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Gen AI could boost India’s economy by

$1.5t in 7 yrs

G enerative AI (GenAI) has the potential to add a On the data privacy front, the report highlights that 36 per
cumulative $1.2 -1.5 trillion to India's GDP over the
cent organisations see data privacy as the single most
important risk of GenAI, followed by hallucination or
next seven years, according to a report by EY.
The report titled 'AIdea of India: Generative AI's potential fabricated answers (24 per cent), biased responses (21 per
cent) and cybersecurity (16 per cent).
to accelerate India's digital transformation' says that in
2029-30 alone, GenAI has the potential to contribute an Further, 75 per cent of organisations said customer
additional $359-438 billion to India's GDP. engagement was a segment that was most influenced by
The report said that around 69 per cent of the overall impact generative AI.
of GenAI on India's GDP is expected to be derived from Additionally, 73 per cent organisations prefer partnering
sectors such as business services (including IT, legal, with external tech providers for GenAI implementation, the
consulting, outsourcing, rental of machinery and equipment, report adds.
and others), financial services, education, retail, and “Considering GenAI’s immense potential to act as an economic
healthcare. growth catalyst, Governments worldwide are actively pursuing
"Organisations are swiftly adopting an AI-first approach to measures to promote and regulate AI. Implementing measures
digital transformation, aiming to enhance customer like enabling access to training data and marketplaces,
engagement, increase productivity, and achieve greater deployment of Gen AI systems as Public Goods, securing critical
agility in delivering digital capabilities using innovative digital infrastructure (through the roll-out of 5G, data centers,
foundation models and AI-first solutions," said Mahesh access to specialised chips and AI-specific compute
Makhija, technology consulting leader, EY India. infrastructure), and access to talent and public funding of R&D
"Although in the early stages, there is a tremendous sense of will help foster Gen AI innovation,” it said.
optimism in AI to realise its full potential, India must significantly Further experts in the report say that the extent of GenAI's
elevate its efforts in terms of increased government role in its influence in each sector will depend on factors such as
development and deployment," he added. feasibility, rates of adoption, and the respective contribution
of each industry segment to India's economic activity.
The study highlights that around 75 per cent of the
businesses in India express a low to moderate level of “Adopting a 'light touch' approach can create a responsive
readiness to harness the benefits of GenAI. regulatory environment, balancing innovation and risk

While 52 per cent organisations surveyed believe skills-gap management. Clarity on regulatory framework, establishing
as a challenge in harnessing the potential of GenAI for regulatory sandboxes, watermarking GenAI content, and
businesses, around 42 per cent of respondents found the setting standards for accountability and liability to build trust
availability of unclear use cases as another hurdle, the in the AI systems will be critical,” according to the report.
report said. The survey was conducted on 200 C-suite participants from
"Implementing measures like enabling access to training sectors, including technology, media and entertainment,
data and marketplaces, deployment of GenAI systems as financial services, government, health, retail, and
Public Goods, securing critical digital infrastructure and manufacturing.
access to talent and public funding of R&D will help foster Around 60 per cent of these organisations surveyed
Gen AI innovation," it said. acknowledged that GenAI had an impact on their businesses.

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