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India has been ranked 4th globally in Artificial Intelligence (AI) performance and 5th in digital economy rankings, according to the State of India’s Digital Economy 2026 report. The country has shown significant improvement, rising from 8th position in 2025 to 5th in 2026 in the overall digital economy index. India now trails only the United States, China, and Singapore in AI performance.

State of India’s Digital Economy 2026

The report was released on 29 May 2026 by the ICRIER–Prosus Centre for Internet and Digital Economy. It evaluates India’s performance across key areas such as AI capability, digital trade, talent availability, and digital adoption.

India’s AI Performance

India secured 4th place globally in AI performance, outperforming several advanced economies including Germany, France, Japan, the United Kingdom, and Canada in major AI and digital indicators. The country also hosts the world’s second-largest AI talent pool.

Digital Economy and Trade

India’s digitally delivered trade reached approximately US$328 billion, covering sectors such as software exports, IT services, and cloud-based solutions. Digitally delivered trade refers to services provided through digital networks and platforms across international borders.

AI Talent and Global Usage

Developing countries account for around 72% of global AI users, with India and China together representing nearly two-fifths of this share. According to a LinkedIn study cited in the Stanford AI Index 2026, India ranks first globally in AI skill penetration on LinkedIn and second in AI talent growth between 2019 and 2025.

Talent Retention

Despite strong growth, India recorded a net outflow of AI authors and inventors in 2025, reflecting the movement of researchers and innovators to other countries, as highlighted in global talent mobility studies.

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