Niti Aayog maps India's AI moment: 'Can achieve 8% GDP growth, $8.3 tn economy by 2035'

India has the potential to reach a GDP of $8.3 trillion by 2035 if it accelerates productivity and innovation through artificial intelligence (AI), compared with a projected $6.6 trillion under the current 5.7% growth path, NITI Aayog said on Monday.

Releasing a report titled "AI-for-Viksit-Bharat: The Opportunity for Accelerated Economic Growth", NITI Aayog CEO B.V.R. Subrahmanyam said AI could become the "decisive lever" for India’s economic transformation.

"If India is to accelerate its growth to the 8% annual rate required for the realization of Viksit Bharat, we have no option but to significantly raise productivity across the economy and unlock new growth through innovation. Artificial Intelligence can be the decisive lever. This report sets out a practical roadmap on how we can harness AI to translate this potential into outcomes," Subrahmanyam said.

He added that the path to 8% growth runs through decisive AI adoption and innovation.

AI's three big unlocks

The report highlights three key levers through which AI can add incremental growth:

- Accelerating AI adoption across industries, improving productivity and efficiency, bridging nearly 30–35% of the growth gap.

- Transforming R&D with generative AI, which can help India leapfrog into innovation-driven global opportunities, bridging 20–30% of the gap.

- Innovation in technology services, which can strengthen India’s reputation as a global leader, contributing 15–20% of the uplift.

According to the report, AI adoption worldwide could add $17–26 trillion to the global economy in the next decade. India, with its large STEM workforce, expanding R&D ecosystem, and strong digital capabilities, could capture 10–15% of global AI value.

India's AI window of opportunity

India's AI window of opportunity looks sharper when set against the country’s growth outlook. At the current growth rate of 5.7%, India’s GDP is projected to touch $6.6 trillion by 2035. But under the aspirational 8% path, the GDP could climb to $8.3 trillion. NITI Aayog estimates that AI-led transformation alone could bridge at least $1.1–1.4 trillion of this gap.

Subrahmanyam underlined that industries like banking and manufacturing can deploy AI today to improve efficiency and competitiveness, while frontier innovation - from AI-driven drug discovery to software-defined vehicles - could build the next engines of growth.

"With a focused and sector-specific approach...the path to 8% growth runs through decisive AI adoption and innovation. This report offers a roadmap to guide that journey. I invite government, industry, and academia to move forward with urgency and collective purpose," he said.