Equirus Economics said global research broadly supports a positive link between AI adoption and labour productivity, though estimates vary on the scale of the eventual economic impact…reports Asian Lite News Desk
Artificial intelligence (AI) adoption is expected to become a major driver of India’s economic growth, with the country’s services sector positioned to gain significantly from AI-led productivity improvements, according to a report by Equirus Economics.
The report said India is among the emerging economies most exposed to AI-driven productivity gains, mainly because of its large and globally competitive services ecosystem. As the current phase of AI adoption is centred around software-based technologies such as large language models (LLMs), generative AI tools, coding assistants and workflow automation systems, service-led economies like India are likely to benefit the most.
Unlike previous technology cycles, the report noted that the present AI wave has a direct impact on knowledge-based services, allowing companies to improve efficiency, reduce costs and enhance output through automation and intelligent systems.
India’s financial services, information technology (IT) and professional services sectors, which together contribute around 23 per cent of the country’s gross value added (GVA), are among the areas most exposed to AI-driven transformation.
“India’s financial, IT, and professional services account for roughly 23 per cent of GVA, and it is precisely this slice that is most exposed to AI-driven unit cost compression and productivity gains,” the report said.
The findings come as Indian businesses are increasingly adopting AI across marketing, customer engagement, software development, financial operations and professional services. A separate report by Boston Consulting Group (BCG) highlighted that Indian companies are emerging as global leaders in marketing-focused AI adoption, with businesses expecting significant growth benefits from AI-powered transformation.
Equirus Economics said global research broadly supports a positive link between AI adoption and labour productivity, though estimates vary on the scale of the eventual economic impact. Some studies suggest moderate efficiency improvements, while others point towards larger increases in output as AI systems become more widely integrated.
The report said productivity gains from AI could have wider economic benefits by improving competitiveness and lowering operating costs across service industries. For India, where services play a central role in economic activity, these gains could contribute positively to GDP growth.
However, the report cautioned that AI’s impact on inflation may remain limited in the near term. While AI could reduce costs in technology and service-oriented industries, many major components of India’s consumer price index (CPI) basket, including food, commodities and physical services, are not yet significantly affected by current AI adoption trends.
“The categories that dominate India’s CPI basket (food, commodities, physical services) still remain outside this umbrella,” the report noted, suggesting that broad-based AI-driven disinflation may take longer to materialise.
The report also highlighted that AI benefits are unlikely to spread evenly across all sectors. While software-based AI tools can be deployed relatively quickly, industrial applications such as factory automation, robotics and predictive maintenance require greater capital investment and longer implementation timelines.
“Factory-floor AI requires capital-intensive deployment (robotics, predictive maintenance, process automation) with a much longer adoption curve than software tools,” the report said.
Meanwhile, marketing and business leaders are also increasingly viewing AI as a strategic priority. The BCG report found that a large majority of chief marketing officers believe generative AI is already changing how consumers discover and interact with brands, although many organisations are still developing the infrastructure needed for large-scale AI deployment.
Equirus Economics said India’s strong services base, skilled workforce and technology capabilities give the country a favourable position in the global AI transformation cycle. However, the report warned that the productivity dividend from AI across emerging markets will be uneven, depending on adoption speed, investment capacity and sectoral readiness.
As AI adoption expands, India is expected to benefit from improved efficiency and innovation, particularly in services, while sectors outside the immediate AI ecosystem may experience slower transformation.
