The World Bank’s India Development Update projects economic growth of 7.1% in FY27, supported by robust domestic demand and strong exports despite global headwinds. Medium term prospects remain strong, but elevated external risks include global oil prices, El Niño and stock market corrections that could trigger capital flow volatility. The update finds India well positioned to harness artificial intelligence because of its large technical workforce, globally integrated information technology sector and digital public infrastructure. Private AI investment rose from USD 1.2 billion in 2024 to USD 4.1 billion in 2025, while employment at Global Capability Centers increased from 1.9 million to 2.36 million. Given uncertainty over AI’s long-term economic and labor market effects, the World Bank recommends strengthening physical and digital infrastructure, workforce skills and the business environment while broadening access to AI. Its companion South Asia update, which projects regional growth of 6.9% in 2026, also calls for lower adoption barriers for small firms, support for locally adapted AI applications and clear regulation to protect data security and privacy.
World Bank projects India’s economy to grow 7.1% in FY27 and calls for measures to broaden AI adoption
The World Bank projects India’s economy to grow 7.1% in FY27, supported by domestic demand and exports, while warning of elevated external risks. It calls for stronger infrastructure, workforce skills and business conditions to broaden AI adoption, alongside clear rules for data security and privacy.