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AI Use Could Add $450-500 Bn To India’s GDP by 2025: NASSCOM

The sectors of BFSI, CPG & Retail, Healthcare, and Industrials & Automotive are likely to contribute about 60 per cent on this net new value add to India’s GDP, according to the report

A report by NASSCOM on AI Adoption says that AI use in the country could potentially add USD 450-500 billion to India’s GDP by 2025. The sectors of BFSI, CPG & Retail, Healthcare, and Industrials & Automotive are likely to contribute about 60 per cent of this net new value add to India’s GDP, according to the report.

NASSCOM has collaborated with Microsoft, Capgemini, Ernst & Young and EXL to bring the NASSCOM AI Adoption Index. The assessment framework tracks and measures the degree of AI penetration in India and forecasts the future for AI in the country.

The report said that investments in Artificial Intelligence in India is still a small percentage (~1.5 per cent) of the total worldwide spend. But India’s rapid strides in the last few years are positive signs and shows AI’s potential to contribute to the country’s GDP, the report surmised.

“India starts from a lower base compared to its global peers, and though the current rate of AI investments in India is growing at a CAGR of 30.8 per cent, and poised to reach USD 881 million. by 2023, it will still represent just 2.5 per cent of the global AI investments of USD 340 billion. This is in contrast with India’s leadership in the rate of AI skill penetration—3.09 times the global average between 2015 to 2021 and the rate of private investments in AI that is 4th highest globally”, noted the report.

The report suggests that use of AI has accelerated in healthcare. In the near future, the use of AI in improving healthcare systems can generate USD 25 billion of economic value add for India by FY 2026. 

“The road to USD 500 billion value-add will propel India to the Expert-Evangelist stages rather rapidly. Fixing technology and data silos, lack of AI expertise, high lab-to-market time, and a culture of inadequate assessment is crucial to greater AI adoption”, the NASSCOM report concluded.


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