Generative artificial intelligence (AI) could contribute a substantial $1.2-1.5 trillion to India’s gross domestic product (GDP) over the next seven years, according to a report by EY titled “The AIdea of India: Generative AI’s potential to accelerate India’s digital transformation”.
Sectors such as business services (including IT, legal, consulting, outsourcing, rental of machinery and equipment and others), financial services, education, retail and healthcare are expected to help drive 69% of the overall benefit for the economy with take up of generative AI, the report said.
According to the report, the full utilization of Gen AI technology across various sectors could potentially add $359-438 billion to India’s GDP in the fiscal year 2029-30 alone. This reflects a noteworthy increase of 5.9-7.2% above the baseline GDP.
The report said 60% of organisations acknowledge the significant influence of generative AI on their businesses.
Despite the optimistic outlook, the report highlights that organisations are still in the early stages of adopting generative AI, with 75% expressing a low to moderate level of readiness to harness its benefits. It said 52% of the organisations are facing primary challenges that include a skills gap, whereas 47% feel that there is an unavailability of clear use cases. On the other hand, 36% of organisations perceive data privacy as a risk associated with generative AI, the report said.
“Organizations are swiftly adopting to AI-first approach to digital transformation, aiming to enhance customer engagement, increase productivity and achieve greater agility in delivering digital capabilities using innovative foundation models and AI-First solutions,” said Mahesh Makhija, technology consulting leader at EY India.
As governments are working around models to regulate AI, EY said adopting a ‘light touch’ approach can create a responsive regulatory environment, balancing innovation and risk management. Clarity on a regulatory framework, establishing regulatory sandboxes, watermarking generative AI content and setting standards for accountability and liability to build trust in the AI systems will be critical, it said in the report.
Implementing measures like enabling access to training data and marketplaces, deployment of generative AI systems as public goods, securing critical digital infrastructure (through rollout of 5G, data centers, access to specialised chips and AI specific compute infrastructure) and access to talent and public funding of R&D will help foster innovation, the report said.