India emerging as ‘major pole’ amid capital shifts, AI evolution: Report

New Delhi: India is pushing back barriers to growth and rising as major pole in multipolar world amid redirecting capital flows, fractured trade and AI reshaping industries, according to a report released on Monday.

As per the Bloomberg Economics report, the country’s opportunities and challenges are shifting as capital flows redirect, trade fractures along geopolitical lines and AI reshapes industries worldwide.

The AI revolution is underway, rush of free-trade agreements is opening new opportunities for exports and tide of urbanisation continues to rise.

In midst of it all, India is pushing back barriers to growth and rising as major pole in multipolar world, said Tom Orlik, Chief Economist for Bloomberg Economics.

The report further noted that India's expanding free-trade network could add $140-170 billion to GDP by 2035.

Domestic reforms targeting lower factory costs and agricultural labour reallocation could magnify these trade gains further, it added.

On capital flows, global flows are becoming more concentrated and more political with flows between rival nations estimated to be 40 per cent lower than between allies and capital zeroing in on AI and semiconductors.

For India, maintaining momentum will require competing against pull of US tech demand and tariff incentives on global capital.

AI could boost India's GDP growth by up to 0.9 per cent annually, providing crucial momentum toward Prime Minister Narendra Modi's goal of developed-economy status by 2047, according to the report.

However, infrastructure constraints may limit gains. India's IT-services sector in particular faces both opportunity and disruption as AI can propel firms up value chain even as automation challenges its labour-cost advantages.

The report further showed that 820 million Indians live in urban environment saying that strengthened municipal governance, infrastructure and land-use planning could turn that urban density into a powerful source of productivity growth.

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