Centre’s AI roadmap targets $1.7 trillion GDP boost by 2035 – Crypto News

New Delhi: The government aims to generate additional $1.7 trillion in economic value over the next decade by harnessing artificial intelligence (AI), as it unveiled a comprehensive plan consisting of incentives and policy support to deepen the adoption of the breakthrough technology by crucial sectors.

The AI vision roadmap, created by the government’s premier policy think-tank Niti Aayog, lays down the framework for accelerating AI adoption in India, and boosting research and development (R&D) among private firms.

While India’s current official projection expects the size of its gross domestic product (GDP) to rise to $6.6 trillion by 2035, from about $4 trillion now, at an annualized growth rate of 5.7%, Niti Aayog projected that the push for AI adoption can accelerate India’s growth to 8% annually, swelling the size of the economy to $8.3 trillion by 2035.

By 2047, when India expects to become a developed nation, the size of the economy could rise to $13 trillion. But with AI push, it can increase significantly to $21 trillion, according Niti Aayog.

In her address following the rollout of the roadmap on Monday, Union finance minister Nirmala Sitharaman advocated a “soft yet agile” approach to regulating the use of AI—stating that if technology is on a sprint, regulation too should keep pace with it.

“We do not want regulation that may wipe out a technology; we want regulation for ensuring responsible application of the technology,” Sitharaman said. Referring to the Reserve Bank of India’s regulatory sandbox approach, Sitharaman added that such efforts will enable evolving a “soft touch regulatory approach.”

The roadmap proposed specific focus on four key sectors—financial services, pharmaceuticals, manufacturing, and automobiles. In manufacturing, the Centre proposed creation of smart factory corridors that collate clean energy supplies, data centres and top-tier education initiatives. In financial services, proposals included setting-up explainable credit and anti-money laundering initiatives, as well as a national ‘AI for financial services’ programme. Similarly, the plan for pharmaceuticals and automotives includes setting up biotechnology parks, expediting unique molecule discovery, deploying 5G/6G connectivity, smart corridors for real-time smart car infrastructure, and more.

Leapfrogs in innovation

Noshir Kaka, senior partner at consultancy firm McKinsey & Co, said that a two-channel approach for economic growth may include a 25-30% increase in operational efficiencies in enterprises, as well as “leapfrogs” in innovation. “For instance, in the automotive space, Indian automobile firms are still at level two of autonomous driving technologies, while the likes of the US and China are at level four or five—showing the need for India to invest in AI to leapfrog its technological capabilities,” he said.

The rollout is part of a coordinated push across industry and top ministries. On Monday, Tata Sons chairperson N. Chandrasekaran said that the group “will do everything possible to increase focus on R&D, to meet India’s accelerated AI goals.”

Union information technology minister Ashwini Vaishnav, who also spoke on the occasion, said that unlike other countries that have taken a legal approach to technology regulation, that is, to make laws first and expect safety will follow, India has adopted a different techno-legal approach oriented towards fostering innovation.

“When there is a trade-off between regulation and innovation, we tend to tilt more towards innovation,” Vaishnav said. The minister explained that innovation and its application will help the country evolve the right regulatory framework rather than first prescribing a law. That approach has helped us so far and, hopefully, will keep helping us in future as well, the minister said.

Sitharaman acknowledged the challenge AI can pose to India’s demographic dividend as technology brings more efficiency into work, and highlighted the need for AI-driven upskilling of the people who may lose their jobs. She also highlighted the potential of Industrial Training Institutes (ITIs) for AI training and how states can leverage these institutions.

ITIs, which exist in every district, are traditional institutions for technology training and skilling people. To adapt to the age of AI, the central government has announced funding to upgrade these ITIs, Sitharaman said. States can use a ‘hub and spoke’ model—having some main centres and others having linkages with them, for disseminating AI training, she added.

Further, development of industrial applications across telecom, semiconductors, electric vehicles, biotechnology and quantum computing are also under consideration, as India seeks to attain the developed economy status in the next two decades.

Niti Aayog also unveiled a ‘frontier tech repository’, which will look to ease technology access for startups working on AI and other future-facing technologies. Space technologies, aerospace and defence are also a part of India’s push to maximize economic growth through adoption of frontier technologies, which can add up to $475 billion in incremental gross domestic product (GDP) value by 2035 as a result of its push, the Centre added.