The economic factors affecting artificial intelligence include labor automation, innovation, and new competition. The impact of artificial intelligence on the Indian economy is significant and is expected to continue to grow in the coming years.

This study estimates that generative AI can potentially unlock USD621 billion of productive capacity in India, equivalent to close to one-fifth of GDP in 2021. India has an opportunity to better position its businesses and workers to unlock the potential of generative AI, as well as manage emerging risks.

Dr Chuck A Arize thank you for your contribution to the discussion

India is poised to harness the potential of artificial intelligence (AI) to drive economic growth and development at scale. With its vast and diverse economy, coupled with a large population, India has a unique opportunity to leverage AI to deliver benefits to businesses, industries, and society. AI has the potential to significantly boost the Indian economy by improving productivity, reducing costs and creating opportunities for innovation and growth, says Anurag Sanghai, principal solutions architect at Intellicus Technologies. It can increase the efficiency with which things are done and vastly improve the decision-making process by analyzing large amounts of data. It can also spawn the creation of new products and services, markets and industries, thereby boosting consumer demand and generating new revenue streams. At all levels of education, AI will likely be transformative. Students will receive educational content and trainings tailored to their specific needs. AI will also determine optimal educational strategies based on students' individual learning styles. By 2028, the education system could be barely recognizable. A number of factors, including labor automation, innovation, and new competition, affect AI-driven productivity growth. Micro factors, such as the pace of adoption of AI, and macro factors, such as the global connectedness or labor-market structure of a country, both contribute to the size of the impact. The growth co-efficient suggests that on average a unit increase in AI intensity, measured as the ratio of AI to total sales, can return USD 67.25 billion or 2.5% of GDP to the Indian economy in the immediate term. The business as usual growth in AI investments is unlikely to increase current levels of AI intensity.