Native language and voice-first AI systems can extend the reach of digital services to populations historically excluded from text-heavy and bandwidth intensive platforms, observed Economic Survey 2025-26 released on Thursday (January 29, 2026).
By enabling interaction in native languages and functioning effectively on low-cost devices, such frugal AI pathways align scale with digital inclusion, it reported.
Economic Survey 2025-26: Follow LIVE updates on January 29, 2026
India top contributor to global AI research
India entered the AI era with notable strengths: It currently ranks among the top global contributors to AI research output; possesses a deep pool of technical talent in the field of artificial intelligence and the country also has a highly AI-literate labour force, outranked only by the United States as of 2024, it found.
AI may trigger herding behaviour in financial markets
Global financial markets grapple with the impact introduced by new technologies such as artificial intelligence (AI), acknowledged the survey, highlighting that the IMF’s Financial Stability Report (FSR) of October 2025 forecast that there was a higher likelihood of herding behaviour in financial markets, as global investors may end up deploying similar AI models.
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Investors may get amplified shocks as social media broadcast micro-data
The report noted that, compared to previous decades, investors have become increasingly sensitive to micro-information signals transmitted through social media. These trends suggest the possibility of longer and more amplified shocks in global financial markets. Parallelly, technology stocks pose an emerging risk of inflated valuations, with AI-related stocks accounting for 75% of S&P 500 returns, 80% of earnings growth, and 90% of capital spending growth since ChatGPT launched in November 2022.
Further quoting IMF, it said, structural vulnerabilities such as rising global government debt and aggressive risk-taking among non-bank financial institutions remain capable of intensifying the effects of emerging shocks. At the same time, digital assets such as the Stablecoin were gaining traction and playing a larger role in financial intermediation, it noted.
AI to make substantial contributions to revenue growth
Globally, the adoption of AI in finance is accompanied by parallel developments in international policy, the survey reported. The World Economic Forum’s white paper on AI in Financial Services (January 2025) projects that investments across banking, insurance, capital markets and payments business will reach $97 billion by 2027, with AI making substantial contributions to revenue growth in the forthcoming years through enhanced operational efficiency, accuracy and a higher degree of personalisation at scale. Further, the AI powered alternative credit scoring models promote financial inclusion, particularly in developing economies.
AI impact on global trade
According to the Economic Survey, artificial intelligence (AI) is increasingly shaping global services trade, particularly digitally deliverable services. Emerging evidence suggests a two-way relationship between AI innovation and trade: advances in AI reduce trade costs and increase productivity, while increased cross-border services trade, in turn, accelerates technological diffusion.
The WTO estimated that AI could raise global trade by 34-37% by 2040, with digitally deliverable services expanding by about 42%, driven by lower trade costs and higher productivity.
A 10% increase in digitally deliverable services trade is associated with a 2.6% rise in cross-border AI patent citations across borders, underscoring the mutually reinforcing nature of trade and AI-driven innovation, as per the document. “India is well positioned to benefit from these trends, supported by a strong IT-BPM ecosystem and a rapidly expanding AI talent base,’’ it said.
India is witnessing a surge in AI data centres; yet it’s still a tip of the ice-berg story
Driven by surging data consumption, rapid cloud adoption, and the growing use of AI, India’s data centre capacity is projected to reach about 8 GW by 2030 from about 1.4GW as of Q2 of 2025.
AI data centres are specialised high-performance facilities designed to meet the intensive computational needs of artificial intelligence, machine learning, and deep learning workloads. Despite generating nearly 20% of the world’s data, India hosts only about% of global data centres, around 150 out of 11,000 worldwide, the study said, quoting Nasscom.
“Data centres are also double-edged swords as they are very energy-intensive. With emerging hubs such as Malaysia (Johor), Japan, and Vietnam intensifying competition, addressing structural constraints such as energy shortages will be critical for India to position itself as a global AI data centre hub,’’ the survey highlighted.
Published – January 29, 2026 07:38 pm IST
