AI investment surges in India, but adoption stays low

NEW DELHI: Private investment in AI in India more than tripled to $4.1 billion in 2025 from $1.2 billion in 2024. However, only 23.4 per cent of Indian firms reported using AI, compared with 42.7 per cent of firms in the United States, according to a World Bank survey released on Tuesday.

The gap is wider when adoption is measured by whether companies pay for AI. Only 3.5 per cent of Indian firms reported paying for AI software or subscriptions, compared with 23.1 per cent of US firms.

The figures suggest that the sharp increase in AI investment in India has yet to translate into comparable adoption across formal businesses.

The World Bank released the findings as part of its October India Development Update, which raised India’s FY27 growth forecast to 7.1 per cent from its earlier estimate. The report identified AI as a potential source of productivity growth but warned that skills, infrastructure and other barriers could limit adoption.

India remains among the leading emerging-market economies on AI readiness, according to the report. However, the World Bank’s AI Adoption Index shows a substantial gap with the US.

India scored 0.27 on the index, compared with 0.85 for the US. The index takes into account factors including AI software purchases, the use of advanced AI applications and the deployment of AI in core business functions.

Private AI investment in India rose by $2.9 billion in a single year, from $1.2 billion in 2024 to $4.1 billion in 2025.

At the same time, Global Capability Centres (GCCs) employed 1.9 million professionals in 2024, with the number rising to 2.36 million in 2025. However, the GCC figure covers the broader professional workforce and should not be treated as a count of AI jobs. The World Bank Enterprise Survey on AI Adoption points to infrastructure and education as two areas where Indian firms see room for improvement.

The latest evidence also provides a more measured picture of India’s AI employment story. The country is adding highly skilled technology jobs and attracting significant investment, but available firm-level data do not show that AI adoption has spread evenly across the wider business sector.

The World Bank’s findings leave open the question of whether India’s rapid growth in AI investment can translate into broader firm-level adoption and productivity gains.

Follow The New Indian Express channel on WhatsApp

Download the TNIE app to stay with us and follow the latest