One Million Start-Ups, Full AI Adoption: Nilekani’s Blueprint for $8 Trillion Indian Economy

Infosys cofounder Nandan Nilekani on Sunday predicted that India will have one million start-ups by 2035. Of these, most of the new-age businesses will belong to the non-metro cities. Currently, India is home to more than 1.59 lakh start-ups. Nilekani believes that this number will grow at a remarkable 20% rate over the next decade.

Speaking at Arkam Annual Meet 2025, Nilekani cited government data to back the fact that nearly half of Indian start-ups are based in smaller cities which are solving region-specific problems. For example, Apnamart --- a DMart-like retail chain focused on smaller town.

The Infosys cofounder stated that there is a virtuous cycle of capital and entrepreneurship in the start-up ecosystem as he ‘happily’ invests in aspiring entrepreneurs. He further suggested eight ways to grow India’s GDP growth rate from 6% to 8%, while expanding the economy to $8 trillion by 2035.

These include land monetisation using tokenization, going all-in on artificial intelligence (AI) adoption, funding start-ups outside metro cities, formalisation of job market, easing regulations, decriminalizing compliance requirements, enabling MSMEs with better technology, and more. And Gen Z individuals are crucial for this transformation because they are tech-savvy.

Besides these factors, four key unlocks like formalisation, capital, technology, and entrepreneurship can achieve the 2035 goal of Indian economy growth, said Nilekani, adding that India should fully embrace the AI adoption.

While AI offers vast applications, prioritizing these areas can drive the most immediate and meaningful impact, accelerating growth and innovation. Expanding AI adoption, particularly in these critical sectors, will not only enhance efficiency but also unlock significant economic potential, especially in capital deployment, Nilekani emphasised.

Read More | Money and The City: Why Start-Ups Like Some Cities Over Others

Govt Seeks Corporate Alliances for Non-Metro Start-Ups

Outlook Business has earlier reported that the commerce ministry is urging large corporates and private companies to foster closer ties with Indian startups, particularly those focused on deep technology and for manufacturing incubators, according to Amardeep Singh Bhatia, Secretary of the Department for Promotion of Industry and Internal Trade (DPIIT).

As the country is gearing up for the tenth year of the Start-up India Initiative, the ministry is actively seeking to enhance both domestic and foreign support for the nation's burgeoning startup ecosystem, with special focus on tier 2 and tier 3 cities.

The government also confirmed that ITC, a leading fast-moving consumer goods company, will soon sign an agreement with DPIIT to launch an incubation program focused on manufacturing startups. Additionally, DPIIT has reached out to the top 100 listed companies on the National Stock Exchange to encourage their participation in establishing manufacturing incubators.