India can lead in AI—but only with a well crafted strategic plan

Apart from political leaders, some of the biggest names of the technology world are descending for the summit, reposing confidence in India’s promising tech market and capabilities while also elevating our global relations. Further, the last few weeks witnessed some major trade deals that India clinched with the EU and US. This sent a strong signal to the global business and technology community about India.

India has grown from an agrarian developing economy into one that will soon rank as the world’s fourth-largest. As a technology services powerhouse, India created an industry that employs millions of people and dramatically changed the direction of its economy.

Indigenous AI companies are demonstrating India’s capacity for innovation at scale. Indian agritech innovators are deploying solutions in local dialects, solving challenges unique to the Indian landscape. Homegrown enterprises are serving clients worldwide with AI solutions. Numerous AI-based startups are revolutionizing healthcare, banking, education, services, defence and virtually all other sectors.

But the opportunity is massive and fast-evolving. The Niti Aayog’s just- released Frontier Tech Hub report on ‘Technology Services—Reimagination Ahead’ outlines how India’s $265 billion technology services sector can scale to $750–850 billion by 2035 while strengthening global competitiveness in the AI era.

The roadmap highlights that AI marks a structural shift in the industry: value will move from labour-arbitrage services to intellectual property-led, outcome-oriented and platform-driven delivery models. India has an opportunity to evolve from services leadership to global leadership in the creation of AI-native systems.

Turning ambition into leadership requires strategic intervention. Over the past year, it has become evident that while the use of AI tools can be widespread, the frontier of AI is highly concentrated. The development and training of advanced foundational models is increasingly capital, compute, data and energy intensive.

Some announcements made recently clearly reflect India’s intention to build a strong AI ecosystem. These measures expect AI infrastructure to act as an engine for achieving Viksit Bharat by 2047. A tax holiday extending till then for foreign companies providing cloud services globally using Indian data centres is aimed at building critical data infrastructure for digital leadership.

Similarly, extension of the Semiconductor Mission reflects an ambition to become an AI compute hub and achieve self-reliance in related physical infrastructure. The doubling of the Electronics Components Manufacturing Scheme’s allocation will enable self-sufficiency across the country’s technology stack—from AI-optimized processors to foundational models and applications.

This integrated vision recognizes that AI leadership requires owning critical layers of the value chain and not just participating in isolated segments. Our AI-readiness rank reflects systematic progress across all five layers of the AI architecture: applications, models, chips, infrastructure and energy.

Also, for leadership in AI, extensive investments need to be made in R&D and building an AI-ready talent pool. Entities with property rights to innovations have premium valuations. Hence Indian industry and startups should make good use of the Research, Development and Innovation Fund that was announced by the government to come up with breakthrough applications.

Early evidence on potential job losses due to AI may be a worry in the near term, especially for a labour-abundant economy like India’s. Nonetheless, given our large workforce, we need to have skilling, reskilling and workforce redeployment avenues to ensure a smooth tech-led transition.

With AI changing the way global economies and societies operate, India stands at yet another pivotal juncture to create a new chapter in its economic and development history.

The AI revolution offers us a chance to rewrite the software industry’s script as it represents an opportunity to transform a service provider into an AI innovator. From the semiconductor mission to data centre incentives, our policy framework is designed for India to act as an architect of this tech revolution rather than just a participant.

The AI Summit in New Delhi brings together the world’s foremost technologists, investors and policymakers. It is an opportunity to translate vision into action, forge valuable partnerships, build collaborations and get investments. Most importantly, it offers a platform for the world to arrive at a framework consensus on ethical, responsible and inclusive AI.

By 2030, AI is projected to add nearly $15.7 trillion to global GDP. Its adoption advocates expect it to unlock unprecedented productivity gains and accelerate innovation across sectors. India could use the summit to drive the global AI agenda and seize the massive opportunity it presents.

The author is president, Ficci.