A recent report by EY India suggests that Generative AI (Gen AI) could contribute a staggering $1.2-1.5 trillion to India’s Gross Domestic Product (GDP) by the fiscal year 2030. This transformative potential highlights the crucial role Gen AI can play in accelerating India’s digital transformation across various sectors.
The AI Revolution
Generative AI, often abbreviated as Gen AI, is poised to be a game-changer for India’s economy. The report underscores that by fully harnessing Gen AI technology and its applications, India could witness an unprecedented increase of $359-438 billion in FY30 alone. This reflects a remarkable 5.9 to 7.2 percent surge over the baseline GDP.
Sectors Driving the Gen AI Impact
A significant 69 percent of the projected impact is anticipated to emanate from key sectors such as business services, financial services, education, retail, and healthcare. This impact is not just monetary; it encompasses improvements in employee productivity, enhanced operational efficiency, and personalized customer engagement. The ripple effect of Gen AI is poised to reshape the landscape of these industries.
Embracing an AI-First Approach to Transformation
Mahesh Makhija, Technology Consulting Leader at EY India, emphasizes that organizations are rapidly adopting an AI-first approach to digital transformation. This strategic shift aims to enhance customer engagement, increase productivity, and achieve greater agility in delivering digital capabilities through innovative foundation models and AI-first solutions.
While the potential of Gen AI is immense, the report suggests that India needs to ramp up its efforts, particularly in terms of increased government involvement in Gen AI’s development and deployment. Establishing a critical computing ecosystem for continuous innovation is identified as crucial for India to stay competitive in this evolving landscape.
What are the primary challenges faced by organizations in adopting Gen AI?
According to the report, the two main challenges are a skills gap (52 percent) and unclear use cases (47 percent). Only 36 percent of organizations perceive data privacy as a risk associated with Gen AI.
Why is the development of a Gen AI strategy deemed essential?
The report highlights that 75 percent of organizations identify customer engagement as the most crucial aspect influenced by Gen AI. A well-defined Gen AI strategy becomes essential to capitalize on its potential and drive economic growth.
How are governments worldwide actively promoting Gen AI?
Governments are taking measures such as enabling access to training data and marketplaces, deploying Gen AI systems as public goods, securing critical digital infrastructure (including 5G rollout, data centers, and AI-specific compute infrastructure), and supporting talent and R&D through public funding, as per the report’s recommendations.