Generative AI (GenAI) has the potential to add a cumulative $1.2 -1.5 trillion to India’s GDP over the next seven years, according to a report by EY.
The report titled ‘AIdea of India: Generative AI’s potential to accelerate India’s digital transformation’ says that in 2029-30 alone, GenAI has the potential to contribute an additional $359-438 billion to India’s GDP.
The report said that around 69 per cent of the overall impact of GenAI on India’s GDP is expected to be derived from sectors such as business services (including IT, legal, consulting, outsourcing, rental of machinery and equipment, and others), financial services, education, retail, and healthcare.
“Organisations are swiftly adopting an AI-first approach to digital transformation, aiming to enhance customer engagement, increase productivity, and achieve greater agility in delivering digital capabilities using innovative foundation models and AI-first solutions,” said Mahesh Makhija, technology consulting leader, EY India.
“Although in the early stages, there is a tremendous sense of optimism in AI to realise its full potential, India must significantly elevate its efforts in terms of increased government role in its development and deployment,” he added.
The study highlights that around 75 per cent of the businesses in India express a low to moderate level of readiness to harness the benefits of GenAI.
While 52 per cent organisations surveyed believe skills-gap as a challenge in harnessing the potential of GenAI for businesses, around 42 per cent of respondents found the availability of unclear use cases as another hurdle, the report said.
“Implementing measures like enabling access to training data and marketplaces, deployment of GenAI systems as Public Goods, securing critical digital infrastructure and access to talent and public funding of R&D will help foster Gen AI innovation,” it said.
On the data privacy front, the report highlights that 36 per cent organisations see data privacy as the single most important risk of GenAI, followed by hallucination or fabricated answers (24 per cent), biased responses (21 per cent) and cybersecurity (16 per cent).
Further, 75 per cent of organisations said customer engagement was a segment that was most influenced by generative AI.
Additionally, 73 per cent organisations prefer partnering with external tech providers for GenAI implementation, the report adds.
“Considering GenAI’s immense potential to act as an economic growth catalyst, Governments worldwide are actively pursuing measures to promote and regulate AI. Implementing measures like enabling access to training data and marketplaces, deployment of Gen AI systems as Public Goods, securing critical digital infrastructure (through the roll-out of 5G, data centers, access to specialised chips and AI-specific compute infrastructure), and access to talent and public funding of R&D will help foster Gen AI innovation,” it said.
Further experts in the report say that the extent of GenAI’s influence in each sector will depend on factors such as feasibility, rates of adoption, and the respective contribution of each industry segment to India’s economic activity.
“Adopting a ‘light touch’ approach can create a responsive regulatory environment, balancing innovation and risk management. Clarity on regulatory framework, establishing regulatory sandboxes, watermarking GenAI content, and setting standards for accountability and liability to build trust in the AI systems will be critical,” according to the report.
The survey was conducted on 200 C-suite participants from sectors, including technology, media and entertainment, financial services, government, health, retail, and manufacturing.
* 75% of Indian businesses show limited preparedness to capitalise on Gen AI.
*52% organisations see skills-gap as a challenge to harness GenAI capabilities.
* 73% of organisations prefer partnering with external tech providers for GenAI implementation.
* GenAIs projected boost to key sectors by 2030 (in %):
First Published: Dec 17 2023 | 6:17 PM IST