India is at the cusp of the next immense digital transformation by leveraging the power of artificial intelligence (AI) to foster extensive economic growth and advancement. Given its expansive and diverse economy, along with its substantial population, India possesses a distinctive opportunity to employ AI for the betterment of businesses, industries, and society as a whole. Investment in AI has been steadily increasing since 2011 and is projected to make a significant contribution to the economy by 2035. The growth of AI start-ups in India has been remarkable since 2011, and in the FICCI-Access Partnerships report, an impressive 88% of surveyed companies have intentions to invest in AI-related technologies. Notably, India secured the sixth position in AI investments between 2013 and 2022, accumulating a total of USD 7.73 billion over the past decade, with approximately 40% of that amount received in 2022.
Recognizing the potential opportunities and outlook for businesses, the Indian government established the National Program for AI in 2018. The Program’s aim is to craft a national strategy for responsible AI adoption, as outlined in the National Strategy for Artificial Intelligence report, with an #AIforAll approach ensuring inclusive AI-enabled economic growth. Alongside the development of India’s AI national strategy, the government announced in its 2023 Finance Budget that it would set up three Centers of Excellence in AI as part of its “Make AI for India” and “Make AI Work for India” initiatives. The centers will be set up in prominent educational institutions in the country and will see collaboration between these institutions and leading industries to research and develop practical AI applications in agriculture, health, and sustainable cities.
In view of the same, leaders in the technology industry have observed that AI has reached a critical turning point. This is evident as powerful new models, such as generative AI, are being introduced, and innovative applications are progressively permeating various aspects of society, captivating the imagination of consumers. The emergence of generative AI has unlocked a multitude of possibilities, particularly in tasks that demand creativity, curiosity, and a fresh perspective on information. Consequently, the potential of generative AI lies in its capacity to empower individuals to enhance their creativity, effectiveness, and efficiency in their professional endeavours.
India has an opportunity to better position its businesses and workers to take advantage of generative AI, as well as manage challenges emerging from it. Policymakers may need to re-examine the country’s economy-wide approach to generative AI, and consider how to prepare its workforce and policy environment for generative AI, including answering the question “What is required to achieve the aspirations of a brighter future enabled by generative AI?” This report seeks to contribute to this discussion by providing early insights and raising awareness of the economic opportunities that generative AI can create, and what it means for local industries and workforce readiness.
Further, some discourse surrounding generative AI has sparked concerns about its potential impact on employment, and such concerns are understandable given historical instances where the introduction of new productive technologies have altered labour utilization, such as during the industrial revolution and the advent of the Internet. However, based on the findings of this study, it is likely that the adoption of generative AI will result in changes to how jobs are performed. To fully realize this potential, workers, employers, and governing bodies will need to make deliberate choices to maximize the benefits of this new technology. Similar to the transition from horses to cars, this process will require authorities to develop infrastructure such as roads, and individuals to acquire the necessary skills, like learning to drive.
Policymakers in India have already acknowledged that AI will influence existing jobs, and therefore there needs to be changes to both nature of jobs as well as benchmarks for technological aptitude to fully take advantage of these changes. This means updating existing skilling and reskilling policies to ensure the workforce is ready to embrace these developments. The Ministry of Electronics and IT (MeitY) has already announced plans to draft a new roadmap to develop India’s AI ecosystem focused on its domestic IndiaAI Platform to promote local startups, research, and innovation. This includes better governance, development, and importantly a focus on developing skilled professionals, with the goal of creating one million world-class skilled AI professionals by 2025.
In order to fully embrace the vast economic potential of generative AI, a collaborative endeavour must be undertaken to ensure its widespread integration. Such an undertaking necessitates the active involvement of various stakeholders, including government bodies, industries, academic institutions, civil society organizations, and the wider community. It is imperative that these stakeholders come together to explore optimal ways of harnessing the power of generative AI while effectively addressing and mitigating associated challenges.