A recent global study has positioned India at the 64th spot worldwide for the adoption of artificial intelligence (AI), revealing both progress and significant challenges. The report, published by Microsoft's AI Economy Institute (AIEI) on January 8, 2026, indicates that while India's AI usage grew in the latter half of 2025, it continues to lag behind major economies and faces a widening global disparity.
India's Modest Growth in a Rapidly Evolving Landscape
According to the 'AI Diffusion Report 2025', India's AI diffusion rate increased by 1.4 percentage points to reach 15.7% in the second half of 2025, up from 14.2% in the first half. This means roughly one in six Indians used generative AI tools during this period. However, this growth remains below the global average increase of 1.2%, which pushed worldwide adoption to 16.3%.
The findings arrive at a crucial juncture, as India is identified as a pivotal growth market for AI giants like OpenAI, Anthropic, Google, and Perplexity. The country's vast digital infrastructure, including being the second-largest smartphone market with 730 million devices and having some of the world's lowest mobile data rates, presents a fertile ground for expansion. The upcoming India AI Impact Summit in February 2026 is also expected to catalyze further discussions and policy actions in this domain.
The Deepening Global AI Divide
A critical concern highlighted by the Microsoft report is the accelerating gap in AI adoption between the Global North and the Global South. The data shows that adoption in high-income nations is growing nearly twice as fast as in developing regions.
Approximately 24.7% of the working-age population in the Global North now uses AI tools, compared to just 14.1% in the Global South. This imbalance is starkly evident in the list of top adopters, which is dominated by smaller, high-income economies. The United Arab Emirates leads with a staggering 64% of its working-age population using AI, followed by Singapore at 60.9%. Other leaders include Norway, Ireland, France, and Spain.
"When looking at the economies driving the fastest gains, the imbalance becomes even clearer. Of the ten countries with the largest increases in AI adoption share, all are high-income economies," the report stated. It emphasized the challenge of ensuring this wave of innovation benefits more people globally, rather than concentrating advantages in a few regions.
Key Global Takeaways and Lessons for India
The report offers several insights that could inform India's AI strategy. Firstly, it underscores that early investment in digital infrastructure, AI skilling, and government adoption is a common thread among leading nations. Countries that prioritized these areas continue to set the pace.
Interestingly, the report notes that being an innovation hub does not automatically translate to widespread public adoption. The United States, despite leading in AI infrastructure and model development, saw its ranking slip from 23rd to 24th, with a 28.3% usage rate. This suggests that high penetration in smaller, highly digitized nations can outpace larger tech powerhouses.
South Korea's remarkable climb of seven spots to 18th position, driven by national policies, better Korean-language models, and viral consumer trends like AI-generated Ghibli-style images, shows how cultural resonance and targeted improvements can boost adoption.
Furthermore, the breakthrough of models like China's DeepSeek in developing nations, including across Africa, Russia, and Iran, highlights the importance of accessibility. DeepSeek's open-source, free-to-use model removed financial and technical barriers, demonstrating a viable path for increasing diffusion in cost-sensitive markets like India.
As India aims to climb the global AI adoption rankings, the report's methodology offers a clear metric: AI diffusion is measured as the share of people who have used a generative AI product in a given period. For India, bridging the domestic digital divide and learning from both global leaders and peers in the Global South will be essential to harness AI's full potential for its 1.45 billion people.
