TLDR: Generative AI is projected to significantly boost India’s GDP, potentially adding between $359 billion and $438 billion by 2029-30, driven by increased productivity, automation, and integration into various sectors, as highlighted by statements from the Reserve Bank of India and reports from EY.
Generative Artificial Intelligence (GenAI) is set to become a significant catalyst for India’s economic growth, with projections indicating it could add between $359 billion and $438 billion to the nation’s Gross Domestic Product (GDP) by the fiscal year 2029-30. This optimistic forecast was shared by Michael Debabrata Patra, Deputy Governor of the Reserve Bank of India (RBI), during a conference in Jaipur.
Patra underscored the broader impact of GenAI, suggesting it could contribute $7-10 trillion to global GDP over the next three years. Specifically, large language models are estimated to enhance worker productivity by 8 to 36 percent. Complementing this, a report from EY, titled ‘The AIdea of India: 2025,’ projects that GenAI could improve productivity levels in India’s financial services sector by 34-38 percent by 2030, with banking operations potentially seeing gains of up to 46 percent. The EY study also indicates that AI adoption could transform approximately 38 million jobs by 2030, leading to a 2.61 percent productivity boost in the organized sector, with an additional 2.82 percent potential from GenAI adoption in the unorganized sector.
The integration of AI into production processes by Indian firms has seen a notable increase, rising from 8 percent in 2023 to 25 percent in 2024. The Indian government is also actively supporting the semiconductor industry’s development, committing ₹1.25 lakh crore. The EY report highlights that 74 percent of financial firms have initiated GenAI proof-of-concept projects, with 11 percent already moving to production-level deployments. Investment in GenAI is on the rise, with 42 percent of organizations actively allocating budgets towards AI initiatives.
GenAI is being rapidly adopted across various functions, including voice bots, email automation, business intelligence, and workflow automation. Customer service is a primary focus for GenAI implementation, prioritized by 68 percent of firms, followed by operations (47 percent), underwriting (32 percent), sales (26 percent), and IT (21 percent). These investments are already yielding tangible results, with 63 percent of firms reporting improved customer satisfaction and 58 percent noting cost reductions. Pratik Shah, Partner and National Leader – Financial Services, EY India, emphasized that AI-driven solutions are significantly reducing operational costs, sometimes to as little as 1/10th of traditional manual processes.
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Regarding the workforce, the EY report suggests that 24 percent of tasks across industries have the potential for full automation, while another 42 percent can be enhanced by AI, potentially freeing up 8-10 hours per week for knowledge workers. Rajiv Memani, Chairman and CEO, EY India, stressed the critical need for building talent pipelines and prioritizing upskilling initiatives to position India as a global hub for AI-skilled talent. India is already at the forefront of the digital revolution, with its digital economy currently accounting for a tenth of the GDP and projected to reach a fifth by 2026, further bolstered by initiatives like the India Stack that expand financial inclusion and strengthen banking infrastructure.
