India’s digital transformation has largely been a story of access. From smartphones and affordable internet connectivity to digital payments and digital public infrastructure, the first wave of digitalisation brought millions of Indians into the connected economy and fundamentally changed how people access information, services, and opportunities. The next chapter, however, will require a different kind of readiness. As Artificial Intelligence becomes increasingly embedded in education, workplaces, and everyday digital experiences, India’s next digital leap will be defined not simply by access to AI, but by people’s ability to understand it, question it and apply it meaningfully.
According to the IAMAI-Kantar report published in 2026, India currently has approximately 958 million active users of the Internet, with more than 57% of them living in rural regions. The same report states that 44% of internet users have been exposed to AI-based solutions such as chatbots, voice and image search systems and filters, which means that AI is increasingly getting embedded into our daily lives, even if users themselves don’t even notice this.
India is already seeing rapid AI adoption. According to the PIB report, 87% of Indian enterprises are actively using AI solutions, while India’s relative AI skill penetration is 2.45 times the global average. The IndiaAI Mission, with an approved outlay of ₹10,371.92 crore, further reflects the country’s ambition to build the infrastructure, capabilities, and ecosystem needed to participate meaningfully in the global AI economy.
Yet, adoption and AI literacy are not the same thing. Being able to access or interact with an AI tool does not necessarily mean having the ability to understand how it works, assess the quality of its outputs, recognise its limitations or apply it effectively to solve a problem.
Research carried out in 2026 illustrates this gap admirably. An upGrad survey found that of the 2,075 respondents who completed the survey, 94% used AI, but only 20% had created an AI-based automation, agent, or application. Just 26% had connected AI to other-purpose tools through APIs. While it is true that the sample studied represents upGrad learners only, it shows that usage of AI has become common, but the ability to create or use AI products is still limited.
India’s diversity makes this AI literacy challenge particularly complex. A technology professional in Bengaluru, a student in a Tier-2 city, a small business owner, an enterprise employee and a young learner in a rural school may all encounter AI differently. Their access to devices, quality of connectivity, educational opportunities, language familiarity and exposure to digital tools can vary significantly.
This creates multiple layers to the AI literacy gap. There is an access gap, where people may have unequal access to devices, connectivity and AI-enabled technologies. There is an understanding gap, where users may not have the knowledge to assess AI outputs, identify limitations or make informed decisions about its use. And there is an application gap, where people may use AI for basic tasks but lack opportunities to experiment with it, connect it to real-world challenges and create solutions of their own.
Bridging these gaps will require moving beyond the idea of AI literacy as formal training alone. People learn technology most effectively when they have the opportunity to explore it, experiment with it, make mistakes, understand the outcomes and apply what they learn to real-world problems. This is particularly important for young learners, for whom hands-on experiences can transform curiosity into experimentation, and experimentation into problem-solving and creation.
This is also the thinking behind initiatives such as ASUS’ recently inaugurated Tinkering Lab, a dedicated space designed to give students opportunities to develop hands-on skills across electronics, coding, IoT and robotics. Such environments demonstrate how access to technology can become more meaningful when learners are encouraged not just to use technology, but to question, build, test and create with it.
The same principle extends beyond classrooms. In workplaces, organisations may have access to increasingly sophisticated AI tools, but meaningful adoption depends on whether employees have the confidence and capabilities to integrate these tools into their workflows. Autodesk’s AI Pulse Report 2026 found that 91% of Indian organizations which were surveyed have increased their investments in AI during the past year. However, 49% reported a lack of required capabilities for effective use of AI.
The challenge is also present in workplaces. The 2026 State of AI in the Enterprise report by Deloitte showed that 40% of Indian respondents reported significant AI use as opposed to around 28% internationally. At the same time, differences in knowledge and capability highlight the need for continued upskilling, reskilling and learning as AI becomes more deeply integrated into organisational workflows.
This means that investments in AI infrastructure must be accompanied by investments in people and the broader ecosystem required to use this technology effectively. The responsibility of technology companies lies not only in making AI available, but also in contributing to the devices, learning opportunities and initiatives that can help people engage with it confidently and responsibly.
The next significant progression in digital technology for India will involve more than simply giving people access to AI technology. Instead, it will involve making them understand its possibilities, shortcomings and its ethical deployment to address real-world issues. The first wave of digital technology brought about a transformation in India from access to engagement, while the second wave is expected to further take India from engagement to creation.
AI literacy can serve as a link between these two stages. If India can create an environment of curiosity, experimentation and critical thinking, it can help ensure that the benefits of AI extend across different communities, industries and generations. The digital future for India will depend not so much on increasing intelligence of technology, but on its wise deployment by Indian people.
India’s next digital era will not be defined only by how intelligent its technologies become, but by how effectively its people understand and apply them. Just as digital literacy enabled millions to participate in the digital economy, AI literacy can empower students, entrepreneurs, creators and professionals to move from being passive consumers of technology to active problem-solvers and creators. By investing in skills, infrastructure and opportunities to experiment today, India can build an AI-driven future that is not only innovative, but inclusive and human-centred.
(The views expressed are personal)
This article is authored by Eric Ou, South Asia Regional Director, ASUS.