Industries adopting AI to play a big role in India becoming 3rd largest economy, says FM Nirmala Sitharaman

By | May 30, 2025

1. Strategic Push Through Government Policy

To spearhead AI-led development, the Government of India has launched a ₹10,300 crore AI Mission, focused on building foundational infrastructure and nurturing AI innovation. The mission includes:

  • Establishment of high-performance computing centers
  • Development of open-source AI models
  • Promotion of ethical and responsible AI use

This initiative aligns with the government’s broader vision of “Make AI in India” and “Make AI work for India,” encouraging domestic innovation while ensuring equitable benefits across society.

2. Sector-Wise Impact of AI

AI’s application is already being seen across multiple sectors, each poised to contribute significantly to economic expansion.

Agriculture

  • Tools like KissanAI’s Dhenu 1.0 assist farmers with precision agriculture, crop diagnostics, and yield predictions.
  • AI supports water management, pesticide usage, and soil health, boosting productivity and sustainability.

Healthcare

  • AI is revolutionizing diagnostics, predictive analytics, and treatment personalization.
  • Government-backed initiatives promote AI-based early detection tools for diseases such as cancer and tuberculosis.

Education

  • AI enables customized learning experiences and multilingual educational platforms.
  • Virtual tutors and adaptive learning technologies are bridging gaps in rural education.

Urban Development

  • Smart cities are leveraging AI for traffic management, pollution monitoring, and waste reduction.
  • AI supports more efficient urban planning and sustainable infrastructure.

3. State-Level Innovations

States are playing a crucial role in scaling AI adoption. Odisha recently became one of the first Indian states to approve a comprehensive AI Policy (2025). The policy aims to:

  • Build data centers and AI labs
  • Upskill the youth in emerging technologies
  • Foster AI-led entrepreneurship
  • Ensure ethical use of AI through robust governance frameworks

Such policies are expected to encourage localized AI innovations that cater to state-specific challenges.

4. AI for Governance and Public Services

AI is transforming public service delivery by streamlining operations, improving transparency, and reducing administrative delays. Key applications include:

  • AI-driven chatbots for citizen queries
  • Automated grievance redressal systems
  • Predictive tools for policy impact analysis

This digital transformation is enhancing government efficiency while improving access for underserved populations.

5. India’s Global AI Footprint

India is making significant strides globally in AI adoption. In 2024 alone, Indian users downloaded over 3 billion AI-based apps, surpassing the United States and China. This rapid uptake highlights:

  • Growing digital literacy
  • Increasing affordability of mobile internet
  • Rising interest in AI-powered tools for business and personal use

India’s expanding AI ecosystem is also attracting international investments and collaborations, further boosting its global standing.

6. Preparing a Future-Ready Workforce

AI’s integration into industries also poses challenges—especially around employment and skill gaps. To address this, the government has launched upskilling initiatives such as:

  • FutureSkills Prime: A public-private partnership aimed at training professionals in AI, cybersecurity, data science, and cloud computing.
  • Partnerships with edtech platforms and universities to offer AI certifications and training.

These programs are intended to equip the next generation of workers with the skills needed to thrive in an AI-driven economy.

7. Economic Outlook and Role of AI

India’s GDP is expected to reach $5 trillion by 2027, making it the world’s third-largest economy after the US and China. AI is seen as a key enabler of this growth through:

  • Enhancing productivity in core sectors
  • Creating high-value employment opportunities
  • Promoting innovation-led exports
  • Driving efficiencies in governance and infrastructure

FM Sitharaman underlined that the responsible and inclusive use of AI will ensure that economic growth benefits all strata of society.

Conclusion

India’s push toward AI adoption is not just about technological advancement—it’s a strategic economic imperative. Through bold investments, inclusive policies, and strong institutional support, AI is set to become a cornerstone of India’s development narrative. As the country continues on its path toward becoming a global economic powerhouse, AI will play a defining role in shaping its future.