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India's AI Boom to Add $1.7 Trillion to Economy by 2035, Says Report

A KPMG report launched at Davos forecasts that India's adoption of artificial intelligence will generate $1.7 trillion in economic value by 2035. This growth is supported by major investments in semiconductor manufacturing, including six approved fabrication plants. The report highlights widespread AI integration, with 89% of new startups in 2024 leveraging the technology and over 6 million people employed in the tech ecosystem. India's digital infrastructure and sectoral adoption in healthcare and agriculture are key drivers of this transformative growth.

Key Points: India's AI Adoption to Generate $1.7 Trillion by 2035

  • $1.7T economic value by 2035
  • 6 semiconductor fabs approved
  • 89% of 2024 startups used AI
  • Over 6M employed in tech/AI
2 min read

India's AI adoption to generate $1.7 trillion in economic value by 2035: Report

KPMG report projects AI will add $1.7T to India's economy by 2035, driven by semiconductor investments and rapid tech adoption.

"India's transformation is remarkable... it's about building trust and shaping the future of global collaboration. - Bill Thomas"

New Delhi, Jan 22

As India's semiconductor industry scales up, its adoption of artificial intelligence is projected to generate $1.7 trillion in economic value by 2035 and reshape industries across the economy, a new report has said.

A KPMG report, launched at the World Economic Forum 2026 in Davos, said that India's responsible AI scaling gained support from robust data governance frameworks, sectoral adoption in healthcare, agriculture, education, and defence, and the creation of the IndiaAI Safety Institute.

"India's emergence as a pivotal force in global trade, technology, and sustainability is underpinned by bold investments in semiconductor manufacturing and rapid adoption of artificial intelligence (AI)," the report said.

The business advisory firm highlighted India's achievement in the sector, such as approval of six semiconductor fabrication plants with an outlay of $1.3 billion and allocation of $2.2 billion for deep‑tech research and development.

Government-supported flagship initiatives such as the India Semiconductor Mission and Semicon India are accelerating chip‑making infrastructure, testing and advanced packaging, the report said.

The report highlighted over 38,000 GPUs deployed under the IndiaAI Mission, over 6 million people employed in the technology and AI ecosystem and that 89 per cent of new startups in 2024 leveraged AI, the report said.

"India's transformation is remarkable. What we're seeing is more than economic growth, it's about building trust and shaping the future of global collaboration. From advanced manufacturing and digital infrastructure to clean energy and AI, India is building an ecosystem that drives resilience and innovation at scale," said Bill Thomas, Global Chairman and CEO, KPMG International.

"The country's ability to turn ambition into action is what stands out, delivering real progress that opens new opportunities for businesses worldwide," Thomas added.

India's leadership in digital infrastructure, sustainability, and advanced technologies like semiconductors and AI sets new benchmarks, according to Yezdi Nagporewalla, Chief Executive Officer, KPMG in India.

The PLI schemes have attracted $22.2 billion, generating $207.9 billion in incremental production and creating 1.26 million jobs, and India reached a 50 per cent non‑fossil fuel share in installed capacity by June 2025, the report noted.

- IANS

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Reader Comments

S
Sarah B
The numbers are impressive, especially 6 million employed in the AI ecosystem. But I hope this growth is inclusive. We need to ensure skilling programs reach Tier 2 and 3 cities, not just the metros. The real test is whether this value creation benefits the common man.
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Vikram M
Building the IndiaAI Safety Institute is a crucial and welcome step. As we scale, we must have strong ethical frameworks in place. We don't want to repeat the mistakes seen elsewhere with biased algorithms. Responsible AI is the only sustainable path forward.
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Priya S
$1.7 trillion sounds amazing, but these reports often paint a rosy picture. The PLI scheme results are promising, but execution on the ground for semiconductor fabs has been slower than expected. Let's hope the momentum is real this time. 🤞
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Rohit P
The link between semiconductors and AI is key. We can't just be consumers of AI tech built on foreign chips. Becoming a manufacturing hub for chips is strategic independence. Jai Hind!
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Kavya N
As a software engineer, this is exciting! 89% of new startups using AI shows where the innovation is. The GPU access through IndiaAI Mission will be a game-changer for researchers and small companies. The future is here!
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Michael C

We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.

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