Generative AI Set to Boost India's GDP by $1.5 Trillion by FY30: EY Report
Discover how Generative AI is poised to make a significant impact on India's economy, contributing $1.2-1.5 trillion to the GDP by 2030, according to EY's latest report, "The AIdea of India: Generative AI’s potential to accelerate India’s digital transformation." Explore the sectors leading this transformation and the expected benefits in employee productivity, operational efficiency, and personalized customer engagement.
Generative artificial intelligence (AI) is poised to become a key driver of India's economic growth, with an expected contribution of $1.2-1.5 trillion to the country's gross domestic product (GDP) by the fiscal year 2030, according to a recent report by EY titled "The AIdea of India: Generative AI’s potential to accelerate India’s digital transformation."
Driving Sectors and Expected Impact
Sectors such as business services, financial services, education, retail, and healthcare are anticipated to lead the charge, contributing to 69% of the overall economic benefit. The report highlights potential improvements in employee productivity, enhanced operational efficiency, and personalized customer engagement as key factors driving this growth.
GDP Projection and Organizational Readiness
The full utilization of Generative AI technology across various sectors could potentially add $359-438 billion to India's GDP in the fiscal year 2029-30 alone, reflecting a significant increase of 5.9-7.2% above the baseline GDP. However, the report notes that organizations are still in the early stages of adopting generative AI, with 75% expressing a low to moderate level of readiness to harness its benefits.
Challenges and Outlook
Challenges faced by organizations include a skills gap (52%), a perceived lack of clear use cases (47%), and concerns about data privacy (36%). Despite these challenges, 60% of organizations acknowledge the significant influence of generative AI on their businesses. Mahesh Makhija, technology consulting leader at EY India, emphasizes that organizations are swiftly adopting an AI-first approach to digital transformation.
Regulatory Environment and Recommendations
As governments work on regulating AI, EY suggests adopting a 'light touch' approach to create a responsive regulatory environment. Clarity on a regulatory framework, establishing regulatory sandboxes, watermarking generative AI content, and setting standards for accountability and liability are crucial for building trust in AI systems.
Foster Innovation and Future Measures
The report recommends measures such as enabling access to training data and marketplaces, deploying generative AI systems as public goods, securing critical digital infrastructure, and ensuring access to talent and public funding for R&D to foster innovation in the generative AI landscape.
In conclusion, while the outlook for Generative AI's impact on India's GDP is optimistic, addressing challenges and implementing strategic measures will be essential for realizing its full potential in the coming years.
