Impact of Artificial Intelligence on the Indian Economy: A Comprehensive Review

Artificial Intelligence (AI) has emerged as a transformative force, reshaping global economies and technological landscapes. In India, AI adoption is influencing economic growth, productivity, labour markets, innovation ecosystems, and policy frameworks. This paper reviews the existing literature and empirical evidence on AI’s multifaceted impact on the Indian economy. It examines both positive outcomes—such as productivity enhancements, new job creation, and sectoral modernization—and negatives including job displacement, skill gaps, and digital divides. The review draws upon academic research, industry reports, and policy documents to present a balanced assessment. Key findings reveal that while AI can significantly boost GDP and competitiveness, India’s success will depend on targeted investments in skills, infrastructure, and regulatory frameworks. The paper concludes with recommendations for policymakers and stakeholders to harness AI for inclusive and sustainable economic growth.