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Special ── 2026-10-24

KPMG: Why Sovereign AI Matters for India's Growth

KPMG argues that building AI capability at home, not just using it, will shape India's next growth leap.

What changes

KPMG says the next decade will reward nations that turn AI investment into stronger industries, more competitive businesses, better public services and higher-value jobs. For executives and policymakers, that makes AI a question of investment in compute, talent and institutions, not only of adoption.

In KPMG's survey, 89 per cent of organisations reported measurable value from AI. Only 12 per cent consistently assessed that value against cost across the enterprise. This suggests organisations need to improve how they measure value.

Why it matters

KPMG says supply chains are being redrawn and geopolitical equations are shifting, so AI is becoming a defining source of economic power. It describes sovereign AI, meaning the capability to shape, scale and govern AI on a country's own terms, as a strategic capability alongside energy security and defence preparedness.

According to KPMG, the debate has moved from experimentation to scale, trust, infrastructure and long-term value creation. It also says the race for AI leadership is increasingly a race for compute, which will decide which economies can innovate independently.

What the report says

KPMG argues that the key question for India is whether it will merely consume AI developed elsewhere or build the capabilities to shape, scale and govern it on its own terms. It compares AI to electricity and connectivity as a foundational layer of competitiveness.

KPMG says countries with capabilities across data, compute, semiconductors, models and talent are likely to capture a greater share of future digital value chains. Countries that rely entirely on external capabilities risk becoming consumers of intelligence rather than creators of it.

KPMG points to India's digital public infrastructure, namely Aadhaar, UPI and DigiLocker, and says the next opportunity is AI infrastructure. It says AI can help farmers raise yields by combining satellite imagery, weather, soil data and crop analytics. It warns that dependence on external AI systems for critical functions creates vulnerabilities. It adds that India's AI must understand Indian languages, contexts and operating conditions.

Who and what scope

The report comes from KPMG in India. Its authors are Nilachal Mishra, Partner and Head of Government & Public Services, and Purushothaman KG, National AI Leader. The article was first published in The Economic Times Online on 22 October 2026, and KPMG posted it on its website on 23 October.

It covers India's national strategy and industries, including healthcare, financial services, agriculture, education, public services, defence and sport. The survey figures come from KPMG's Global AI Pulse Q3 2026 and cover organisations in the Americas, Asia Pacific and EMEA (Europe, the Middle East and Africa).

Why this report

The article tries to answer whether India will be a consumer or a builder of AI. KPMG says economic resilience, national security, technological capability and human capital can no longer be treated as separate agendas.

KPMG says a country's ability to compete will depend on how well it combines these into one growth engine. It says India already has momentum, and the task now is to connect government, industry, academic research and startups into a coherent ecosystem.

How they studied it

The piece is an opinion article and does not describe its own research method. It draws on figures from KPMG's Global AI Pulse Q3 2026 survey and on India's existing examples of Aadhaar, UPI and DigiLocker.

The article does not give the number of survey respondents or the fieldwork dates. Its examples in agriculture and sport describe potential uses and are not backed by data.

Key points

  1. KPMG argues the question for India is whether it merely uses AI or shapes and governs it on its own terms.
  2. In KPMG's Global AI Pulse Q3 2026 survey, 64% of organisations in the Americas, 61% in Asia Pacific and 56% in EMEA were scaling AI or beyond.
  3. In the same survey, 89% reported measurable value from AI, but only 12% consistently assessed that value against cost.

Conclusion

KPMG says the countries that lead the AI era will not simply use AI. They will build the infrastructure, talent and institutions that shape how AI creates value, and it says India has the opportunity to be one of them.

The article is an opinion piece and does not state its survey sample size or fieldwork dates. Its figures should be read as KPMG's claims.

Quotes and sources

“KPMG’s Global AI Pulse Q3 2026 survey found that 64 per cent of organisations in the Americas, 61 per cent in Asia Pacific and 56 per cent in EMEA were scaling AI or had progressed beyond that stage.”
── KPMG, 2026-10-23
“The survey also found that 89 per cent of organisations were reporting measurable value from AI, although only 12 per cent consistently assessed that value against cost across the enterprise.”
── KPMG, 2026-10-23
“Countries that rely entirely on external capabilities risk becoming consumers of intelligence rather than creators of it.”
── KPMG, 2026-10-23
“The global race for AI leadership is increasingly becoming a race for compute.”
── KPMG, 2026-10-23

Source articles

Written by AI (Claude) from the report and its coverage, then checked by Jev (TypeSafe's judgement model), a Gemini fact-check and a verbatim check of every quote.