At an industry level, the largest productivity gains are expected in the services sector due to its higher labour share to gross output, while manufacturing and construction will see a smaller impact.
Only 3 percent of Indian enterprises possess sufficient in-house talent and resources to make the most of what AI has to offer, while the remaining 97 percent of executives cite lack of talent as a primary hurdle, according to the findings based on a survey of over 125 C-suite participants.
Rajiv Memani, Chairman and CEO, EY India, says “GenAI is transforming India’s economic landscape by unlocking unprecedented opportunities across sectors. This revolution will fundamentally reshape jobs, driving productivity and innovation. Building talent pipelines and prioritizing upskilling must be at the forefront of every organisation. By fostering public-private collaborations and investing in talent development, India can also become a global hub for AI skilled talent.”
PoCs to production
The survey reveals that adoption is still in its early stages. Only 15 percent of surveyed enterprises have implemented GenAI in production, with 34 percent having completed proof of concepts (PoCs) and 11 percent working on making POCs successful.
About 8 percent of those who have experimented with GenAI report facing challenges in realising a tangible impact. On the other hand, around 36 percent of survey participants have yet to commence any experimentation, reflecting the early stage of adoption.
Enterprises in India are also at different stages of data readiness. Only 3 percent of surveyed enterprises report being fully ready, with 23 percent reporting that they’re in no state of data readiness to take up AI deployments.
Discussing survey findings, Mahesh Makhija, Technology Consulting Leader, EY India, said, “In industries like financial services, healthcare and retail, AI will reshape basic processes including customer acquisition, operations and service, while IT/ITeS and BPO will undergo more dramatic changes. Next-generation industries like biotech, advanced manufacturing and renewables will have the potential to leapfrog to AI-first business models. To maximise the potential for economic growth, India needs to focus on AI policy agenda, compute infrastructure, AI research, addressing challenges in responsible governance, intellectual property rights, and data protection.”
Also Read: AI-Driven Transformation to Add 33.9 Million Jobs to India’s Workforce by 2028: Report
GenAI Impact on productivity
EY’s analysis of over 10,000 tasks across industries shows varying productivity gains across sectors. Amongst the business processes to see the most impact are call centre management, which is likely to witness an 80 percent productivity enhancement, and software development with a potential for 61 percent growth in productivity.
Content development and distribution had 45 percent, followed by customer services at 44 percent, and sales and marketing at 41 percent. Productivity boost in IT/ITeS is expected to be around 19 percent, followed by healthcare at 13 percent and banking/insurance at 8-9 percent.
ROI and falling AI costs
According to the report, being able to measure Return on Investment (ROI) is critical for GenAI investment decisions. EY says its survey of Indian enterprises also points to an inability to fully measure and allocate AI-related costs.
Of the 15 percent of Indian enterprises that report having GenAI workloads in production, only 8 percent (about half) report being able to fully measure and allocate AI costs.
The survey highlights the need for a systematic means to predict the costs of, and measure the impact of, AI before we see greater adoption, EY said.
Also Read: Meta Says Open-Source AI Is Transforming Healthcare Outcomes
At the same time, the cost of AI deployments has fallen, driven by the open-source movement and the trend to use purpose specific small language models (SLMs). The report identifies cost reductions, such as an 80 percent drop in foundational model API prices over the past two years, as a critical enabler for broader adoption.
With deployment costs as low as Rs 120 per hour, AI is becoming increasingly accessible, especially for small and medium enterprises, the report noted.
Also Read: India Leads in AI Adoption, Outpacing Global Average, Says BCG Report
Survey
EY said the survey was designed to reflect the breadth of Indian business sectors, including financial services, retail, healthcare, life sciences, media and entertainment, technology, automotive, industrials, and energy.
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