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AI Could Add $1.7 Trillion to India’s GDP by 2035, Says NITI Aayog Report
NITI Aayog: NITI Aayog and NITI Frontier Tech Hub have released a report on the role of AI in the Indian economy. According to the report, by adopting AI, India can increase its GDP from an estimated $ 6.6 trillion to $ 8.3 trillion by 2035. It says that to achieve a growth rate of eight percent, the country will have to promote both productivity and innovation on a large scale.
On Monday, NITI Aayog and NITI Frontier Tech Hub released a detailed report describing AI as a decisive tool for India's economy. This vision is shown in the report 'AI for Developed India: Opportunities for Accelerated Economic Growth'. According to the report, through the adoption of AI and changes in research and development (R&D), India can increase its GDP from an estimated $ 6.6 trillion to $ 8.3 trillion by 2035. It will be possible to cover almost half of the development gap with the help of AI.
Releasing the NITI Aayog AI report, Finance Minister Nirmala Sitharaman said that we do not want regulations that will kill innovation. She said that AI should help in providing solutions for better cities.
Union Minister Ashwini Vaishnav, on this occasion, said that AI is going to fundamentally change every aspect of life. He stressed the importance of India being a leader in developing and adopting AI technologies. The minister highlighted that AI has emerged as the biggest technological change in recent decades, and its impact will be similar to that of the Internet.
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The report said that to achieve a growth rate of eight percent, the country will have to promote both productivity and innovation on a large scale. NITI Aayog CEO BVR Subramaniam said that AI can be a decisive lever for a growth rate of more than eight percent.
He said that if an industry-centric and sector-specific approach is adopted, efficiency, service quality, and competitiveness can be improved by using AI in sectors like banking and manufacturing from now on. This will accelerate the pace of change in the future.
The analysis highlights two major opportunities, first, increasing the pace of AI adoption in industries. This can lead to additional growth of 30-35 percent. Second, transforming research and development (R&D) through generative AI, which can contribute up to 20-30 percent.
According to the report, sectors like banking and manufacturing can benefit first. AI in financial services will provide hyper-personalized experiences to customers, advanced fraud prevention and more inclusive lending facilities. It is estimated that this can add additional value of $ 50-55 billion by 2035. In the manufacturing sector, additional value of $ 85 to $ 100 billion can be added through AI-based productivity enhancement, predictive maintenance and smart product design.
Not limited to just adoption, the report also emphasizes on promoting frontier innovation. It has identified AI-enabled drug discovery, software-assisted vehicles and next-generation auto components as the growth engines of the future.
In the pharmaceutical sector, AI can reduce the cost of drug discovery by 30% and the time frame by 80%. This will enable India to move from a market dependent only on generic medicines to innovation-driven leadership.
The roadmap for the automobile sector envisages 18 to 20 million software-assisted vehicles on Indian roads by 2035. These will be supported by smart corridors and digital testing parks. Such innovations can lead to export benefits of $20-25 billion and import substitution. This will give India an export benefit of $20-25 billion and will also reduce dependence on imports.
