How AI Can Help India Become the World’s Largest Middle-Class Economy
At the World Economic Forum in Davos 2026, during a session covered by Business Today (BT Davos 2026), Christopher Lehane, Chief Global Affairs Officer at OpenAI, delivered a compelling vision for India’s economic future. In conversation with Siddharth Zarabi, Group Editor of Business Today, and Rajdeep Sardesai, Consulting Editor at India Today TV, Lehane addressed growing concerns in India—around job displacement, data access, and the lack of a domestically built large language model—while outlining why artificial intelligence represents a transformative opportunity rather than a threat.
Lehane drew powerful historical parallels, likening AI to electricity and the printing press: revolutionary general-purpose technologies whose greatest impact stems not from who invents them, but from how widely they are adopted and built upon. He emphasized that only a handful of countries possess the resources to develop frontier AI models at scale. For most nations, including India, the real competitive edge lies in the application layer—widespread literacy, training, and integration of existing AI tools into everyday economic activities.
India stands uniquely positioned to leverage this shift. With its massive population, youthful demographic dividend, rapidly expanding digital infrastructure (often called India Stack), and one of the fastest rates of AI adoption globally, the country is already seeing everyday users—from urban entrepreneurs to rural communities—embrace tools like ChatGPT. OpenAI has prioritized India by offering free access to powerful models, signaling a long-term commitment to its developer ecosystem and consumer market, which ranks as one of the company’s largest.
The path to becoming the world’s largest middle-class economy hinges on AI-driven productivity gains. Lehane highlighted several key mechanisms:
- Boosting sectoral efficiency: AI can supercharge output in manufacturing, agriculture, services, and IT without proportionally increasing inputs. This efficiency leap is essential for sustaining the high GDP growth rates (7%+) needed to elevate hundreds of millions into middle-income status.
- Empowering micro, small, and medium enterprises (MSMEs): These form the backbone of India’s economy. AI tools enable automation of routine tasks, smarter marketing, customer engagement, supply-chain optimization, and global competitiveness—allowing small businesses to scale, create jobs, and contribute to broader wealth creation.
- Fostering inclusive development: By personalizing education, improving healthcare diagnostics (especially in underserved areas), enhancing financial inclusion, and enabling skill-building, AI can bridge urban-rural divides and lift lower-income groups into the middle class.
A major point of discussion was the jobs debate, particularly in India’s IT and BPO sectors. While some worry about automation displacing entry-level roles amid a slowdown in traditional hiring, Lehane argued that AI is more likely to augment human work than eliminate it wholesale. It empowers back offices to handle more complex, higher-value tasks, shifts talent toward AI-integrated roles, and opens new opportunities in an “intelligence age.” The risk, he noted, is not mass unemployment but a widening capability gap—between organizations and workers that adopt AI and those that lag behind.
The critical enabler, according to Lehane, is massive investment in AI literacy and skilling. India must prioritize training for students and mid-career professionals alike. Without broad-based adoption and upskilling, the productivity dividend will remain unrealized. Policies that promote open innovation, localized AI applications, and responsible governance will accelerate this process.
This perspective aligns with broader economic forecasts discussed at Davos 2026. Projections suggest India could become an upper-middle-income economy by around 2030 (with per capita income exceeding $4,000), potentially the world’s third-largest economy by 2028, and a $30–35 trillion powerhouse by 2047. AI adoption is viewed as a key accelerator, harnessing India’s demographic advantages, digital scale, and entrepreneurial energy to realize these ambitions.
In Lehane’s view, the question is not whether AI will reshape economies—it’s whether countries like India will seize the moment through education, adoption, and innovation. If it does, AI could be the catalyst that propels India toward becoming home to the world’s largest and most dynamic middle class. For deeper insights, the full BT Davos 2026 session featuring Christopher Lehane is available on Business Today and YouTube platforms.
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