As India strides into the realm of advanced technologies, a recent Ernst & Young (EY) report underscores the potential of generative artificial intelligence (AI) to inject up to $1.5 trillion into the country’s economy over the next seven years. The report emphasizes the transformative impact of generative AI tools across various sectors, such as financial services, logistics, healthcare, retail, transportation, and education, citing enhanced efficiency, productivity, and personalized customer experiences.

According to EY, embracing generative AI is crucial for Indian enterprises to navigate the era of “Digital Darwinism,” but the report also sounds a cautionary note. It highlights data privacy risks as a significant concern for businesses integrating generative AI, emphasizing the importance of addressing these risks to prevent reputational and financial losses.

While C-suite executives express agreement on the potential economic growth triggered by generative AI, the report emphasizes the need for a national blueprint to guide the integration process. Over 56% of surveyed executives believe generative AI will significantly impact their operations, with a focus on customer experience as the primary area of impact.

Despite the recognition of generative AI’s potential, challenges include skill gaps, unclear use cases, and insufficient government focus on AI initiatives. EY’s report recommends a collaborative approach, suggesting that the government take the lead with a “light-touch” regulatory stance. It advocates treating generative AI systems as public goods, akin to India’s Unified Payments Interface (UPI), and calls for government support in talent access, research and development funding, and the creation of regulatory sandboxes for AI innovation.

In light of India’s strides in incorporating emerging technologies like blockchain, government-backed AI initiatives are expected to foster substantial growth, positioning India alongside leading global players in the AI landscape.