Economy · India

AI Capex Slowdown May Harm India's Economic Recovery, Nuvama Warns

A slowdown in capital expenditure (capex) related to Artificial Intelligence (AI) could jeopardize India's economic recovery and negatively impact growth, according to a report by Nuvama. The report notes that while corporate revenue growth has reached approximately 20% year-on-year and aggregate credit growth is around 15%, these positive trends are partly supported by domestic measures like GST cuts and monetary easing, as well as the global commodity and AI capex boom. A deceleration in AI investment could therefore disrupt this cyclical recovery.

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