India’s economy in the era of AI

India is certain to become the world’s third-largest economy within the next decade, but the emergence of generative artificial intelligence (AI) will hamper rather than help its rise. This is in large part because of the detrimental impact it could have on India’s highly-successful business process outsourcing (BPO) sector. But beyond the next decade, the gradual, broader diffusion of AI across the economy could lead to significant improvements in healthcare and education, which would raise human capital and boost productivity growth.