In the Global Quest for AI Dominance, India Needs to Chart its Own Course

India stands at a crucial crossroads in its technological journey, with the potential to not only advance its AI capabilities but to reshape the global landscape. The road ahead offers immense opportunities for economic growth and global leadership, positioning India as a key player in the future of AI. What’s at stake is not merely participation in the AI race, but the opportunity to drive the next wave of innovation and contribute meaningfully to the global AI narrative.

Imagining the Future

AI is expected to impact over 30mn jobs in India by 2030, transforming industries and workforce dynamics. India’s ability to develop its own AI solutions and invest in research will determine whether it leads the future. The government’s recent initiatives, including Rs 20,000 crore allocated for R&D and deep tech in the Union Budget 2025, reflect a strong commitment to AI’s future. Funding for the IndiaAI Mission has surged from Rs 173 crore to Rs 2,000 crore, signalling a shift toward local AI models. These investments aim to integrate AI across governance, urban planning and national security. However, India’s continued reliance on western AI frameworks raises concerns over data sovereignty, algorithmic biases and ethical governance; issues that can only be addressed with homegrown solutions.

Despite these challenges, India’s AI ecosystem is rapidly growing, fueled by a thriving start-up culture and an expanding talent pool. The government’s emphasis on AI innovation ensures that adoption isn’t just about importing foreign solutions but nurturing domestic capabilities. Yet, India’s current R&D spending stands at just 0.5% of its GDP. To fully realise its potential as an AI leader, India must accelerate investments in local innovation and reduce reliance on foreign technologies. This is the next crucial step in shaping its AI destiny. AI is already transforming sectors like health care, agriculture, banking, financial services and insurance (BFSI), retail, education, energy and cybersecurity, among others.

AI-powered diagnostics are revolutionising health care, precision agriculture is boosting food production, automation is enhancing manufacturing and AI-driven security solutions are strengthening national defence. India is moving beyond merely adopting AI to creating solutions that are tailored to its needs and contributing to the global AI ecosystem.

Doubling Down on AI Investments

The economic implications of AI are profound, particularly in how it will reshape the job market. While concerns about job displacement persist, we can expect to enhance productivity rather than reduce employment opportunities. Instead of eliminating jobs, AI will redefine them, boosting efficiency across sectors. For example, the IT industry could see productivity increases of up to 45%, with software development efficiency improving by 60%. In manufacturing, AI-driven predictive maintenance and automation are projected to enhance production efficiency by 20–30%, reducing maintenance costs by up to 30% and unplanned downtime by 45%. In health care, AI applications in diagnostics and patient care could improve operational efficiency with generative AI expected to boost productivity in non-clinical and clinical operations by 30–32%.

To fully capitalise on these gains, India’s workforce must be equipped with the necessary skills. The government’s focus on AI education, through platforms, university programmes and industry collaborations, is essential. However, this upskilling effort must extend beyond metros to ensure equitable access to AI education nationwide.

India is on the path to AI leadership, but challenges like data privacy and regulatory gaps need attention. A strong governance model is key to addressing risks like algorithmic bias and security issues, while clear AI regulations will support ethical use and innovation. Public-private partnerships, AI venture funds and global collaborations will help drive growth and strengthen India’s position.

As we transition from an IT services hub to a technology leader, decisive action is needed. This involves reinforcing regulatory frameworks, investing in data infrastructure and prioritising ethical AI. With expanding digital infrastructure, government backing and world-class talent, India’s AI moment is unfolding. The path to leadership is clear; the question is no longer whether we will lead, but how decisively we will claim our place at the forefront of the global AI revolution.

The writer is chief executive—IT staffing, FirstMeridian Business Services. Views are personal.