IMF says AI boom is boosting Asian growth. Is India getting its share?

The artificial intelligence investment boom is helping sustain global economic growth at around 3 per cent, with Asian economies benefiting from rising demand for the hardware behind the technology. India is attracting more private AI investment and building its readiness for the technology, but the gap between its ambitions and actual adoption raises questions about how much of the global boom it can capture.

International Monetary Fund (IMF) Managing Director Kristalina Georgieva said on Monday that the surge in AI infrastructure spending was providing a boost to Asian economies even as disruptions to energy supplies weighed on global growth. She was speaking at the opening of the IMF and World Bank annual meetings in Bangkok, Thailand.

The investment boom could raise growth in advanced Asian economies by 0.5 to 1 percentage point and in emerging Asian economies by 0.2 to 0.8 percentage point, Georgieva said. The IMF had forecast global growth at 3 per cent for 2026 in July and is scheduled to release an updated outlook on Tuesday.

The gains, however, are not evenly distributed across the region. Economies integrated into global manufacturing and technology supply chains are benefiting from demand for the equipment and components needed to build AI infrastructure.

The question, for India, is whether rising investment, a growing pool of AI-skilled workers and wider adoption of the technology can help it capture a larger share of this expansion.

India is attracting AI investment, but the gap remains wide

India attracted $4.1 billion in private AI investment in 2025, ranking sixth among countries in the World Bank data cited in its report, India and Artificial Intelligence: Seizing the Development Opportunity. The figure was up from $1.2 billion in 2024, indicating a sharp increase in investor interest.

However, the gap with the leading markets remains substantial. The United States attracted $285.9 billion in private AI investment in 2025, while China received $12.4 billion.

India’s position is more encouraging when measured by its preparedness for AI. The World Bank’s AI Readiness Index placed India 10th among emerging-market performers, with a score of 23.8. The United States led the index with 100, followed by China at 53.8.

The ranking suggests India has made progress in developing the foundations needed to use AI. But readiness does not necessarily translate into widespread adoption or the ability to supply the infrastructure behind the technology.

Data from April 2025 cited in the report showed that only 4 per cent of India’s internet users reported using ChatGPT. The comparable figures were 29 per cent in both the United States and South Korea.

The figures measure reported use of one AI tool rather than overall AI adoption across businesses and consumers. Nevertheless, they highlight the gap between India’s potential market for AI and its current use among internet users.

Can India benefit beyond its technology services sector?

The investment boom described by the IMF is being driven in part by demand for the physical infrastructure required to develop and run AI systems. This includes data centres, computing equipment, semiconductors and other electronic components.

Asian economies with established manufacturing capabilities are positioned to benefit from this spending. India’s opportunity is to strengthen its role in these supply chains while expanding the use of AI across its existing industries.

The World Bank has identified limited participation in AI-related global value chains as a constraint for South Asia. For India, greater involvement in electronics manufacturing and AI infrastructure could provide another route to capturing investment, alongside its established information technology services industry.

The country is also seeing a rise in demand for AI-related skills. AI-related vacancies accounted for around 2.2 per cent of Indian job postings in November 2022, rising to 6 per cent by April 2025, according to the data cited by the World Bank.

This points to growing demand for workers who can develop, deploy or work alongside AI systems. But converting that demand into broader productivity gains will depend on whether businesses adopt the technology and workers acquire the necessary skills.

The growth opportunity comes with a jobs challenge

The economic gains from AI will also depend on how the technology affects employment.

At the Bangkok meetings, Georgieva described AI as a transformative technology with far-reaching consequences for jobs, education, economic growth and government tax revenues. The IMF estimates that AI could augment, downgrade or eliminate 40 per cent of jobs over time.

World Bank President Ajay Banga said the institution was exploring how smaller AI applications could improve productivity in areas such as agriculture, healthcare and education in emerging markets.

Singapore President Tharman Shanmugaratnam also warned that AI was reducing demand for entry-level jobs, including opportunities available to graduates.