India could unlock an additional $500–600 billion in GDP by 2035 through accelerated AI adoption, according to a new report released by NITI Aayog. Titled AI for Viksit Bharat: The Opportunity for Accelerated Economic Growth, the report outlines how artificial intelligence can reshape core sectors such as finance and manufacturing by boosting productivity, streamlining operations, and creating new high-value capabilities.
At a global level, AI is projected to contribute $17–26 trillion to the economy over the next decade. India, with its strong digital infrastructure and STEM talent pool, is positioned to capture up to 10–15% of this value.
Sector-level gains led by AI integration
Financial services and manufacturing are expected to be the biggest beneficiaries of AI-driven growth. NITI Aayog estimates that AI could account for up to 25% of sectoral GDP in these industries by 2035.
In finance, AI is expected to power use cases like automated compliance, fraud detection, and privacy-preserving analytics. Tools such as federated learning and secure multi-party computation could enable data sharing without compromising user privacy.
Manufacturing could see an additional $85–100 billion in value over current projections. AI-led improvements in demand forecasting, quality control, and predictive maintenance are expected to drive this acceleration.
Economic trajectory and workforce impact
India’s GDP is currently projected to reach $6.6 trillion by 2035 at a 5.7% growth rate. Under the government’s 8% growth vision for a developed India (Viksit Bharat), GDP could reach $8.3 trillion — an incremental $1.7 trillion. AI is identified as a key lever to bridge this gap.
While AI will create new roles, it will also displace low-skill and routine jobs. The report emphasises the need for large-scale reskilling and transition planning to manage this shift. Investments in education, innovation, and digital public infrastructure are seen as essential enablers.
Responsible AI as a growth imperative
NITI Aayog advocates for a sector-specific approach to AI adoption, with a focus on governance, transparency, and ethical deployment. The report highlights AI’s role in new frontiers like AI-driven drug discovery and software-defined vehicles, but also stresses the importance of compliance, data protection, and public trust.
According to the report, companies that lead in AI adoption today will also drive India’s global competitiveness in the next decade. A focused AI strategy can help India leapfrog traditional growth barriers and deliver inclusive, innovation-led development.
