India is uniquely positioned to reap significant rewards from the ongoing breakthroughs in Artificial Intelligence (AI), setting the stage for it to emerge as the world's third-largest economy. This optimistic outlook was presented by India's Consul General in Shanghai, Pratik Mathur, during his address at the annual Consul Generals and CEOs Business Forum in Shanghai on Friday, June 6, 2025.
Mathur emphasized that this is a particularly opportune moment for Asia, and especially for India. He highlighted India's status as the world's largest and fastest-growing democracy, characterized by a substantial population within the lower to middle class that is not only educated but also possesses high aspirations and a strong desire for consumption.
India stands to uniquely benefit from the confluence of the fourth industrial revolution and the rapid advancements in AI. The Consul General noted India's current $4 trillion economy is projected to expand to nearly $30 trillion by 2047. Furthermore, India benefits from favorable demographics, with a youthful population poised to contribute significantly to its economic growth. According to Mathur, just days prior to his address, India had surpassed Japan to become the fourth-largest economy globally and is on track to overtake Germany and secure the third-largest position soon.
Several factors contribute to India's accelerating economic growth. The "Make in India" program, launched in 2014, plays a crucial role in transforming India into a global manufacturing hub. The government has introduced various incentives, including concessional loans, tax rebates, and Production Linked Incentive (PLI) schemes, designed to encourage domestic manufacturing.
The impact of these initiatives is already evident. India has become the second-largest mobile phone manufacturer worldwide, trailing only China. Between 2014 and 2022, the country witnessed the shipment of over 2 billion mobile phones, demonstrating an impressive annual Compound Annual Growth Rate (CAGR) of 23%.
The government's recent policy measures are considered revolutionary, fostering indigenous efforts in shipbuilding, promoting private sector involvement in the nuclear power sector, and stimulating the consumption-based economy through tax breaks for a sizable middle class. This middle class, estimated at 400 million people, represents one of the largest consumer bases globally.
In addition to these factors, India is making substantial investments in AI infrastructure, including a $3 billion commitment to the National Quantum Mission, and promoting AI-driven solutions across various sectors like agriculture, cleantech, spacetech, and healthcare. India is dedicated to the responsible development and deployment of AI, demonstrated by Prime Minister Modi's co-chairing of the Paris Summit, underscoring the country's commitment to using AI for the benefit of all. India's thriving startup ecosystem, ranking 19th globally, further solidifies its position as a hub for AI innovation, with Bengaluru recognized as one of the top 10 startup hubs worldwide.
