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Generative AI could boost India's GDP by $1.5 trillion in 7 years
Multiple sectors are projected to benefit from Gen AI but majority of the positive impact is expected to be derived from business services
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Generative AI (artificial intelligence) could add US $1.2 trillion to $1.5 trillion to India’s GDP by FY2030, according to a new report published by Ernst & Young India.
The findings were published in a study titled ‘The AIdea of India: Generative AI’s Potential to Accelerate India’s Digital Transformation’ released on December 17. It says that Gen AI tech could contribute $359-438 billion to the country’s GDP in the financial year 2029-30, accounting for an additional 5.9 percent to 7.2 percent of GDP.
The report states that Gen AI’s positive impact is foreseen across sectors but a huge proportion of the overall impact, 69 pe cent, is expected to be derived from business services. These include the IT sector, legal services, consulting, healthcare, etc. If India succeeds in harnessing the power of Gen AI, and the trillion-dollar projected impact becomes a reality, it would translate in an additional CAGR of 0.9 per cent to 1.1 per cent for the country’s economy.
“While the global industry will benefit from Gen AI, India has the chance to gain disproportionately if it can capitalize on building expertise in Gen AI quickly. If India takes the first-mover advantage in the following areas, it can create a huge impact,” the report projects.
The IT sector is projected to gain significantly from the development of Gen AI platforms. The expected impact encompasses improvements in employee productivity, enhanced operational efficiency and personalized customer experiences.
The study surveyed over 200 C-suite executives across India working across technology, media and entertainment, financial services, government, health, pharma and life sciences, retail, and manufacturing.
Three in five respondents, representing about 60 percent of the group, acknowledged Gen AI’s significant impact on their business, while 18 percent of respondents admitted it had a low impact on their business. Key challenges identified by organizations in adopting Gen AI include skills-gap (52 percent), unclear use cases (47 percent), and inadequate focus on Gen AI initiatives (33 percent).
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