India could add $1 trillion to its GDP by 2035 through AI, according to a report by venture firm Z47, consulting firm Zinnov and OpenAI, which said the country has become the world’s second-largest AI consumer market but still has low overall penetration.
The report, titled ‘The India AI Edge’, noted India now has more than 100 million weekly ChatGPT users, ranking second globally after the United States. However, fewer than 10% of Indians currently use AI tools, highlighting room for expansion.
The study said AI could add 1 to 1.5 percentage points to India’s annual GDP growth rate and help bridge a projected $1 trillion gap needed for the country to reach the government’s $8.3 trillion ‘Viksit Bharat’ economy target by 2035. India’s GDP is projected to rise from $3.9 trillion in 2025 to $7.3 trillion by 2035 at current growth rates, leaving a $1 trillion shortfall that AI-driven productivity gains could help close.
The report stated India’s digital public infrastructure and described AI as the next major digital leapfrog after the mobile internet, digital identity and digital payments waves.
Consumer adoption data in the report showed that India’s AI usage is heavily concentrated among younger users and urban centres. Nearly 48% of ChatGPT messages in India come from users aged 18-24, compared with 33% globally, making India’s AI user base among the youngest in the world.
Gen Z users were recorded to drive AI adoption across learning, practical guidance, writing and self-expression use cases. Practical guidance, including tutoring, health advice and ‘how-to’ queries, emerged as the largest use-case category by message volume.
India initially emerged as a work-first AI market in 2024, with around 60% of ChatGPT messages related to work. By late 2024, non-work usage had overtaken work-related use and continued to widen through 2025. India still maintains a slightly higher share of work-related AI usage than global averages because of its young and technically skilled user base.
Indian users were also found to rank among the top globally for advanced AI use cases such as coding, data analysis and reasoning. According to the report, Indian users generate coding queries at three times the global median, while data-analysis tool usage among paid users is four times higher than the global median. Codex usage is nine times higher.
The study noted India ranks among the top five countries globally for ‘thinking capability’ , measured through reasoning-token usage by paid ChatGPT users.
Despite the scale of adoption, usage remains concentrated geographically. The top 10 Indian cities account for around 50% of weekly active users while representing less than 10% of the population. Bengaluru ranked first in coding-related AI usage, followed by Hyderabad, while Delhi NCR recorded the highest ChatGPT penetration in the country. Ahmedabad and Chennai also ranked among the top cities for coding-related AI capabilities.
The report also pointed to emerging AI usage patterns outside major metropolitan areas. States including Assam, Jammu and Kashmir, Odisha, Tripura and Manipur showed higher-than-average usage for education and healthcare-related AI queries. Assam accounted for 22% of messages in education and learning-related categories, while Jammu and Kashmir accounted for 10%.
The report said India’s gender gap in AI adoption is narrowing, though women remain underrepresented compared with global averages. The share of users with typically feminine names in India stood at about 43%, compared with a global majority of around 51% reached in mid-2025.
On the enterprise side, the study found that 95% of Indian CXOs surveyed had already embedded AI into workflows in some form. About 46% of companies were classified as ‘mature adopters’, meaning AI had moved beyond pilots into core operations, while 49% remained early adopters and 5% were still exploring the technology.
AI adoption was strongest in engineering, customer support and marketing functions. Mature support teams were found to autonomously resolve as much as 80% of customer tickets without human intervention.
The report also noted AI is reshaping hiring and software development practices. Around half of enterprises surveyed said engineering hiring had continued despite AI adoption, though expectations for technical roles had risen and companies were shifting toward more senior architecture roles.
Indian AI startup funding nearly doubled from about $627 million in 2024 to $1.26 billion in 2025, according to the report. Investment growth was strongest in vertical AI sectors such as healthcare, fintech and legal technology, while enterprise AI and developer tools also attracted funding.
India’s sovereign AI push is being driven through the IndiaAI Mission, which includes subsidised compute infrastructure, AI datasets, startup financing and local-language AI development initiatives. Government-backed AI infrastructure includes more than 38,000 GPUs available at subsidised rates, with another 20,000 expected to be added.
India’s AI compute demand could rise to about 7 gigawatts by 2030, roughly 30 times current capacity, with inference demand expected to account for 90-95% of usage.
