New Delhi, Dec 17 : Generative AI (GenAI) has the potential to add a cumulative $1.2-1.5 trillion to India's gross domestic product (GDP) over the next seven years, a new report showed on Sunday. India can potentially add $359-438 billion in the FY2029-30 alone, reflecting a 5.9-7.2 per cent increase over and above baseline GDP, according to the EY India report. Approximately 69 per cent of the overall impact is expected to be derived from sectors such as business services (including IT, legal, consulting, outsourcing, rental of machinery and equipment, and others), financial services, education, retail, and healthcare. "Although in early stages, there is a tremendous sense of optimism in AI and to realise its full potential, India must significantly elevate its efforts in terms of increased government role in development and deployment,' said Mahesh Makhija, Technology Consulting Leader, EY India. Moreover, providing a critical compute ecosystem for continuous innovation and growth will be vital for India to stay competitive in this evolving landscape, he added. The report findings showed that 60 per cent of organisations acknowledge the significant influence of Gen AI on their businesses. However, 75 per cent of them express a low to moderate level of readiness to harness the benefits of GenAI. The two primary challenges faced by organisations currently are skills-gap (52 per cent) and the availability of unclear use cases (47 per cent), while only 36 per cent organisations see data privacy as the risk of GenAI. Moreover, the development of a Gen AI strategy is now deemed essential, with 75 per cent of organisations identifying customer engagement as the most crucial aspect influenced by GenAI, the report mentioned. Considering GenAI's immense potential to act as an economic growth catalyst, Governments worldwide are actively pursuing measures to promote and regulate AI. The report said that clarity on regulatory framework, establishing regulatory sandboxes, watermarking GenAI content, and setting standards for accountability and liability to build trust in the AI systems will be critical. 'Similar to the UAE and the EU, developing open-source ecosystems for basic algorithms and training datasets can help Indian entities and start-ups develop their own GenAI products and fast-track indigenous innovation,' it added. /IANS