Business-model disruption still nascent, says Rajan Navani
Artificial Intelligence (AI) adoption in India is beginning to scale rapidly, moving beyond experimentation towards the use of the technology to improve workflows, productivity and operational efficiencies, according to Rajan Navani, co-chair from the Indian side of the 17th India-Singapore Strategic Dialogue.
“We see at a larger India level, based on available generic data, that the AI adoption for improvement of workflows, efficiencies, among others, is now beginning to scale significantly at a far more rapid pace,” Navani said at a panel discussion held following the closed-door strategic dialogue in Singapore on 27 Aug.
The numbers point to a sharp acceleration. According to the NASSCOM AI Adoption Index cited by the Government of India, 87% of Indian enterprises were actively using AI solutions as of December 2025, with India scoring 2.45 out of 4 on the index. A separate 2025 McKinsey survey found that 88% of organisations globally were using AI in at least one business function, indicating that AI adoption is rapidly becoming an enterprise-wide phenomenon rather than remaining confined to technology companies.
India has also emerged as one of the world’s leading AI ecosystems. It ranked third globally in Stanford University’s 2025 Global AI Vibrancy Ranking, while the relative penetration of AI skills in India was 2.5 times the global average across comparable occupations. India also accounted for approximately US$11.1 billion in cumulative private AI investment between 2013 and 2024, according to the Stanford AI Index cited by the Ministry of Electronics and Information Technology.
The domestic AI opportunity is expanding alongside this adoption. A NASSCOM-BCG report projected India’s AI market to reach approximately US$17 billion by 2027, growing at a compound annual rate of 25–35%.
Navani, however, said the more consequential phase of AI transformation could lie ahead.
“Secondly, AI is actually shaping products through manufacturing processes, whether it is automation or beyond, helping shift the end consumer experience because of AI, he said.
“But what is very nascent is how AI is shaping new business models to disrupt the monetisation and profit margins for such products and whether it is happening within the same companies or through other new age companies,” he questioned.
The distinction, he suggested, is between using AI to make existing businesses more efficient and using AI to fundamentally rethink how businesses create, deliver and capture value.
That shift could become particularly significant as AI moves deeper into functions beyond technology. India’s digital economy already accounted for 11.74% of GDP in 2022-23, or Rs.31.64 lakh crore, and the government projects its share to reach around 20% of gross value added by 2029-30.
The scale of India’s digital infrastructure provides an important foundation for the next wave of AI deployment. The country’s digital public infrastructure, including platforms such as UPI, has created large-scale digital rails across payments, identity and service delivery. NITI Aayog has described the next stage as moving from “DPI 1.0” — which enabled large-scale inclusion and digital services — towards using this infrastructure to drive inclusive prosperity and higher economic capability.
Trust could become the critical constraint
For Navani, however, the acceleration of AI adoption also makes the question of trust more urgent.
He urged businesses, governments and consumers to work together to build greater trust in AI as the technology begins to affect almost every aspect of life.
“AI is just taking the world to its next level, but questions are being asked how much do we trust this technology,” he said.
Cybersecurity, he noted, is one of the most immediate challenges.
“I think enterprises are facing this challenge. Countries are facing it. AI creates the threat, and it is an AI tool itself that is needed to correct it. And therefore, there is a greater need of collaboration around cybersecurity.”
The concern is increasingly measurable. India’s CERT-In tracked 29.44 lakh cybersecurity incidents in 2025, up from 20.41 lakh in 2024 and 15.93 lakh in 2023.
IBM’s 2026 Cost of a Data Breach report also found that the average cost of a data breach in India rose to Rs.25.5 crore in 2026, up 15.9% from Rs.22 crore in 2025. Importantly for the AI debate, IBM found that 26% of malicious breaches in India were AI-generated, while only 32% of organisations reported extensive use of AI and security automation.
This creates a paradox that could shape the next phase of AI adoption: the faster organisations deploy AI, the more important it becomes to build security, governance and trust into the technology at the same time.
Singapore faces a similar challenge as it scales AI adoption. The Singapore government’s latest data shows AI adoption among SMEs more than tripled from 4.2% in 2023 to 14.5% in 2024, while adoption among larger non-SMEs rose from 44% to 62.5%. Singapore has now launched a National AI Impact Programme aimed at supporting 10,000 enterprises over three years to deepen meaningful AI adoption.
Singapore is also putting significant resources behind the AI ecosystem, with the government committing more than S$1 billion between 2025 and 2030 under its National AI Research and Development Plan.
Navani’s argument therefore comes at a point when both countries are moving from AI experimentation towards broader economic deployment — but are approaching the challenge from complementary positions.
India-Singapore opportunity
Addressing the panel on “How Can AI Enable Better Economic and People-to-People Connections Between Singapore and India?”, Navani said the two countries have an opportunity to combine their respective complementary strengths as AI reshapes the global economy.
Singapore has built a reputation around institutional capability, global connectivity, capital, technology and its position within the ASEAN ecosystem, while India offers scale, talent, entrepreneurship and one of the world’s largest digital markets.
Navani pointed to India’s long-term economic ambition as an important backdrop to the opportunity.
India has set itself the goal of becoming a US$30 trillion economy by 2047, a vision articulated by NITI Aayog as part of the Viksit Bharat agenda. The objective would require India to sustain high growth over the coming two decades while moving towards higher productivity, greater manufacturing capability, stronger innovation and higher-value economic activity.
“It is something that the government, industry, civil society, in India is aligned around, which means a significant economic growth from here on over the next 20 years,” Navani said.
For Singapore, the opportunity is equally significant. Its digital economy reached S$128.1 billion in 2024, equivalent to 18.6% of GDP, up from 14.9% in 2019. More than two-thirds of that digital economy came from non-information and communications sectors, underlining that digital and AI adoption is increasingly becoming an economy-wide phenomenon rather than a technology-sector story.
The complementarity between the two economies could therefore become particularly relevant as AI moves from tools and applications into business transformation.
Rather than viewing the relationship simply through the lens of investment, Navani’s comments suggest a broader opportunity — to connect Singapore’s institutional and global capabilities with India’s scale, talent and digital infrastructure.
The potential areas of cooperation extend from AI and cybersecurity to skills, research, enterprise adoption and new business models.
Singapore has already identified AI missions in sectors including advanced manufacturing, financial services, connectivity and healthcare, while its refreshed National AI Strategy also places emphasis on AI talent, datasets, applied research, enterprise adoption and a trusted environment.
For India, the challenge is to ensure that AI adoption translates into productivity and new economic value at scale.
For Singapore, it is to deepen its position as a trusted AI and technology hub while extending the benefits of AI across its wider economy and regional ecosystem.
And for both countries, the larger question may be whether AI can become a new layer of the bilateral relationship — connecting **capital, talent, research, businesses and people across the two economies.
The 17th India-Singapore Strategic Dialogue, organised by the Institute of South Asian Studies at the National University of Singapore, along with Ananta Centre and CII, brought together policymakers, business leaders and experts to discuss the future of the bilateral relationship. The public forum on AI followed the closed-door strategic discussions and focused specifically on how the technology could strengthen economic and people-to-people connections between the two countries. fiinews.com
