TLDR: A new report by NITI Aayog, ‘AI for Viksit Bharat: The Opportunity for Accelerated Economic Growth,’ forecasts that accelerated adoption of Artificial Intelligence across various industries could add between $500 billion and $600 billion to India’s GDP by 2035. This significant boost is crucial for bridging nearly half the growth gap required to achieve an $8.3 trillion economy and an 8% annual GDP growth rate, with financial services and manufacturing sectors expected to be major beneficiaries.
New Delhi, September 15, 2025 – India’s economic future could see a transformative uplift through the widespread adoption of Artificial Intelligence, according to a groundbreaking report released today by NITI Aayog. Titled ‘AI for Viksit Bharat: The Opportunity for Accelerated Economic Growth,’ the report projects that AI could contribute a substantial $500 billion to $600 billion to the nation’s Gross Domestic Product (GDP) by 2035.
This projected economic surge is deemed critical for India to bridge nearly half of the growth gap needed to transition from a projected GDP of $6.6 trillion to an ambitious $8.3 trillion by 2035, a key component in realizing the ‘Viksit Bharat’ (Developed India) vision. The report underscores that achieving an 8% annual GDP growth rate necessitates a significant increase in productivity across all economic sectors, with AI identified as the decisive lever for innovation and growth.
NITI Aayog CEO BVR Subrahmanyam emphasized this point, stating, “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 and Artificial Intelligence can be the decisive lever.” He further added, “With a focused and sector-specific approach, industries such as banking and manufacturing can deploy AI today to improve efficiency, service quality, and competitiveness creating momentum for deeper transformation.”
The financial services and manufacturing sectors are anticipated to experience the most profound impact, with AI potentially contributing 20-25% of their sectoral GDP by 2035. Specifically, AI-led productivity and efficiency improvements are expected to unlock an additional $50-55 billion in financial services and $85-100 billion in manufacturing, exceeding current growth projections for these sectors. In financial services, AI is poised to enable hyper-personalized customer experiences, advanced fraud detection, automated compliance, and more inclusive lending through sophisticated anomaly detection and privacy-preserving analytics.
The report outlines several pathways through which AI will drive this growth: accelerated AI adoption across industries could account for 30-35% of the growth step-up, transformation of research and development (R&D) with generative AI could contribute another 20-30%, and innovation in technology services could potentially add 15-20% to this acceleration.
Globally, the report notes that AI adoption is expected to add an astounding $17-26 trillion to the world economy over the next decade. India is uniquely positioned to capture 10-15% of this global AI value, thanks to its large STEM workforce, expanding R&D ecosystem, and growing digital and technology capabilities.
Also Read:
- India’s AI Crossroads: Navigating the Economic Impact of Agentic Systems
- Artificial Intelligence Poised for Transformative Growth, Approaching Human-Level Cognition by 2030, McKinsey Reports
While the report highlights immense opportunities, it also addresses the potential challenges, particularly concerning employment. Projections indicate that while AI will undoubtedly create numerous new roles, it will also displace many existing jobs, especially in clerical, routine, and low-skill categories. This necessitates proactive strategies for workforce reskilling and upskilling to navigate the evolving job market landscape.
