The AI Opportunity.

AI is enabling a new era of innovation.

AI is a once-in-a-generation opportunity to catalyse faster economic growth, boost social inclusion and address many of society’s most important challenges. In the last few years, we have seen rapid improvements in the capabilities of AI, spurred on by the development of the transformer model architecture by Google researchers in 2017.

One of the most promising opportunities from AI is its potential to catalyse innovation:

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Accelerating science and research.

New models like Google DeepMind’s AlphaFold are speeding up the process of fundamental science, while more general AI tools enable researchers to work faster. In total, we estimate that the AI-driven acceleration of R&D could create an extra ₹11 lakh crore (US$130 billion) in additional growth for the Indian economy.

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Transforming how businesses and workers work.

AI will allow both businesses and workers to change how they work: saving time, learning new skills and focusing on creative tasks. This in turn is set to increase economic productivity, and ultimately wages for ordinary workers. In our research, we found that AI could help power the next stage of India’s growth, boosting the economy by ₹21 lakh crore (US$250 billion), a 7% increase in Gross Value Added (GVA).

AI-focused start-ups

AI is poised to enable a new generation of start-ups and entrepreneurs. Much like the internet or the smartphone, it will spur the development of a new frontier of products and services, fostering more deep tech research and applications that explore and define the next frontier of AI. In 2025, there were already over 6,000 AI-focused start-ups in India.¹

India has some of the highest long-term potential from AI.

India has the highest number of mobile AI users in the world,² and a Google-Ipsos survey found that Indians have the fourth highest level of optimism when it comes to the possibilities from AI.³ This optimism is supported by numerous indicators, which suggest that India could soon become one of the world’s top three leaders in AI.⁴

In this report, we look at some of the specific opportunities AI creates for India, including:

Building on existing Indian economic and scientific strengths. AI can boost productivity in core sectors like services and agriculture, while creating new opportunities in sectors like manufacturing.

Supporting inclusive growth. AI can help India capitalise on its large youth population to drive significant economic growth.

Pioneering AI initiatives in the Global South. Building on its existing strengths shown by the Digital Public Infrastructure (DPI) model, India can develop, optimise, and export AI solutions better suited to the Global South.

Share of the population who say they are excited about the possibilities of AI.

Source: Our Life with AI, Google x Ipsos, January 2025

AI can help India address structural economic challenges.

Challenge.

AI Solution.

Slowing productivity.

While India’s economy has seen rapid growth since the liberalisation of the 1990s, a heavy reliance on agricultural employment has limited labour productivity gains. Unlike other Asian economies that achieved faster growth through manufacturing, India’s structural transformation has been slower. However, the government is notably looking to strengthen growing sectors such as manufacturing and digital technologies.

Across the economy, AI can help India
upgrade the productivity of its key sectors.

AI can help India with its transformation, building on its existing strengths in services exports, renovating its manufacturing industry, and boosting other sectors like public administration, defence, and retail.

Ensuring inclusive growth.

India faces high levels of youth unemployment⁵ and low levels of female labour participation.⁶ There is a vacuum of 150 million skilled workers, and half the existing workforce also requires reskilling.⁷

AI can help people learn new skills and expand their career opportunities.

In early studies, we have already seen AI’s potential to boost the skills base of workers, helping them catch up with the performance of the best workers in their environments.

Expanding access to health and education.

India has some of the world’s best hospitals and universities, but significant proportions of the population still struggle to get access to adequate education and health services, leading to avoidable illness and lower levels of human capital.

AI can help expand access to tutoring or medical diagnoses.

While not a substitute for human workers, AI can help triage resources for people who wouldn’t otherwise have access to vital support.

How Google is contributing to India.

For over a decade, Google has been investing in AI to advance its mission to organise the world’s information and make it universally accessible and useful. From key language understanding techniques, to the Transformer architecture underlying today’s generative AI revolution, Google researchers have been behind a significant number of defining AI breakthroughs. Today, Google is expanding access to AI for billions in Asia-Pacific through products like Maps, Search, Android, Gemini and NotebookLM while helping businesses be more productive and connect with new customers. This value adds up. In 2024, Google Search, Google Maps, Google Play, Google Drive, and YouTube helped provide ₹42 lakh crore (US$500 billion) of additional consumer benefits for Indians. This is equivalent to a monthly benefit of ₹6,400 (US$76) for the average online adult, which is the result of easier access to information, increased productivity and a variety of entertainment and enrichment benefits. Google and Android’s products are the gateway to the world’s information for millions of Indians. We estimate that Android’s increased affordability has allowed an additional 37 million people in the country to access the Internet, while 69% of people in India say they first started using AI through an app on their Android device. Google acts as a crucial economic catalyst: connecting businesses with customers worldwide, enhancing business productivity and giving Indian creators and developers new platforms through which they can reach the world. In 2024, Google Search, Google Ads, Google AdSense, Google Play, Google Cloud, and Google Pay helped provide ₹1.2 lakh crore (US$ 15 billion) of economic activity for businesses.