AI adoption to generate $1.7 trillion for India by 2035: KPMG report

India’s adoption of artificial intelligence could generate $1.7 trillion in economic value by 2035, driven by semiconductor investments, strong data governance and rapid sectoral adoption, according to a KPMG report released at the World Economic Forum in Davos.

New Delhi: As India’s semiconductor industry scales up, its adoption of artificial intelligence (AI) is projected to generate $1.7 trillion in economic value by 2035 and reshape industries across the economy, a new report has said.

A KPMG report, launched at the World Economic Forum 2026 in Davos, said that India’s responsible AI scaling gained support from robust data governance frameworks, sectoral adoption in healthcare, agriculture, education, and defence, and the creation of the IndiaAI Safety Institute.

“India’s emergence as a pivotal force in global trade, technology, and sustainability is underpinned by bold investments in semiconductor manufacturing and rapid adoption of artificial intelligence (AI),” the report said.

The business advisory firm highlighted India’s achievement in the sector, such as approval of six semiconductor fabrication plants with an outlay of $1.3 billion and allocation of $2.2 billion for deep‑tech research and development.

Government-supported flagship initiatives such as the India Semiconductor Mission and Semicon India are accelerating chip‑making infrastructure, testing and advanced packaging, the report said.

The report highlighted over 38,000 GPUs deployed under the IndiaAI Mission, over 6 million people employed in the technology and AI ecosystem and that 89 per cent of new startups in 2024 leveraged AI, the report said.

“India’s transformation is remarkable. What we’re seeing is more than economic growth, it’s about building trust and shaping the future of global collaboration. From advanced manufacturing and digital infrastructure to clean energy and AI, India is building an ecosystem that drives resilience and innovation at scale,” said Bill Thomas, Global Chairman and CEO, KPMG International.

“The country’s ability to turn ambition into action is what stands out, delivering real progress that opens new opportunities for businesses worldwide,” Thomas added.

India’s leadership in digital infrastructure, sustainability, and advanced technologies like semiconductors and AI sets new benchmarks, according to Yezdi Nagporewalla, Chief Executive Officer, KPMG in India.

The PLI schemes have attracted $22.2 billion, generating $207.9 billion in incremental production and creating 1.26 million jobs, and India reached a 50 per cent non‑fossil fuel share in installed capacity by June 2025, the report noted.