According to the latest South Asia Economic Update by the World Bank, around 23% of Indian companies are using AI, compared to 43% in the US. The challenge now is to convert the growing capabilities of AI into measurable productivity improvements, business efficiency, and better public service delivery.

The World Bank’s World Development Report 2026: The Promise of Artificial Intelligence, released on 8 October in New Delhi, argues that developed economies need not be the only ones to reap the benefits of the technology. 

Using the “adopt, adapt and advance” framework, countries should first use existing tools, customise them according to their languages and needs, and gradually strengthen their capacity to develop more complex applications.

S. Krishnan, Secretary, Ministry of Electronics and Information Technology (MeitY), underlined the importance of infrastructure, data and skills at the report’s India launch.

“The government’s role is clearly recognised in terms of making sure that we make available the infrastructure… the frameworks in which data sets can be made available… We make sure that skilling takes place because human resources and human capabilities are probably the most important element,” he said.

This highlights an important policy issue. While access to technology is necessary, it is not enough for businesses to benefit from it. They also need the skills, systems, and resources to use it effectively.

From Digital Access To Business Adoption

According to the World Bank’s analysis, based on data from its Enterprise Surveys, businesses in developing economies are already using several basic digital tools. 

Nearly 90% of small firms and 91% of medium and large firms use messaging apps, while 80% of small firms and 87% of medium and large firms have a website or a social media presence.

However, only 27% of employees in small firms and 32% of employees in medium and large firms use computer devices every day. These figures show that access to basic ital tools does not necessarily mean that technology has become part of everyday business activities.

For India’s micro, small, and medium enterprises (MSMEs), the next step is to use AI in areas such as inventory management, demand forecasting, quality control, and production planning.

This involves more than simply having access to a tool. Companies need to identify where AI can be useful, understand the costs involved, and find ways to use it in their daily work.

Vivek Raghavan, co-founder of Sarvam AI, captured the challenge of moving from individual experiments to wider use. “AI is a little bit of a cottage industry, and we need to make it into a factory,” he said.

Limited information, costs, privacy and security concerns, and a lack of skilled workers are among the barriers identified by the World Bank. Smaller businesses may not have the teams or resources to evaluate different solutions and expand their use, making these challenges even more difficult for them.

Productivity, Not Just Technology

Union Minister for Electronics and Information Technology Ashwini Vaishnaw said that the benefits of AI must be judged by the results it delivers.

“Real benefits come from using that technology to generate productivity gains, generate cost gains, generate revenue gains and making a difference in people’s lives,” he said.

India’s locally adapted AI-powered weather prediction system shows how technology can address specific needs. The World Development Report notes that it provides forecasts to more than 30 million farmers, helping many access advance information about the rainy season for the first time. This is an example of AI being used to address a development need rather than adopting the technology simply for its own sake.

The greater opportunity lies in supporting workers rather than replacing them. According to World Bank estimates, AI could meaningfully improve the productivity of 16.2% of employment in low- and middle-income countries, compared with 18.7% in high-income economies. At the same time, 4.5% of employment in low- and middle-income economies is at risk from generative AI, compared with 14.2% in high-income countries. 

These are general economic estimates and not figures specific to India.

Building Conditions For Scale 

Another challenge lies in public services. The World Bank report points to a lack of sufficient evidence on the effectiveness of AI-driven digital health interventions in low-resource settings. This makes it important to assess whether these interventions actually work before expanding their use. Pilot projects need to prove their effectiveness and usefulness in real-world conditions before they can be scaled up.

For India, the priority is therefore not just to build AI infrastructure, but also to focus on workforce training, make tools accessible, ensure that data is reliable and create an environment in which businesses can adopt AI. Governments must also encourage innovation while protecting privacy, security, and public trust.

India’s technology ecosystem and digital infrastructure are evolving. 

However, the benefits will reach more people only when smaller companies can use AI for practical applications, workers can develop the necessary skills, and public institutions can expand solutions that have already proved useful.