New Delhi, June 13 (IANS): India’s services sector is among the most exposed to artificial intelligence-driven productivity gains among emerging economies, positioning the country to benefit from stronger GDP growth as AI adoption accelerates, according to a report by Equirus Economics. The report said the current wave of AI adoption, driven by software-based applications such as large language models (LLMs), generative AI tools, coding assistants and workflow automation systems, is particularly favourable for service-led economies. It noted that India’s financial, IT and professional services sectors account for around 23 per cent of the country’s gross value added (GVA), making it one of the most AI-exposed large emerging markets. According to the report, these sectors stand to gain significantly from AI-driven productivity improvements and reductions in unit costs, which could strengthen overall economic growth.
The report highlighted that researchers broadly agree on a positive relationship between AI adoption and labour productivity, although estimates vary regarding the scale of potential gains. It said the resulting productivity improvements could have broader economic benefits beyond operational efficiency and would be especially advantageous for service-oriented economies such as India. However, the report cautioned that AI-led benefits may not be evenly distributed across sectors and that the impact on inflation is likely to remain limited in the near term. Categories that dominate India’s Consumer Price Index (CPI), including food, commodities and physical services, remain largely outside the current AI adoption cycle. It also noted that manufacturing-related AI applications require capital-intensive deployment and are expected to have a longer adoption curve compared to software-based tools. Despite these challenges, the report said India’s large and globally competitive services ecosystem places it in a strong position to capture the benefits of the current AI wave, although the productivity dividend across emerging markets is expected to remain uneven.