Can India truly become an $8 trillion economy by 2035? If yes, what will it take?

A new report by Nandan Nilekani, Co-Founder and Chairman of Infosys, in partnership with Arkam Ventures, outlines India’s potential to become an $8 trillion economy by 2035. Titled "The Great Unlock: India in 2025", the report highlights both the opportunities and the challenges India must address to reach this ambitious goal.

While India’s digital growth is making headlines globally, the report emphasizes that the path to success will not be without its difficulties.

Let’s take a closer look at the key findings and what they mean for India’s future.

A Dream Within Reach, But Not Without Challenges

India's economic ambitions are massive — an $8 trillion economy by 2035 would mean a transformed nation with deeper markets, stronger businesses, and broader prosperity. But according to Nilekani and his team, the road ahead is anything but smooth.

The report identifies four major hurdles that threaten to derail this dream:

• Severe income inequality

• Limited formalization of the economy

• Restricted access to markets

• Low productivity levels

Each of these challenges paints a sobering picture.

Consider this: just 13 out of India's 788 districts account for half of the nation’s GDP. This staggering concentration of wealth underlines the uneven economic landscape that millions still navigate daily.

Moreover, the income gap is widening at an alarming rate. The top 10% of earners in India today control nearly 60% of the nation’s total income. As a result, around 200 million workers migrate every year from economically weaker regions to stronger states in search of better livelihoods — a vivid testimony to the fractured economic fabric.

Productivity: The Achilles’ Heel

Low productivity is another pressing concern. India’s labour productivity stands at just $7 an hour — almost one-tenth of what it is in the United States.

The situation is worsened by the fact that only 15% of India’s workforce is employed formally, a figure significantly lower than that of peer economies like Brazil and China.

And it doesn't end there.

India’s vibrant base of Micro, Small, and Medium Enterprises (MSMEs) — often described as the backbone of the economy — largely remains informal and financially excluded. Without formalization, these businesses struggle to access capital, markets, and growth opportunities, slowing down the economy's overall engine.

The Silver Lining: India's Digital Transformation

Yet, it's not all gloom.

If there’s one force rewriting India's destiny, it is digital transformation.

Over the last few years, India has built one of the world's most robust Digital Public Infrastructures (DPI) — including Aadhaar, Unified Payments Interface (UPI), and the Account Aggregator Framework. These initiatives have laid the foundation for inclusive digital growth, reaching every corner of the country.

For example, digital transactions in India have skyrocketed from virtually zero to 16 billion per month — a meteoric rise that showcases the nation’s readiness to embrace the digital future.

Another remarkable achievement: Aadhaar-enabled services have slashed the cost of identity verification from $23 to just 50 cents, making it exponentially easier for millions to access banking, government welfare, and other essential services.

The Game Changer: Artificial Intelligence for Bharat

The report underlines that emerging technologies, especially Artificial Intelligence (AI), will play a decisive role in bridging India's socio-economic gaps.

Indian-language AI models are expected to democratize technology access further, making it affordable and practical even for those in rural India. Farmers, students, and small businesses are already beginning to benefit from AI-driven solutions — from better crop yields to smarter learning to enhanced market access.

Looking ahead, the transformation will be even more sweeping.

The report projects that by 2035, half of India's workforce will be AI-native — meaning they will work alongside AI tools or leverage them to boost their productivity.

A particularly inspiring prediction is about women’s workforce participation, expected to nearly double from 25% to 47%. This surge would not only empower millions of women economically but would also reshape India's social and economic fabric in profound ways.

But… Success Won’t Happen on Autopilot

While the vision is electrifying, Nilekani’s report is clear: action, not just aspiration, will determine India’s fate.

Several areas require urgent focus:

• Boosting capital access for small and medium businesses to enable growth.

• Promoting AI adoption across sectors, especially in traditionally underserved areas.

• Simplifying monetization of land and property assets to unlock trapped capital.

If India can get these moves right, the digital economy could unleash a tidal wave of growth, creating millions of formal jobs and driving innovation across every sector.

A Tectonic Shift Awaits

The message of "The Great Unlock: India in 2025" is clear: India stands on the brink of an unprecedented economic transformation.

Yet, the real unlocking will happen not just through technology or policies, but by ensuring that growth is broad-based, inclusive, and sustainable.

In the coming decade, India’s story will be shaped not just by the brilliance of its entrepreneurs or the ambition of its youth, but by how it manages to bridge the deep divides that still fragment the nation.

The next chapter in India’s growth story has already begun — and it’s one the whole world is watching closely.