India eyes $1.7 trillion boost from AI by 2035, but conditions apply

India has unveiled a sweeping new roadmap that puts artificial intelligence (AI) at the heart of its growth ambitions, estimating that AI could help lift the country’s economy by as much as $1.7 trillion over the next decade if it is able to scale adoption across industries and transform how research and innovation are done.

The AI for Viksit Bharat report, released on Monday by the government’s public policy think tank NITI Aayog, lays out two clear pathways through which AI can deliver impact: One is by accelerating the use of AI across sectors such as banking, insurance, manufacturing and logistics, which alone could add between $500 and $600 billion to India’s GDP by 2035.

The second is by using AI to reshape the way India does research and development, particularly in high-impact areas such as drug discovery, materials science, software-defined vehicles and product design.

This second route, the report said, could generate an additional $280 to $475 billion, depending on how quickly India acts.

Together, these two levers could help India move from a projected $6.6 trillion economy in 2035 to an $8.3 trillion economy. The jump would mean closing more than one-third of the gap between a low-growth path and the 8% growth rate India is targeting under its Viksit Bharat (Developed India) vision.

“If India is to accelerate its growth to the 8% annual rate required for the realization of Viksit Bharat, we have no option but to significantly raise productivity across the economy and unlock new growth through innovation,” B.V.R. Subrahmanyam, CEO of NITI Aayog said. “Artificial intelligence can be the decisive lever.”

Speaking at the launch in New Delhi, finance minister Nirmala Sitharaman underscored the need for ethical oversight that evolves alongside fast-moving innovation.

“Artificial intelligence is not static. It is a rapidly progressing, real-time dynamic thing. Therefore, all of us will have to be conscious that we don’t sit back on the ethics,” she said. “We need to be clear that regulation has to run the race equally as much as the technology is running it.”

She also stressed the importance of ensuring that AI-based solutions reach every part of India. “This will have to spread across all the districts of the country. Rural and semi-urban India will have to benefit from it,” she said. “We have to build capacity in every district.”

Electronics and IT minister Ashwini Vaishnaw described technology as the foundation of India’s current economic momentum.

“India is very stable, growing in a consistent way. Today, the growth is inclusive. The growth is robust, and it’s driven by technology. Technology is a fundamental base of this growth,” he said.

Tata Sons chairman Natarajan Chandrasekaran, in a recorded message, said, “We are at an inflection point where we have an enormous opportunity to embrace AI to make a huge impact for our country.”

He added, “We should be able to solve basic issues, be it healthcare, education using AI and thereby create huge empowerment opportunities and reduce the inequality that exists today.”

Debjani Ghosh, a distinguished fellow at NITI Aayog and lead author of the roadmap, said, “The time for India to lead the AI revolution at scale is now. With robust policy frameworks, advanced infrastructure,
and collaborative innovation, India can pioneer a new model of growth and societal advancement, ensuring prosperity, resilience, and technological leadership for decades to come.”

The 160-page report identifies several sectors where AI adoption can deliver large productivity gains and generate new forms of value, including in software, agriculture, logistics, financial services, healthcare, education and public services.

It calls for the creation of high-performance computing infrastructure to train and deploy India-specific large language models, a national AI compute grid to democratize access, and the launch of industrial clusters equipped with AI, robotics and digital twin tools.

Among its most ambitious proposals is the idea of setting up “zero prototype labs,” which would allow designers and manufacturers to test and iterate products virtually using AI and simulation-based environments. The report also recommends the creation of public data exchanges to share anonymized, non-personal data between industry and government in a privacy-safe manner.

However, the roadmap does not downplay the risks. It warns that India currently lags in compute infrastructure and has a patchy talent pipeline that could limit its ability to scale foundational research.

It notes that AI adoption remains uneven across the country and that many small and medium businesses lack the digital maturity to implement even basic automation tools. The report also flags concerns around governance and trust, including algorithmic bias, misuse of deepfakes, and uncertainty around how data will be shared or monetized.

The roadmap calls for a coordinated push across government ministries, private sector firms and academia to solve these challenges and suggests that India needs to move fast to capture the next wave of AI opportunity.

It also emphasizes the importance of global partnerships, open standards and the development of sovereign AI capabilities that are tuned to Indian languages, contexts and needs.

To support implementation, NITI Aayog also released a second document, the ‘Frontier Technologies Repository,’ which lists over 100 use-cases and case studies from India and around the world.

The repository is intended to serve as a live platform for entrepreneurs, researchers and policymakers to track how frontier technologies are being deployed and scaled.