Around 75% of firms in India are still not using artificial intelligence, with AI adoption remaining uneven across the economy : World Bank

The World Bank said India has a strong foundation for the adoption and adaptation of AI, including a large IT sector, a vibrant startup ecosystem and well-established digital public infrastructure. However, AI deployment has so far been uneven, with adoption increasing mainly among formal firms, and only 75% of firms in India still not using AI.

Smaller firms in the informal sector and many workers also continue to have limited use of AI, the World Bank said.

The World Bank in its India Development Update said 14% of Indian workers are in jobs where AI can complement their work and raise their productivity. At the same time, it cautioned that being exposed to AI does not necessarily mean being replaced.

Since the emergence of generative AI, sectors highly exposed to AI have seen both job losses and job creation, with changes particularly visible in entry-level roles. The Bank said the story so far is more about workforce adjustment and task reallocation than broad-based job losses.

The World Bank said AI could raise productivity by helping workers and firms perform tasks faster and better. However, such gains are not automatic and depend on the scale of AI adoption, skills and complementary infrastructure.

To help India realise its AI potential, the World Bank said the country should deepen adoption, accelerate adaptation and pursue selective frontier development.

Deepening adoption would require more formal and informal firms and workers to use AI. Accelerating adaptation would involve scaling up AI applications across the country, while selective frontier development would involve attracting private investment into areas such as compute and data-centre capacity, as well as research where India has an advantage.

The Bank said India is well positioned to benefit from AI, but getting the policy right will make a difference.