According to a NITI Aayog report released on Monday, faster AI adoption across industries could boost India’s GDP by $500–600 billion by 2035, driven by higher productivity and workforce efficiency.

The report, titled “AI for Viksit Bharat: The Opportunity for Accelerated Economic Growth,” also noted that AI integration across global sectors over the next 10 years is projected to add $17–26 trillion to the world economy.

“India’s combination of a large STEM workforce, expanding R&D ecosystem, and growing digital and technology capabilities position the country to participate in this transformation, with the potential to capture 10-15% of global AI value,” it said.

NITI Aayog highlighted that although AI will generate numerous new employment opportunities, it will also lead to the displacement of several existing jobs, especially in clerical, repetitive, and low-skilled roles.

“Accelerated adoption of AI across industries can contribute $500 billion -$600 billion over and above India’s current GDP growth by 2035, driven by increased productivity and efficiency in the workforce,” the report said.

The report indicated that sectors like financial services and manufacturing are likely to experience the greatest impact, with AI potentially accounting for 20–25% of their sectoral GDP by 2035.

In financial services alone, AI-driven gains in productivity and efficiency could contribute an additional $50–55 billion beyond the sector’s projected growth by 2035.

“AI could power automated compliance, fraud detection, and risk management through advanced anomaly detection techniques and privacy-preserving analytics such as secure multi-party computation and federated learning,” the report said.

The report stated that AI-powered systems have the potential to transform credit assessment, loan recovery, and portfolio management. By utilizing alternative data sources, banks can enhance the accuracy, adaptability, and inclusiveness of their lending decisions.

It further observed that India’s immediate AI adoption opportunity lies across industries to boost productivity and efficiency, which could help close nearly 30–35% of the existing gap.

“These effects are expected to materialize across both domestic consumption and export markets,” it said.

The report further highlighted that advancements in technology services could strengthen India’s position as a global tech leader, contributing an additional 15–20% uplift through the creation of higher-value solutions and innovative business models, thereby boosting India’s global competitiveness.

In the manufacturing sector, AI-driven improvements in productivity and efficiency will generate $85–100 billion beyond the sector’s projected growth by 2035.

At the current annual growth rate of 5.7%, India’s GDP will reach $6.6 trillion by 2035. However, under the government’s Viksit Bharat vision, which targets an aspirational 8% growth rate, GDP could rise to $8.3 trillion—an increase of $1.7 trillion compared with the existing trajectory.

NITI Aayog CEO BVR Subrahmanyam in his foreword said,”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. Artificial Intelligence can be the decisive lever.”

Subrahmanyam emphasized that with a targeted, sector-specific strategy, industries like banking and manufacturing can begin AI adoption immediately to enhance efficiency, elevate service quality, and strengthen competitiveness—laying the foundation for broader, long-term transformation.

“At the same time, India must nurture frontier innovation, from Al-enabled drug discovery to software-defined vehicles, building the next engines of growth.

The path to 8% growth runs through decisive Al adoption and innovation, he added.