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India’s AI Dividend Likely To Be Earned By Legacy Manufacturers Rather Than Digital-Natives

Swarnadwip Nath Published Feb 20, 2026, 03:48 PM Updated Sep 17, 2026, 05:55 AM

India’s AI dividend is expected to benefit legacy manufacturers more than digital-native firms. At the India AI Impact Summit 2026, experts highlighted that traditional industries with scale, infrastructure, and capital are better positioned to integrate AI into operations, while digital startups face challenges in scaling population-level solutions profitably.

India’s AI ambitions are under close scrutiny as policymakers, industry leaders, and global experts gathered at the India AI Impact Summit 2026 in New Delhi. Discussions revealed that the real beneficiaries of India’s AI dividend may not be digital-native startups but legacy manufacturers who possess the scale, capital, and operational depth to deploy AI effectively.

Legacy Advantage

Manufacturing giants in sectors such as automotive, pharmaceuticals, and consumer goods are better equipped to integrate AI into production lines, supply chains, and quality control systems. Their established infrastructure allows them to absorb AI-driven efficiencies at scale, translating into measurable productivity gains and cost reductions.

Key Highlights

Legacy manufacturers have the scale and capital to integrate AI seamlessly into operations
Digital-native startups face challenges in scaling AI solutions to population-level impact
AI adoption in manufacturing is expected to drive productivity, efficiency, and global competitiveness
Policy discussions at the summit emphasized balancing innovation with inclusivity and affordability

Digital-Native Challenges

While startups have pioneered AI innovation, many struggle with profitability and scaling solutions beyond niche markets. High inference costs, limited infrastructure, and fragmented ecosystems hinder their ability to deliver population-scale impact. Experts noted that without open architectures and affordable compute, digital-native firms may remain constrained.

Policy And Ecosystem Support

The summit emphasized the need for open digital infrastructure, similar to UPI, to democratize AI adoption. Policymakers highlighted that collaboration between government, academia, and industry will be crucial to ensure AI benefits extend beyond large corporations to smaller enterprises and communities.

India’s AI dividend, therefore, appears poised to flow first to legacy manufacturers who can leverage their existing strengths. With the right policy frameworks, however, digital-native startups could still play a transformative role in niche innovation and ecosystem development.

Sources: Bloomberg, Economic Times, Mint

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