The Economic Survey highlights rising AI costs driven by global GPU demand and supply constraints, posing challenges to expanding India’s AI capabilities.
Other survey data show increasing adoption of AI technologies across India’s digital ecosystem, including strong use of AI features among internet users and high AI deployment in sectors like retail and IT.
Workforce and perception surveys reveal that many Indian employees believe their organisations are using AI, yet there’s significant concern that AI could replace jobs, especially among younger workers.
Economic Survey Flags Risks of India’s Reliance on Foreign AI Platforms
With services accounting for over 60% of GDP and digital technologies embedded across industries, the Economic Survey 2025-26 cautions that dependence on overseas AI platforms and infrastructure could leave India vulnerable to global trade fragmentation and geopolitical disruptions.
India Faces Rising Reliance on Foreign AI Platforms, Economic Survey Shows
Summary
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India’s increasing reliance on foreign multinational corporations for digital and AI solutions could expose the economy to geopolitical shocks, the Economic Survey 2025-26 has warned, as global trade fragmentation and technology concentration intensify.
Ahead of the Union Budget 2026, Finance Minister Nirmala Sitharaman on Thursday tabled the Economic Survey 2025-26 in Parliament noting that while India remains the world’s fastest-growing major economy, with GDP growth estimated at 7.4% in FY26, the external environment has become markedly more uncertain. Heightened geopolitical tensions, tariff actions by major economies, and tighter control over critical technologies are reshaping global supply chains and access to strategic capabilities
Although India has adopted digital and AI-based tools across sectors from finance and healthcare to logistics and public administration, the Survey underlines that much of the underlying digital infrastructure, platforms, and high-value services remain globally concentrated. This dependence matters, it argues, because technology disruptions increasingly travel through trade, capital flows, and services channels rather than only through goods.
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Data in the Survey shows India’s total exports reached a record $825.3 billion in FY25, with services exports growing 6.5% in April-December 2025, helping offset pressure from rising merchandise imports
However, services trade, particularly digitally delivered services, is more exposed to cross-border regulatory shifts, data governance rules, and geopolitical realignments.
The Survey also points to the growing role of services in the domestic economy, with services GVA rising 9.3% in the first half of FY26, reinforcing the sector’s centrality to growth.
As AI becomes rooted within these services, vulnerability to external control over platforms and technologies could have outsized economic consequences. Externally, India remains relatively insulated in the short term, with foreign exchange reserves covering over 11 months of imports and nearly 94% of external debt as of September 2025.
Yet the Survey cautions that buffers alone cannot offset structural dependencies in strategic sectors. It emphasises that the global economy is entering a phase marked by trade fragmentation and technology-led power shifts, making self-reliance in critical capabilities increasingly important.
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While it stops short of calling for technological isolation, the Survey frames strategic autonomy particularly in high-impact digital technologies as essential for sustaining growth momentum amid global volatility.
As geopolitical risks increasingly intersect with technology access, the Survey’s assessment suggests that India’s long-term competitiveness will depend not just on demand and investment, but on who controls the systems powering its digital economy.