India enters top 10 emerging markets for AI readiness as investment triples

India has secured a spot among the top 10 emerging markets for artificial intelligence readiness, driven by a massive surge in private funding.

Private investment in AI across the country more than tripled to $4.1 billion in 2025, up from $1.2 billion the previous year, according to a new World Bank report.

The assessment, detailed in a report titled 'India and Artificial Intelligence: Seizing the Development Opportunity', highlights how India's large pool of tech talent, integrated IT sector, and robust digital public infrastructure have positioned it to capitalise on the technology.

This rapid growth is mirrored in the expansion of India's Global Capability Centres. The report notes that the number of professionals employed at these corporate hubs climbed to 2.36 million in 2025, compared to 1.9 million in 2024.

Infrastructure and skills gaps

Despite the influx of capital, the World Bank warned that the long-term impact of AI on jobs and the broader economy remains highly uncertain. To make sure the benefits of the boom are felt widely, the bank said India must implement broad policy reforms.

Paul Procee, the World Bank's acting country director for India, said that using AI as a development tool, rather than just a technology, "could be one of the most powerful levers India has to boost productivity and improve public services".

Achieving this will require addressing what the bank calls "foundational gaps". Its recommendations include upgrading physical and digital infrastructure, improving workforce skills, and making the business environment more hospitable. The report also urged the government to set up clear regulatory frameworks to ease business uncertainty while keeping data secure.

The promise of 'small AI'

The World Bank is pointing to "small AI" as a vital path forward for South Asia. These are targeted, cheaper tools adapted for low-resource environments. The bank is currently funding such initiatives, including targeted agricultural tools through its AgriConnect programme, to help transition workers and distribute the gains from technology more evenly.

Franziska Ohnsorge, the World Bank Group's chief economist for Asia, said the technology has the potential to reshape South Asia's economic trajectory by boosting exports and public service delivery. "But to reap these benefits, governments need to address the foundational gaps that hold back adoption," she said.

The wider region is also showing economic resilience. The World Bank's update projects that South Asia's overall economy will grow by 6.9 per cent in 2026, keeping its status as the fastest-growing region in the world, before easing slightly to 6.7 per cent in 2027.