AI is being adopted very fast in India.
India is in a position to take a big financial advantage from Artificial Intelligence (AI) and this can lead to a speed of private investment. This claim has been made by the World Bank's Chief Economist Franziska Ohansorge, the Chief Economist of South Asia.
Ohnsorge said in a media conversation on 4 October, India is in a very good position to take advantage of AI. It is being adopted very fast. People are using it in different ways and investment will also increase with it. However, it will be so big that it is difficult to say that macroeconomic figures are changed.
Ohnsorge said that India's AI Ready Index is much higher than other emerging economies. It is almost of the level of developed countries. He said that the use of AI is being seen most in the BPO sector, where after the launch of Chatgpt, the job posting that required AI skill has doubled. Now these are about 12% of the total jobs, which is three times more than other sectors. Its effect is visible in service exports. After the introduction of CHATGPT, the export of computer services has increased by 30%, while the increase in export of total services has been stable.
After the epidemic, the growth of private investment in India has slowed down, while in many other emerging countries it has increased. However, government investment has increased rapidly. According to Ohnsorge, despite the slow pace, the increase in private investment in India has been more than most developing economies. He also said that FDI is a little weaker than international standards. Apart from services, Ohnsorge said that tariffs and new trade agreements can increase manufacturing in India.
Ohnsorge said that the economies of Mexico and Vietnam have access to about 50% GDP with their business partners. For India, it is currently equal to 12% GDP. If India makes compromises with UK, European Union (EU), Australia, Canada and possibly America, then this access may also increase to 50% GDP. He described the UK Trade Agreement as the most ambitious agreement of the last decade, as it includes not only tariffs, but also services and labor mobility. The World Bank will release its South Asia report on 7 October. Earlier, in the report released in June, India's GDP growth rate was estimated at 6.5% for FY26 and 6.7% for the next financial year.
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