AI can add $1.5 tn to economy

New Delhi, Dec. 17: Generative artificial intelligence (Gen AI) has the potential to add a cumulative $1.2-1.5 trillion to India’s Gross Domestic Product over the next seven years, according to a report by EY India.

The report, titled ‘The Aidea of India: Generative AI’S potential to accelerate India’s digital transformation’, provided insights into the industry’s preparedness and challenges in embracing Gen AI.

Generative AI can potentially add a cumulative $1.2-1.5 trillion to India’s GDP by FY2029-30, as per the report.

“The report forecasts that by fully capitalising Gen AI technology and its applications across sectors, India can potentially add $359-438 billion in FY2029-30 alone, reflecting a 5.9 per cent to 7.2 per cent increase over and above baseline GDP,” it said.

Nearly 69 per cent of the overall impact is expected to be derived from sectors such as business services (including IT, legal, consulting, outsourcing, rental of machinery and equipment, and others), financial services, education, retail, and healthcare.

The anticipated impact entails improvements in workforce productivity, increased operational efficiency, and personalised customer engagement, the report said.

The findings emerged from a comprehensive survey that engaged over 200 C-suite participants, revealing that 60 per cent of organisations acknowledge the significant influence of Gen AI on their businesses.

“However, 75 per cent of them express a low to moderate level of readiness to harness the benefits of Gen AI,” the report pointed out.

The two primary challenges faced by organisations currently are skillsgap (52 per cent) and the availability of unclear use cases (47 per cent), while only 36 per cent organisations see data privacy as the risk of Gen AI.