India is among the top 10 leading emerging-market performers in artificial intelligence readiness and is well positioned to benefit from the technology, according to the World Bank’s latest India Development Update released on October 6, 2026.
The World Bank’s report, titled “India and Artificial Intelligence: Seizing the Development Opportunity,” highlighted India’s large technical workforce, globally integrated information technology sector and digital public infrastructure as key factors supporting its AI readiness.
Private investment in artificial intelligence in India more than tripled to $4.1 billion in 2025 from $1.2 billion in 2024, the report said. At the same time, the number of professionals employed by Global Capability Centres (GCCs) in the country increased to 2.36 million in 2025 from 1.9 million in 2024.
“India is one of the top 10 leading emerging-market performers on AI readiness,” said Paul Procee, World Bank Acting Country Director for India.
“Harnessing AI as a development tool – not just a technology – could be one of the most powerful levers India has to boost productivity and improve public services,” he said.
The World Bank, however, noted that the long-term economic and labour market impact of AI remains uncertain. It said India would need broader policy measures to strengthen AI-enabling infrastructure, improve the business environment, expand access to AI and enhance labour capacity so that the benefits of the technology can be shared more widely.
The report also highlighted the importance of adopting and adapting AI to local conditions. For much of South Asia, the World Bank said, significant gains could come from AI applications designed for low-resource environments and specific local needs.
The report called for measures to reduce barriers to AI adoption among small businesses, encourage local AI innovation and establish a clear regulatory framework that reduces uncertainty while protecting data security and privacy.
The World Bank Group is also supporting the development of what it calls “small AI” through its AgriConnect initiative. These are targeted and locally adapted AI tools intended to make the benefits of the technology more accessible while supporting workers through the transition.
The World Bank said AI adoption has the potential to improve labour productivity, expand export opportunities and strengthen public service delivery across South Asia. However, it said governments need to address foundational gaps that could limit the adoption and broader benefits of AI.
“But to reap these benefits, governments need to address the foundational gaps that hold back adoption,” said Franziska Ohnsorge, World Bank Group Chief Economist for Asia.
The World Bank recommended strengthening workforce skills, creating a more business-enabling environment and improving physical as well as digital infrastructure.
The latest update also projects South Asia’s economy to grow by 6.9% in 2026, retaining its position as the world’s fastest-growing region. Growth is projected to slow to 6.7% in 2027 as external headwinds increase.
For India, the report’s AI assessment points to strong readiness supported by its technology workforce, IT ecosystem, GCC expansion and digital public infrastructure. At the same time, the World Bank has emphasised that further investment in infrastructure, skills, access and policy frameworks will be important for India to translate AI readiness into broader economic and development gains.
