Artificial intelligence (AI) has become one of the most important forces shaping economic growth, productivity and employment. This paper examines the relationship between AI and India's present economic condition. Using secondary data from the Ministry of Statistics and Programme Implementation, the Reserve Bank of India, NITI Aayog, the IndiaAI Mission and industry reports, it analyses India's macroeconomic position, public policy on AI, private investment in AI infrastructure, the AI ecosystem, the potential contribution of AI to GDP, and its likely effects on employment. The analysis shows that India adopts AI from a position of macroeconomic strength: real GDP grew by 7.7 per cent in 2025–26, inflation was low through 2025, and the fiscal deficit is falling. The government's IndiaAI Mission, with an outlay of ₹10,371.92 crore, has provisioned more than 38,000 GPUs, although actual fund releases have been slow. Private commitments have been far larger: Amazon, Microsoft and Google alone have pledged about US$67.5 billion, and commitments of over US$200 billion were announced at the India AI Impact Summit of February 2026. NITI Aayog estimates that AI could add up to US$1.9 trillion to India's GDP by 2035 and help close 30–35 per cent of the gap to an 8 per cent growth path. At the same time, AI threatens jobs in the IT and customer service sectors that have been central to India's services-led growth, with up to 1.5 million tech jobs at risk by 2031 if no action is taken. The paper concludes that AI can strengthen India's growth only if investment in compute and data is matched by large-scale reskilling, wider diffusion of AI to MSMEs and agriculture, and a governance framework that protects workers and citizens.