Artificial intelligence is gradually finding its place in businesses across South Asia, but the region continues to lag behind advanced economies in integrating the technology into everyday operations. Recent figures highlighted in the World Bank Group’s latest South Asia Update indicate a considerable difference between India and the United States in corporate AI adoption, raising questions about the region’s readiness to compete in an increasingly technology-driven global economy.

According to the reported figures, approximately 23% of Indian firms use artificial intelligence, compared with 43% of businesses in the United States. The gap illustrates the uneven pace at which companies are incorporating AI into their operations, decision-making processes and business strategies.

India’s AI Adoption Has Significant Room to Grow

India has developed a growing technology ecosystem supported by its large pool of digital talent, expanding internet infrastructure and vibrant startup sector. AI is increasingly relevant to industries such as banking, healthcare, manufacturing, education, retail and information technology. Businesses can use the technology to automate repetitive tasks, analyse large volumes of information, improve customer service and support faster decision-making.

However, the reported adoption rate suggests that AI integration has not yet become widespread across Indian businesses. While technology-focused companies may be better positioned to experiment with advanced digital tools, smaller enterprises and businesses operating in traditional sectors can face greater difficulties in adopting them.

The financial cost of implementation, limited access to specialised expertise, inadequate digital infrastructure and concerns about data security can all influence whether a company decides to introduce AI into its operations. Businesses may also struggle to identify practical applications that deliver measurable improvements rather than simply adding another layer of technology.

The United States Maintains a Wider Adoption Lead

The comparison with the United States highlights a substantial difference in the reported use of AI by businesses. At 43%, the US figure is 20 percentage points higher than India’s reported 23% rate.

This difference does not necessarily mean that every American business is more technologically advanced than its Indian counterpart. Adoption patterns can vary according to company size, industry composition, access to investment and the type of AI technology included in a survey. Nevertheless, the figures point to an important challenge for Indian businesses seeking to strengthen their international competitiveness.

Companies that successfully integrate AI may gain advantages through improved productivity, more efficient resource allocation and the ability to respond quickly to changing customer demands. Businesses that delay adoption could find it harder to keep pace as AI-based tools become increasingly common in global markets.

Why AI Matters for South Asia’s Economic Future

Artificial intelligence has the potential to support economic development across South Asia, a region with a large workforce, expanding consumer markets and significant differences in digital access between communities and businesses.

For enterprises, AI can help improve forecasting, identify operational inefficiencies and reduce the time required to complete certain tasks. In agriculture, AI-enabled systems may support crop monitoring and weather-related decision-making. In healthcare, suitable applications can assist with analysing medical information and managing administrative workloads. In manufacturing, intelligent systems can help identify production problems and improve quality control.

The economic benefits, however, will depend on how effectively businesses deploy these tools. Access to technology alone is insufficient without reliable infrastructure, trained employees, responsible data management and appropriate oversight.

South Asian economies also need to ensure that smaller companies can participate in the digital transition. If AI adoption remains concentrated among large corporations and technology firms, the resulting productivity gains may not spread evenly throughout the economy.

Skills and Infrastructure Remain Important Priorities

Expanding AI adoption requires investment in both technology and people. Businesses need employees who understand how to use AI tools, evaluate their outputs and recognise their limitations. Education providers, professional training institutions and employers can contribute by developing practical digital skills that match changing workplace requirements.

Reliable internet connectivity, access to computing resources and affordable digital services are equally important. Smaller businesses may benefit from accessible AI platforms, shared digital infrastructure and training programmes that reduce the initial cost of experimentation.

Policymakers can also support responsible adoption by encouraging innovation, strengthening cybersecurity practices and clarifying expectations around privacy, accountability and the use of automated systems.

At the same time, companies must recognise that AI-generated information can contain errors and that automated decisions require appropriate human supervision. Responsible implementation is essential if businesses are to build trust among customers, employees and commercial partners.

Turning AI Potential into Measurable Productivity

The difference between India’s reported adoption rate and that of the United States offers a useful indication of the work still required to broaden AI use across the Indian economy. Yet the objective should not simply be to increase the number of businesses claiming to use AI.

More meaningful progress would involve demonstrating that AI improves productivity, supports better services, strengthens business resilience and creates opportunities for workers. Companies will need to select suitable applications, assess their results and expand successful initiatives while managing financial, operational and ethical risks.

The World Bank Group’s South Asia Update brings attention to the region’s position in the wider digital transformation. For India and its neighbours, the challenge is to translate growing interest in artificial intelligence into practical business adoption that supports inclusive economic growth.

As AI capabilities continue to evolve, the ability of South Asian firms to combine technological investment with workforce development and responsible implementation could become an important factor in determining their future competitiveness.