AI likely to contribute $550 billion to India by 2035 across sectors

The report noted that India could emerge as a global example of how developing economies can use AI in a way that is both transformative and fair

Artificial Intelligence (AI) could add around $550 billion to India’s economy by 2035, according to a report by consulting firm PwC. The report says AI will play a major role in driving growth across key sectors such as agriculture, healthcare, energy, education, and manufacturing.

 

The report, titled AI Edge for Viksit Bharat, was launched last week at the World Economic Forum in Davos. It estimates that AI alone could contribute nearly $550 billion to five priority sectors by 2035 in nominal terms. It noted that India could emerge as a global example of how developing economies can use AI in a way that is both transformative and fair.

 

What does the report say?

Agriculture remains the backbone of India’s economy, the report said, adding that to meet the goals of Viksit Bharat, the sector’s gross value added will need to rise sharply from about $637 billion in FY25 to nearly $2,359 billion by FY47.

 

However, the sector faces serious productivity challenges. Around 86 per cent of Indian farmers are small or marginal farmers, owning less than one hectare of land. PwC stressed that faster adoption of digital tools, especially AI, is essential to improve productivity and ensure long-term sustainability in farming.

 

The energy sector was described as a key enabler for growth in both manufacturing and agriculture. PwC said an efficient and productive energy system is critical for achieving Viksit Bharat goals, as it supports industrial expansion and modern farming practices.

 

The report said expanding tertiary and super-speciality care through medical colleges linked to district hospitals can create high-skill jobs and help retain medical talent. It can also attract medical tourism and make advanced treatment available beyond big cities, with AI helping to improve diagnosis and efficiency.

 

In manufacturing, PwC highlighted sectors such as semiconductors, solar panels, telecommunications, and electronics. The report said faster growth in these areas, supported by AI and digital technologies, can strengthen Aatmanirbhar Bharat and deepen India’s role in global value chains.

 

It also noted that AI can help improve education quality, governance, and skill alignment, helping students become more employable.

Outcomes of large-scale AI adoption

The report also outlined the AI Edge framework, which lists five outcomes India can expect from large-scale AI adoption. These include operational excellence, sustainability, good governance, resilience, and financial discipline.

 

In its report, PwC introduced the 3A2I framework, which is designed to make AI a connected system for India’s development. The framework focuses on building access to data, infrastructure, and skills, creating acceptance through trust, transparency, and ethical safeguards, and enabling assimilation by embedding AI into real-world processes.

 

Once this base is set, the framework supports large-scale implementation and long-term institutionalisation through strong governance and continuous learning.