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India could add $500 billion to GDP by 2035 through strategic AI adoption: Acuité's Sankar Chakraborti
The strategic adoption of artificial intelligence (AI) could boost India's annual GDP growth by 1.3%, contributing an additional $500 billion to the economy by 2035, says Sankar Chakraborti, MD of Acuité Ratings & Research Limited. In an interview with ET Digital, Chakraborti highlights the pivotal role of AI in fostering innovation, generating jobs, and stimulating economic growth. However, he notes that the primary obstacles are inadequate high-performance computing capacity and continued brain drain. He asserts that AI should extend beyond urban centres to rural and semi-urban India. This expansion will require investments in infrastructure, affordable internet, and localised AI applications for small businesses to fully realise the potential of this opportunity. Edited excerpts:
ET: How significant is the economic potential of AI for India's long-term growth trajectory?Sankar Chakraborti (SC):
AI has been a game changer, and our analysis reveals that if adopted strategically, it has the potential to add 1.3% to the country's annual GDP growth. To put that in perspective, that's potentially half a trillion dollars added to India's economy by 2035. These are not just numbers; these are the indicators of better opportunities, more innovation, and a tech-savvy Viksit Bharat.
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ET: What factors contribute to India's unique position for accelerating large-scale AI adoption?
SC:
India enjoys a strong digital and demographic foundation. Our mobile internet usage is high, with 796 million users and 16.4 GB average monthly data consumption per user—the highest globally. The country has an unmatched human capital scale with a median age of 28. It produces 1.4 million IT graduates annually.
India's digital infrastructure holds a massive advantage for expedited AI penetration; add to this a young population, 1.4 million IT graduates annually, and pioneering platforms like Aadhaar and UPI (Unified Payments Interface), and you have an ecosystem well-suited for rapid AI penetration across sectors.
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ET: Given the potential impact of AI on the job market, what steps can India take to address this issue?
SC:
AI is an inherently transformative technology. As AI models get more refined, they can automate more routine tasks, and that will impact certain jobs. Research suggests that over 40% of working hours could be automated by 2030, potentially affecting millions of jobs. But this isn't just about job losses; it's about job transformation. The key is how we respond. Such huge disruption will also create new jobs that will require specialised skills to develop and manage AI. The government has a crucial role to play in reskilling and upskilling our workforce, helping people adapt to these changes and seize the opportunities that AI will create. India currently accounts for just 9.2% of global AI research publications, far behind China's 23.2% and the US's 15.2%. Barring a few top educational institutes, there is negligible effort for producing world-class AI research. The onus should be on developing skills for the AI age, rather than creating a state of anxiety around AI-triggered job losses.
ET: In India, there is a stark variation in internet penetration. The penetration of AI also varies across different sectors. How can India ensure inclusive AI development and global competitiveness compared to nations like the US and China?
SC:
To make AI equitable, we need to narrow the existing digital divide in India. The focus should be on building digital infrastructure in rural areas and tier-II and tier-III cities. Affordable internet and localised AI solutions tailored for smaller businesses in these regions are key. We also need to boost research and innovation through academic partnerships and incentivise industries to explore AI. India has just 6 supercomputers in the global top 500, compared to 63 in China and 173 in the US. This highlights the shortfall in digital infrastructure. If we can tackle these issues head-on, India can compete with global AI leaders like the US and China.
ET: Which sectors are poised to gain the most from the AI boom in India?
SC:
AI has the potential to touch every part of our economy, but some sectors are poised for major transformation. Healthcare is a big one. Think about AI helping doctors diagnose diseases earlier and more accurately. Agriculture can be revolutionised with precision farming techniques. Education can become much more personalised. And financial services can reach more people and prevent fraud. These are just a few examples. Now, will every job in these sectors be replaced? Not really. But many jobs, especially for clerical and administrative workers, are expected to become extinct. The smart move is to focus on how AI can augment human capabilities, not just replace them.
ET: Despite the government's support, what are the key roadblocks that could slow
AI adoption in India
?
SC:
In AI adoption, complacency and rigidness can be major challenges. A successful AI rollout requires a mindset geared toward continuous learning and innovation. Bridging the skills gap is crucial, as is improving data quality and infrastructure. Importantly, India must establish clear guidelines around responsible AI, privacy, and ethics to ensure sustainable, trust-driven growth in the sector.
