India’s services sector, including financial, IT, and professional services, stands to benefit significantly from artificial intelligence (AI) adoption, according to a report by Equirus Economics. The report highlights that AI-driven productivity gains, particularly in software-driven applications, could lead to stronger GDP growth for the country as AI adoption accelerates.
The current wave of AI adoption, focusing on areas like large language models, generative AI tools, coding assistants, and workflow automation systems, is seen as a game-changer for service-led economies. India’s financial, IT, and professional services, which contribute around 23% to the gross value added, are identified as being particularly exposed to AI-driven unit cost compression and productivity enhancements.
Researchers note a positive correlation between AI adoption and labor productivity, although the extent of these gains varies. While AI-driven productivity improvements are expected to have broader economic implications beyond operational efficiency, the report emphasizes that the benefits of AI adoption may not lead to significant inflation benefits in the short term.
The report also points out that AI benefits may not be evenly distributed across sectors, with capital-intensive deployment required for certain industries. Despite this, India’s robust services ecosystem positions it favorably to leverage the advantages of the ongoing AI adoption cycle, with the report forecasting a real but uneven productivity dividend across emerging markets.
