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ByNN Desk
India Ranks 4th on AI, With 26% of Global Users but 1% of Private Investment
India now ranks fourth globally on AI performance, behind only the United States, China and Singapore, according to the State of India's Digital Economy 2026 report released by the ICRIER-Prosus Centre for Internet and Digital Economy.
The annual ICRIER-Prosus benchmark places India fourth on the AI Index behind only the US, China and Singapore, with the second-largest AI talent pool, but flags a sharp gap between user share and investment share.
India now ranks fourth globally on AI performance, behind only the United States, China and Singapore, according to the State of India’s Digital Economy 2026 report released by the ICRIER-Prosus Centre for Internet and Digital Economy. On the standalone AI Index, India outpaces Germany, France, the UK, Japan and Canada.
The report documents a broader shift in where AI use is happening. According to the authors, 72% of global AI users are now in developing countries. India and China together account for nearly two-fifths of worldwide adoption, with each country hosting more AI users than all developed countries combined, excluding the US. Generative AI, the report notes, has spread faster than any prior digital technology and became a developing-country phenomenon almost immediately after launch.
The picture for India is one of strong scale paired with clear structural gaps. The country holds the world’s second-largest AI talent pool, after the US. But it commands 26% of global AI users while attracting just 1% of global private AI investment. Frontier infrastructure, advanced chips, compute capacity and large language models, remains concentrated among a small set of countries and firms.
“India has built strong foundations through connectivity, entrepreneurship and digital public infrastructure,” said Pramod Bhasin, chairperson of ICRIER. “The next phase of growth depends on how effectively we leverage AI, deepen innovation capabilities and strengthen digital trust.” Deepak Mishra, distinguished visiting professor at ICRIER, said India has moved from digital adopter to digital leader, but turning scale into sustained innovation and productivity will require stronger institutions, more research investment and forward-looking policy.
Sehraj Singh, vice president of group corporate affairs and public policy at Prosus, called India one of the world’s most influential AI economies.
The report argues India’s long-term competitiveness will depend on mobilizing risk capital, expanding compute access and building stronger commercialization links between universities, startups and industry. The SIDE 2026 study covers 71 countries representing 96% of global GDP, 93% of internet users and 91% of the world’s population, and uses an enhanced CHIPS framework with the AI Index embedded as a standalone tracker for adoption, talent, investment and infrastructure.
India has moved into the top tier on AI adoption and talent. Whether it joins the top tier on innovation, compute and capital will depend on how quickly investment and commercialization scale up to match the user base and the talent supply.
Source: This article is based on the State of India’s Digital Economy (SIDE) 2026 report by the ICRIER-Prosus Centre for Internet and Digital Economy (IPCIDE), released May 29, 2026. Figures and rankings are as reported by IPCIDE.
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