Is artificial intelligence set to pump USD 550 billion into five key sectors of India’s economy by 2035, or is the country getting carried away by numbers too big to measure?
That question framed a sharp discussion at the India Today AI Summit in Delhi, where PwC India released its AI Edge for Viksit Bharat report projecting the USD 550 billion boost. Business leaders and technology executives debated whether the figure reflects tangible potential or premature optimism.
“It’s a combination of hype and reality,” said President & Chief Executive Officer of the US- India Strategic Partnership Forum, Mukesh Aghi, responding to the projection. “It’s too early to see where the transformation is going to come in.”
He pointed to visible shifts in IT and BPO, where AI is already altering workflows. But in areas such as drug discovery, healthcare and energy, he cautioned that outcomes remain uncertain. “USD 550 billion is a large number and I think we have to be very cautious about it,” he said, urging policymakers and businesses not to “get into the hype”.
At the same time, Aghi warned that ignoring AI would be costly. “If you don’t leverage it, if you don’t make it accessible, affordable and scalable, that is going to harm the economy and the society and the country.”
ENERGY: INDIA’S HIDDEN ADVANTAGE?
For the AI economy to expand, computing power and data centres must scale rapidly. Sumant Sinha, CEO of Renew Power, representing the energy sector, argued that India may be better positioned than assumed.
“In the power sector particularly, a lot of work has happened in terms of making sure that we are at a point where we have energy sufficiency,” he said. If data centre demand rises, he added, “we are in a position to meet it”.
By 2035, if India’s GDP reaches USD 15 to USD 17 trillion, he argued, USD 550 billion would amount to roughly three to four percent of output. “It’s not a big number. It is quite conceivable that you can have something of that order of magnitude actually happening.”
He went further, suggesting India could export computing power in the form of intelligence. “Think about exporting power. That’s really what’s going to happen in the form of intelligence.”
DATA CENTRES AND SOVEREIGNTY
Chairman at Avaada Group Vineet Mittal pointed out that India holds nearly 20 per cent of the world’s data but accounts for only about three percent of global data centre capacity. Much of Indian user data is stored overseas.
With new data regulations emerging, he argued, localisation could drive a surge in domestic capacity. Power availability, he said, would not be the bottleneck. “We are self-sufficient,” he said, citing recent additions to generation capacity and upcoming renewable projects.
He contrasted this with the United States, where data centre demand is rising faster than grid expansion. “There is an opportunity loss which is already happening,” he argued, suggesting India could position itself as a platform for global hyperscalers.
INNOVATION GAP AND AI ‘FEUDALISM’
Yet the debate repeatedly returned to a central concern: innovation.
Around 80 per cent of existing AI infrastructure is concentrated in the United States and China. India may have a vast user base and abundant data, but can it convert that into strategic advantage?
Aghi warned of “AI feudalism”, where a handful of companies control foundational models, chip design and infrastructure, leaving countries dependent. “You have few leaders in the business world controlling the whole AI infrastructure and countries are dependent on that,” he said.
India’s strength, he argued, lies in software and applications rather than hardware. “The hardware will become plumbing. It’s the application side which is going to drive available solutions around the world.”
He called for higher research and development spending, noting that India invests roughly one percent of GDP in R&D, compared with about 3.5 percent in the United States and even higher in Israel. He also stressed the need for regulatory reform and access to affordable capital for entrepreneurs.
GOVERNMENT AS ENABLER, NOT DRIVER
Panellists agreed that the government cannot build large language models on its own. Its role, they said, is to create the enabling framework.
That includes ensuring data sovereignty, facilitating data centre expansion, strengthening the national grid and easing access to advanced chips through trade arrangements.
Sinha said, “The government can’t do what entrepreneurs need to do. That is very clear.” Instead, it must ensure conducive regulation and infrastructure so private players can experiment and scale.
There was also a warning against relying solely on wage arbitrage and software services. As AI tools automate coding and development tasks, India’s IT sector may face disruption unless it moves up the value chain.
MISSED BUS OR SECOND Y2K?
Has India already missed the AI bus?
Sinha took a middle ground. The United States and China may be ahead, he said, but India is not in the back of the pack. With a young demographic, a growing talent pool and increasing global integration, he expects a wave of AI startups to emerge.
Aghi was more emphatic. “This is the second Y2K moment for Indian industry,” he said, recalling how India’s software sector expanded when entrepreneurs seized opportunity amid limited state direction.
“If we create the same environment for the entrepreneur and bring the capital which is cheap, you will see India flourish in this area,” he said.
The India Today AI Summit exchange offered no definitive answer to whether USD 550 billion is hype or destiny. But it made one point clear: the AI race is not just about models and chips. It is about power grids, policy choices, capital flows and whether India can turn its data advantage into innovation before dependence hardens into digital hierarchy.
