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India ranks 64th globally in AI adoption, Microsoft study finds

India continues to lag behind several major economies in the global adoption of artificial intelligence, ranking 64th worldwide despite a steady rise in usage during the second half of 2025, according to a new report released by Microsoft’s AI Economy Institute.

The study shows that AI diffusion in India increased to 15.7% in the latter half of 2025, up from 14.2% in the first half of the year. While the growth reflects rising awareness and experimentation with generative AI tools, it remains below the global average and trails countries such as China, Brazil, Germany, Japan and the United States.

Globally, AI adoption rose to 16.3% in the second half of 2025, compared with 15.1% earlier in the year, indicating that roughly one in six people worldwide now use generative AI. Smaller, highly digitised nations dominated the top rankings, led by the United Arab Emirates and Singapore, followed by Norway, Ireland, France and Spain.

Global Divide Widens Between North and South

The report highlights a growing imbalance between advanced and developing economies. AI adoption in the Global North is expanding nearly twice as fast as in the Global South, underscoring disparities in infrastructure, skills and access. About 24.7% of the working-age population in high-income economies now use AI tools, compared with 14.1% in lower-income regions.

Microsoft noted that all ten countries recording the fastest gains in AI adoption are high-income economies. Early investment in digital infrastructure, government-backed AI initiatives and workforce skilling has helped nations such as the UAE and Singapore maintain a strong lead, with more than half of their working-age populations using AI tools.

Despite leading global AI research and infrastructure development, the United States slipped slightly in rankings, suggesting that innovation leadership does not always translate into widespread consumer adoption.

India’s Paradox: Scale Without Penetration

India’s relatively low ranking comes despite its vast digital footprint. The country is the world’s second-largest smartphone market and among the biggest consumers of mobile data, supported by some of the lowest data costs globally. It has also emerged as a key growth market for major AI companies, driven by its large, young and digitally connected population.

However, the report suggests that limited enterprise adoption, uneven digital infrastructure and gaps in AI skills continue to restrain broader usage.

Microsoft said it measures AI diffusion as the share of people who used a generative AI product during a given period, based on aggregated and anonymised data. While acknowledging that no single metric is perfect, the company said the findings point to the urgent need for more inclusive AI adoption strategies worldwide.