India is rapidly emerging as a global leader in artificial intelligence readiness among developing nations, with private AI investment tripling and its robust digital public infrastructure positioning it to harness this transformative technology for economic growth and improved public services.
Illustration: Dominic Xavier/Rediff
Key Points
- India is recognised as one of the top 10 leading emerging-market performers in AI readiness, poised to leverage its large technical workforce and digital public infrastructure.
- Private investment in AI in India has seen a significant surge, more than tripling from USD 1.2 billion in 2024 to USD 4.1 billion in 2025.
- The World Bank report highlights the potential of AI as a powerful tool for India to boost productivity and enhance public services.
- To fully harness AI’s benefits, India needs cross-cutting policy measures focusing on infrastructure, business environment, access to AI, and labour capacity.
- South Asia, projected to grow at 6.9 per cent in 2026, can significantly benefit from AI adoption, especially through ‘small AI’ applications tailored for local conditions.
India is among the top 10 leading emerging-market performers in artificial intelligence (AI) readiness and is well positioned to harness the technology, helped by its large technical workforce, globally integrated IT sector and digital public infrastructure, the World Bank said on Tuesday.
In its latest report titled ‘India and Artificial Intelligence: Seizing the Development Opportunity’, the World Bank said private investment in AI in India more than tripled to USD 4.1 billion in 2025 from USD 1.2 billion in 2024.
AI Investment and Workforce Growth
At the same time, the number of professionals employed by Global Capability Centres (GCCs) rose to 2.36 million in 2025 from 1.9 million a year ago, it said.
The report, however, noted that the long-term economic and labour market impact of AI remains uncertain.
It called for cross-cutting policy measures to deepen AI-enabling infrastructure, improve the business environment, broaden access to AI and enhance labour capacity so that the benefits of the technology are widely shared.
“India is one of the top 10 leading emerging-market performers on AI readiness,” said Paul Procee, World Bank Acting Country Director for India.
Harnessing AI for Development
“Harnessing AI as a development tool – not just a technology – could be one of the most powerful levers India has to boost productivity and improve public services,” he said.
The World Bank Group is also investing through AgriConnect in ‘small AI’ targeted and locally adapted tools aimed at ensuring that the benefits of AI reach a wider section of the population while supporting workers through the transition, he said.
The India Development Update is a companion to the World Bank Group’s South Asia Economic Update, which examines economic developments and prospects in the region.
The latest South Asia Economic Update projects that South Asia will grow 6.9 per cent in 2026, retaining its position as the world’s fastest-growing region, the report said.
Policy Recommendations for AI Adoption
For most of South Asia, the biggest gains from AI are likely to come from adopting and adapting the technology to local conditions, including through small AI applications suited to low-resource settings, it said.
The report said complementary measures would also be needed to reduce barriers to AI adoption by small firms, promote local AI innovation and establish a clear regulatory framework that reduces uncertainty while safeguarding data security and privacy.
“The adoption of AI has the potential to transform South Asia’s development trajectory by boosting labour productivity, expanding export opportunities, and improving public service delivery,” said Franziska Ohnsorge, World Bank Group Chief Economist for Asia.
“But to reap these benefits, governments need to address the foundational gaps that hold back adoption,” she said.
The Update recommended strengthening workforce skills, creating a more business-enabling environment and improving physical as well as digital infrastructure.
