India is moving towards a major AI-led economic transformation, with artificial intelligence expected to contribute more than $500 billion to the country’s economy by 2030, according to a joint report by IBM and IndiaAI.
The report, titled From Promise to Power: How AI is Redefining India’s Economic Future, highlighted growing confidence among Indian businesses in the country’s AI vision. Around 80% of business leaders said AI investments are likely to directly support India’s GDP growth, while 73% believe India could become a global AI leader by the end of the decade.
At the launch of the report, S. Krishnan said India is building AI systems focused on trust, ethics, and national sovereignty to support inclusive growth. Sandeep Patel described AI as one of the country’s biggest future growth drivers and stressed the need for strong data systems, hybrid infrastructure, and AI-ready talent.
The report showed that sovereign AI infrastructure and hybrid cloud models are becoming increasingly important for Indian enterprises. Around 74% of executives said data location has now become a strategic priority, especially in regulated industries. Nearly 70% also said hybrid AI models help maintain better data governance without affecting operational efficiency.
Despite strong momentum, the study identified major challenges slowing AI adoption. About 57% of respondents pointed to inconsistent data quality as a key obstacle, while 77% highlighted the lack of accessible, affordable, and secure cloud infrastructure as a barrier to AI readiness.
The report also revealed a growing AI talent gap in India. Currently, only 30% of employees possess the AI skills required by businesses. By 2030, the country is expected to need more than 350 million AI-skilled workers, with the required skill readiness expected to rise to 57%.
Initiatives such as IndiaAI FutureSkills are already working to expand AI education in Tier 2 and Tier 3 cities. However, the report stressed that India will need to rethink education systems, workforce development, and career pathways to remain globally competitive.
The study further found that only 15% of organisations are currently scaling AI through large cross-functional investments, while 85% are still operating AI projects at the pilot stage. Around 68% of enterprises also said weak AI governance remains a major hurdle to broader adoption.
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