Knowledge Nugget | What does the World Bank report say about India’s AI readiness?

The World Bank report "India and Artificial Intelligence: Seizing the Development Opportunity" ranks India among the top 10 emerging-market performers in AI readiness. This assessment is based on India's large technical workforce, integrated IT sector, and digital public infrastructure. The report also highlights India's unique position in AI adoption and offers policy recommendations to address AI-related challenges and risks.

Key takeaways from the report include a tripling of private AI investments in India, increasing from $1.2 billion in 2024 to $4.1 billion in 2025. Additionally, the number of professionals employed by AI companies has risen to 2.36 million in 2025, up from 1.9 million the previous year. Currently, around 23% of Indian firms use some form of AI, compared to approximately 43% in the United States.

Artificial intelligence (AI) is described as a general-purpose technology (GPT), characterized by its ability to perform cognitive tasks, rapidly diffuse across users and sectors, and be cost-effectively scaled once developed. Countries can engage in the AI value chain at three stages: adoption (using AI technologies developed elsewhere), adaptation (modifying existing models to local needs), and advancement at the frontier (creating new AI models, systems, and underlying technologies).

For most developing countries, focusing on adoption and adaptation may be more practical than pursuing frontier development, given the need to prioritize scarce resources across multiple development needs. However, India stands out due to its capacity to engage across the full AI value chain, unlike many other emerging market developing economies (EMDEs).

India's unique advantages in the AI ecosystem include its robust IT-services industry, extensive AI company ecosystem (GCC), large technical workforce, substantial domestic market, rapid digital economy growth, and substantial investments under the Digital India program. These elements enable India to pursue adoption, adaptation, and frontier development in parallel.

Furthermore, initiatives like BHASHINI, AI4Bharat, and the IndiaAI Mission support language technologies and tailored models for Indian conditions, with the IndiaAI Mission aiming to develop domestic foundation models.