AI could add over $500 billion to India’s economy by 2030: Study

Artificial Intelligence (AI) could contribute more than $500 billion to India’s economy by 2030, according to a new study by IBM Institute for Business Value and IndiaAI. The report, From Promise to Power: How AI Is Redefining India’s Economic Future, highlights AI’s growing role in accelerating India’s economic growth, strengthening digital infrastructure, and positioning the country as a major global AI player.

The study found that 80% of Indian business leaders believe AI investments will directly influence the country’s GDP growth. Meanwhile, 73% of executives expect India to emerge as a leading global AI nation by 2030.

However, the report also points to a significant gap between ambition and implementation. Around 72% of surveyed organisations believe they are lagging behind their global peers in AI adoption. Only 15% are currently scaling AI through substantial cross-functional investments, while the remaining 85% are still experimenting through pilot projects.

The findings suggest that India’s AI progress will depend heavily on stronger data systems, cloud infrastructure, governance frameworks, and workforce readiness. Uneven data quality was identified as a major challenge by 57% of respondents, while 77% cited the lack of accessible, affordable, and secure cloud infrastructure as a barrier to AI readiness.

Sovereign and hybrid cloud models are emerging as key priorities for Indian enterprises, particularly in regulated industries and public systems. Nearly 74% of executives said that control over data location is essential, while 70% believe that hybrid architectures can improve data control without significantly increasing costs. The study also found that 62% of respondents see data localisation as a means of strengthening trust in AI systems.

Building a skilled workforce remains another pressing challenge. Currently, only about 30% of employees possess the AI literacy levels businesses require. By 2030, this figure will need to rise to nearly 57%, indicating that India may need an AI-ready talent pool of more than 350 million people.

The report also stresses the importance of stronger governance and collaboration. About 68% of enterprises cited gaps in AI governance as a barrier to scaling, while an equal proportion said India needs a more ecosystem-orientated approach involving industry, government, academia, and technology partners.

Based on surveys of 1,500 Indian executives and a supplementary pulse survey of 405 leaders, the study presents AI as a major opportunity, but one that will require coordinated action to translate potential into long-term economic impact.