India’s Demographic Edge: 10-15 Years of Growth Potential Fueled by AI, Says Chief Economic Advisor
New Delhi, Nov 13, 2025: The Indian Council for Research on International Economic Relations (ICRIER) and Prosus co-hosted the first webinar under their renewed partnership at the ICRIER-Prosus Centre for Internet and Digital Economy. The session brought together Prof. Daron Acemoglu, Nobel Prize Winner (2024) and Institute Professor at MIT, and Dr. V. Anantha Nageswaran, Chief Economic Advisor to the Government of India, to discuss how Artificial Intelligence (AI) can be directed to support workforce development, productivity and improved service delivery in India.
Dr. Nageswaran stated that India must create nearly 8 million jobs annually over the next 10–15 years to leverage its demographic advantage. He highlighted that AI should enhance – not replace – human work, particularly in healthcare and education where frontline professionals can be supported to deliver quality services at scale, especially in remote and underserved regions.
Prof. Acemoglu noted that AI tools designed to assist workers – such as technicians, electricians, nurses and educators – are more likely to boost economic participation and productivity than those focussed on automation. He cautioned that if AI development continues to prioritize labour replacement, countries where middle-skilled workers are a core competitive strength may face new economic pressures, narrowing development pathways previously used by several South-East Asian economies.
Dr. Nageswaran also pointed out that India currently has limited computing and GPU capacity available in the United States and China, affecting the country’s ability to train and develop large-scale AI models domestically. He noted that recent reductions in AI subscription pricing by global platforms – such as monthly plans now being offered at the cost of a single low-fee annual subscription – will accelerate user adoption, but also increase the volume of Indian data being captured by foreign AI systems. As more users upload files and documents rather than only text prompts, the amount of granular and sensitive data generated from India is expected to rise, making data ownership and data sovereignty a central policy question going forward.
The discussion underscored the need to build domestic computing capacity, develop context-specific datasets, and strengthen data governance to ensure that AI adoption supports inclusive and sustainable growth.
This webinar marked the first event under the extended ICRIER-Prosus Centre partnership. Established in 2022, the Centre promotes evidence-led policy dialogue on India’s evolving digital economy. Over the next three years, it will continue the State of India’s Digital Economy series, undertake a sub-national digital readiness assessment, and conduct research on startup ecosystems, competition, digital infrastructure, and emerging technologies such as AI, IoT, and climate tech.
Pramod Bhasin, Chairperson, ICRIER, said: “We are delighted to renew our partnership with Prosus on building a Centre of Excellence on India’s Digital economy. Our research will provide critical insights into the digital transformation shaping India’s growth and global competitiveness, including the SIDE report, which has become a benchmark for progress in this space. The Centre’s research will also provide a platform for steering policies, regulations and practices to encourage growth in AI in India, along with inclusivity and security.”
Sehraj Singh, Managing Director, Prosus India, added: “Prosus and ICRIER share a long-standing commitment to shaping India’s digital future through research and dialogue. This renewed partnership comes at a time when technology and AI are redefining how economies grow and people work. By combining ICRIER’s research excellence with Prosus’s experience in innovation-led entrepreneurship, we aim to create actionable insights that guide inclusive and responsible digital transformation.”
The renewed partnership comes under the leadership of Dr. Shekhar Aiyar, the new Director and Chief Executive of ICRIER, who brings extensive experience from the International Monetary Fund, where he led key initiatives across macroeconomic policy, financial stability, and global economic surveillance