India’s Minister of State for Electronics and Information Technology, Rajeev Chandrasekhar, has emphasized that the true measure of Artificial Intelligence (AI) progress should be its contribution to a country's Gross Domestic Product (GDP). Speaking at a technology conference, Chandrasekhar stated that AI, along with online gaming and other digital sectors, could contribute up to $300 billion to India’s GDP by 2026-27.

AI as a Key Driver of Economic Growth

Chandrasekhar pointed out that while AI adoption is increasing globally, many discussions still focus on its technological advancements rather than its economic impact. He stressed that India’s AI development should be evaluated based on its ability to generate jobs, improve productivity, and boost economic growth.

He cited projections showing that India's technology sector aims to contribute 20-25% of the national GDP by 2025-26, with AI playing a crucial role. Currently, the Indian IT and digital economy account for around 10% of GDP, with AI adoption accelerating across industries such as healthcare, manufacturing, education, and finance.

India’s AI Strategy and Investment

The Indian government has been actively promoting AI adoption through its ‘India AI – 2023’ initiative, which aims to transform the country into a global AI powerhouse. The initiative includes:

$1 billion in government funding for AI research and infrastructure.
A plan to train 2 million AI professionals by 2030.
AI-powered solutions for agriculture, healthcare, and governance.
Collaboration with tech giants such as Google, Microsoft, and NVIDIA to develop AI models tailored for India.

Chandrasekhar highlighted that AI could enhance productivity across various industries, particularly in automated manufacturing, digital services, and government efficiency. He cited studies predicting that AI-driven automation could increase India’s productivity by up to 40% in the next decade.

AI in Online Gaming and Digital Economy

Apart from traditional industries, AI is also making waves in the online gaming and digital entertainment sectors. Chandrasekhar projected that AI-driven innovations in gaming, such as personalized experiences and real-time analytics, could help the sector contribute $15 billion annually to India’s economy by 2026.

With over 450 million online gamers, India is already one of the world’s fastest-growing gaming markets. AI is being used to enhance gaming realism, improve security, and create adaptive gameplay. This, coupled with India’s rising digital payment ecosystem, is expected to drive further investments in the sector.

Challenges and Ethical Concerns

Despite AI’s potential economic benefits, Chandrasekhar acknowledged the challenges, including:

Job displacement due to automation.
Data privacy and security risks.
Bias in AI algorithms affecting decision-making.
The need for AI regulation to prevent misuse.

To address these concerns, the Indian government is working on a National AI Policy that ensures responsible AI development while maximizing economic benefits.

India’s AI Leadership on the Global Stage

India is positioning itself as a key player in the global AI race, with an increasing focus on:

Developing indigenous AI models tailored for Indian languages and challenges.
Expanding AI research through public-private partnerships.
Strengthening AI-related intellectual property (IP) rights to foster innovation.

Chandrasekhar concluded that AI should not be judged solely by the sophistication of its algorithms but by its ability to boost economic productivity and improve people’s lives.

Conclusion

With AI projected to be a major contributor to India’s economy, the government is taking proactive steps to harness its potential while addressing its risks. As AI continues to evolve, India aims to balance innovation with economic impact, ensuring that technology serves as a key enabler for GDP growth and job creation.