KPMG report outlines India's roadmap for AI economic growth

The need for scale

India faces a significant challenge in moving from simply adopting new technologies to actually using them to drive national growth. According to a report by KPMG, the country must do more than just develop new tools; it needs the underlying capabilities to deploy those tools at a massive scale. The report suggests that technology will be a primary driver of India's future productivity and competitiveness.

The core issue identified is the gap between having a technology and creating value from it. The report asks whether the country can build the necessary institutions and data systems to make these tools useful for the general public. Without a strategic focus on these foundations, the benefits of artificial intelligence and other emerging fields may remain out of reach for the broader economy.

The report notes that technology is only as valuable as the practical outcomes it enables for people. This means that the focus should not just be on the existence of AI, but on how it can be integrated into daily life. To achieve this, India must coordinate efforts across research, business, and government sectors to ensure that technological progress translates into real-world results.

Five building blocks for growth

KPMG identifies five specific pillars that India must strengthen to succeed in the era of emerging technologies. These include talent, research and development (R&D), computing and data infrastructure, enterprises capable of scaling technology, and digital public infrastructure. Each of these components must work in tandem to create a functional ecosystem for innovation.

The talent requirement is broad, spanning several different fields. India will need a workforce of skilled professionals who can work in research, engineering, data science, design, and various technical trades. This workforce will be responsible for both the initial creation of new tools and the ongoing maintenance of the systems that run them.

Research and development also require a specific focus on moving discoveries out of the lab. The report highlights the importance of strengthening capabilities in universities and private laboratories while creating mechanisms to move those findings into commercial use. This bridge between academic research and business application is essential for turning scientific breakthroughs into usable products.

Infrastructure and data systems

A major requirement for the success of artificial intelligence is a secure and well-governed data ecosystem. Because AI relies heavily on data, India must prioritize the development of computing and data infrastructure. This includes the physical hardware and the software rules that govern how information is stored and shared safely.

The report points to India's digital payments ecosystem as a successful example of how this can work. The Unified Payments Interface (UPI) has already demonstrated how a well-designed public digital platform can allow others to innovate. By providing a foundation for others to build upon, UPI has fundamentally changed how economic activity happens across the country.

The next opportunity for India lies in extending this same experience to other emerging fields. These include semiconductors, quantum and space technologies, drones, green hydrogen, rare earths, and biotechnology. By creating public platforms for these industries, India can encourage a wide range of businesses to innovate on top of a stable, government-supported foundation.

Economic and social impact

The report suggests that AI has the potential to enhance human capabilities across many different sectors of society. Specifically, it highlights manufacturing, healthcare, agriculture, education, and governance as areas where AI could create new sources of value. These improvements could lead to higher productivity and better public service delivery for millions of people.

However, the report stresses that these benefits are not guaranteed. They require a strategic focus on responsible governance to ensure that AI is deployed in ways that are ethical, secure, and inclusive. The goal is to ensure that the technology serves the public interest rather than creating new risks or inequalities.

For businesses, the report emphasizes the role of both start-ups and established companies. These entities are the ones that will ultimately build and scale the products and services that people use every day. By supporting these enterprises, India can create a pipeline where technological innovation leads to widespread economic growth and societal progress.

The path forward

Moving forward, India's success in the AI space will depend on its ability to coordinate these diverse requirements. It is not enough to have high-tech tools; the country must have the people to run them, the data to feed them, and the businesses to distribute them. This requires a multi-pronged approach that involves education, infrastructure spending, and clear policy guidelines.

The report suggests that the focus should remain on practical outcomes. As the report says, "Technology, after all, is only as valuable as the outcomes it enables." This means that every investment in AI or other emerging tech should be measured by how much it improves lives or boosts the economy. The ultimate goal is to turn technological progress into tangible benefits for the entire population.

As India continues to develop its digital public infrastructure, the next phase will involve expanding these models to more complex fields. By focusing on the five building blocks identified by KPMG, India aims to position itself as a leader in the global tech landscape. This strategy seeks to ensure that the nation remains competitive while fostering an environment where innovation can flourish responsibly.