AI, capital, startups & reforms will drive India’s growth to $8 trillion: Infosys’ Nandan Nilekani

India’s path to an $8 trillion economy by 2035 will be unlocked by artificial intelligence (AI), digital innovation, and deep economic reforms, says Infosys co-founder Nandan Nilekani.

At Arkam Ventures’ Annual Meet on 12 March 2025, Nilekani laid out “four great unlocks”—technology, capital, entrepreneurship, and formalization—that he believes can propel India’s growth beyond current projections.

“We know what it means to build population scale, frugal, high volume low-cost infrastructure, and the same thing can be now applied to AI,” he said.  

Nilekani outlined how India can accelerate from a 6% to an 8% CAGR, enabling the economy to reach $8 trillion by 2035, by leveraging the key “unlocks”.

Technology

The next digital transformation for a billion Indians will be driven by the fusion of India’s digital public infrastructure (DPI) and AI, according to Nilekani.

“One of the goals of open source models like what is being built at AI4Bharat is to make sure that we have enough data in Indian languages which are spoken, as a public good,” Nilekani said, adding that such models would be beneficial to startups to build Indian language interfaces for products and services, thereby creating scale and reducing costs. 

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“The same principles of high volume, low cost that India did with DPI will be applied to AI at a population scale with open data sets,” he said, adding that the technology’s use cases should be in the areas of agriculture, languages, and education.

Capital

“By 2035, India will become the preferred IPO market globally,” according to Nilekani. He said that while India sees a higher number of IPOs compared to the US, American markets tend to have higher valuations. However, the key distinction lies in the level of active investments, where India is witnessing a significant surge.

Unlocking capital in India, according to Nilekani, will come from account aggregators, which currently allow for individuals to use the data of their transactions to get access to credit. 

He believes this technology should be expanded to bring all credit-related services online. This includes better digitisation of GST data, business data, income tax returns, and non-government data. 

“Everything should be online where I can get my data given to a lender and get a loan,” he said.

Secondly, India’s real estate sector needs to embrace tokenization. “The tokenization of land assets using a proper ledger can unlock these things, where you can tokenize every piece of land, making it easily tradable,” Nilekani said.

Such a system would enable Indians to leverage their land as a financial asset, allowing them to either sell or use it as collateral for loans, ultimately fostering entrepreneurship and business creation.

Entrepreneurship

Unlocking entrepreneurship in India hinges on integrating more startups into the national market, particularly those emerging beyond the top eight metros. 

“Platforms like Meesho and ONDC will allow small guys to sell to our national market,” Nilekani said.

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According to the Ministry of MSMEs, India has approximately 63 million micro, small, and medium enterprises. If these businesses are brought online and connected to the broader digital economy, at least 10 million of them could evolve into “truly modern enterprises because they have access to technology,” Nilekani emphasised.

Formalisation

Digitalisation and the entry of GenZ workers will reimagine work across the board, whether its formal jobs, gig workers, or even entrepreneurs. But in order for these jobs to be formalised, two things need to happen, according to the Indian billionaire. 

“We need to dramatically simplify our laws,” Nilekani said, pointing out that many of India’s regulations are remnants of its colonial past. However, if the country aims to nurture a million entrepreneurs by 2035, “this doesn’t work anymore,” he added.

Secondly, for India to formalise its workforce at a population scale, there needs to be a “nationally portable credential system and a nationally portable benefit system.”