India has emerged as the world’s fifth-largest digitalized economy and ranks fourth globally in artificial intelligence performance, according to a new report released Friday by the ICRIER-Prosus Centre for Internet and Digital Economy (IPCIDE).

The “State of India’s Digital Economy” (SIDE) 2026 report, based on data from 71 countries, said India has outperformed several developed economies — including Germany, France, Japan, the United Kingdom and Canada — in the global AI race.

India secured the fourth position in the report’s “CHIPS-AI” index, which measures countries’ capabilities and performance in artificial intelligence.

The report highlighted a major shift in the global digital landscape, noting that 72 per cent of the world’s AI users are now based in developing countries. India and China together account for nearly two-fifths of global AI usage, it said.

India’s digitally enabled economy generated an estimated US$328 billion in trade value, according to the report. The country is also home to the world’s second-largest AI talent pool, driven by a large base of skilled technology professionals and engineers.