New Delhi | India has emerged as the world's fifth most digitalised economy and ranks fourth globally in AI performance, according to a report released on Friday by the ICRIER-Prosus Centre for Internet and Digital Economy (IPCIDE).

The 71-country benchmarks reveal India outpaces Germany, France, Japan, UK and Canada in AI race as 72 per cent of global AI users now in developing countries, it said.

India has emerged as the fifth most digitalised economy and is placed fourth on the CHIPS-AI index, according to the State of India's Digital Economy (SIDE) 2026 report.

"The report documents a fundamental shift in the global digital landscape: 72 per cent of AI users are now in developing countries, with India and China together accounting for nearly two-fifths of worldwide AI adoption," it said.

India generated USD 328 billion in digitally delivered trade and is home to the world's second-largest AI talent pool.

It observed that Generative AI diffused faster than any previous technology in history, becoming a developing-country phenomenon almost immediately after launch.

The report's findings reveal a "structural shift" in global digital leadership.

"Among the world's top five digital economies, three - China, Singapore and India - are now from the Indo-Pacific region, signalling the emergence of a tripolar digital order alongside the traditional North Atlantic pole," it further said.

India climbed to fifth in global rankings (eighth in 2025), as digital momentum accelerated in an increasingly competitive environment.

"The country's standalone AI index ranking of 4th - behind only the United States, China and Singapore - validates its emergence as a global AI powerhouse," as per the report.

ICRIER Chairperson, Pramod Bhasin said India has built strong foundations through connectivity, entrepreneurship and digital public infrastructure.

The next phase of growth depends on effectively leveraging AI, deepening innovation capabilities and strengthening digital trust, he said.

"India is no longer just a large digital market - it is emerging as one of the world's most influential AI economies," Sehraj Singh, Vice President, Group Corporate Affairs and Public Policy, Prosus said