India's Strategic Push to Catch Up in the Global AI Race

India's AI Ambitions: Frugal Innovation and Talent Pool

India is making a strategic push to catch up in the global artificial intelligence (AI) race, leveraging its tradition of "frugal innovation" and vast tech talent pool. Prime Minister Narendra Modi's government, along with start-up founders and policymakers, believes that India can compete in AI by creating cost-effective large language models (LLMs) trained on Indian languages and developing AI applications to solve specific problems 1

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Government Initiatives and Funding

The Indian government has launched a five-year $1.2 billion AI strategy, making 10,000 graphic processing units (GPUs) available to researchers and start-ups. Abhishek Singh, leader of the government's AI mission, is currently evaluating 67 bids from tech start-ups and research labs seeking funding for domestic AI models 1

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. This initiative aims to create a homegrown rival to China's DeepSeek, which claims to have built a competitive model at a fraction of the usual cost.

Challenges and Opportunities

Despite India's efforts, the country faces significant challenges in catching up with AI leaders like the US and China. Of the $43 billion worth of AI investments made globally in 2024, India garnered just $179.3 million, compared to China's $3.3 billion and the US's $34.2 billion 1

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. However, India leads globally in AI hiring growth, recording a 33.39% year-over-year increase in 2024, and has seen the highest increase in AI talent concentration between 2016 and 2024 at 252% 2

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Private Sector Involvement

Indian tech giants have announced relatively little major investment in AI compared to their global peers. However, some start-ups are making strides:

1. Sarvam AI, a Bengaluru-based start-up, is working on a larger LLM after launching its first model, Sarvam 1, last year 1

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2. Paras Chopra, an Indian tech entrepreneur, has started funding AI research in the country using his own money 1

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India's Unique Approach

Amitabh Kant, former NITI Aayog CEO, emphasizes India's potential "second-mover advantage" in the AI race:

1. India is well-positioned to leverage its digital infrastructure and vast developer community 2

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2. The country's focus is on building applications on top of leading models and demonstrating practical AI use at scale 1

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AI Adoption and Future Prospects

According to CPA Australia's Business Technology Report 2024, 23% of Indian businesses have already adopted AI – the highest among surveyed countries – and 73% plan to scale up AI usage in 2025 2

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. This adoption rate, combined with over 500,000 engineers and the world's second-largest developer community, positions India to play a significant role in the global AI landscape.

Balancing Innovation and Responsibility

As India pushes forward in AI development, there is a growing awareness of the need to balance innovation with responsible use. Kant warns of the social risks posed by unchecked algorithms and calls for international governance frameworks 2

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. This approach aligns with India's goal of not just catching up in AI technology but also contributing to its ethical and practical implementation on a global scale.