanding R&D ecosystem, and growing digital and technology capabilities positions the country to participate in this transformation, with the potential to capture 10–15 per cent of global AI value.

Placed against India’s economic outlook, this potential becomes more significant. At its current growth rate of 5.7 per cent, India’s GDP is projected to reach $6.6 trillion by 2035. However, under the aspirational 8 per cent growth trajectory outlined in the government’s vision for the nation known as Viksit Bharat, India’s GDP could increase to $8.3 trillion, representing an incremental $1.7 trillion compared with the current growth path.

Accelerating AI adoption across industries will improve productivity and efficiency, potentially bridging 30–35 per cent of the gap. AI can drive higher output, lower costs of goods and services, and improve access for underserved domestic and export markets. By transforming R&D, through generative AI, India can leapfrog into innovation-driven global opportunities, bridging a minimum 20–30 per cent of the gap. Innovation in technology services can contribute another 15-20 per cent to the step up.

One of India’s biggest strengths is its data, and it has the potential to leverage this advantage. In the digital economy, data will function as currency that powers innovation, drives valuations, and shapes global leadership.

Niti Aayog has identified 18 areas where AI can help achieve higher incremental growth. These include next-gen e-commerce, travel and tourism, urban construction, AI software and services, cloud services, auto components, cybersecurity, software-assisted vehicles, semiconductors and PCBs, renewables with storage systems, medical devices, bio-based energy and materials, space tech, aerospace and defence, nuclear power and biopharma, industrial electronics and industry in general.