India and the AI ace: A strategic play

If geopolitics were like a poker game, AI chips would be the aces up every nation’s sleeve. The only exception today is that you can’t just draw one; you must build the whole deck. While key global players worldwide are busy stacking their decks, India is still figuring out how to print the cards. Responding to this imperative, India launched its AI mission last year. Even though the efforts of the government are steps in the right direction, a more holistic effort is needed across various stakeholders in the coming years to make India an AI powerhouse.

Under the mission, India has launched initiatives addressing various aspects of the Innovation landscape, from infrastructural capacity building to spurring innovation. India has allocated approximately 10,300 rupees under this mission over the coming five years. A major focus of the mission is to build high-end common computing facilities equipped with 18,693 Graphics Processing Units. To ensure access to abundant computing architecture, the Government has introduced an open GPU marketplace, enabling startups, researchers, and students to access high-performing computing architecture. Although the Indian government is making strides in fostering AI investments, the private sector’s contribution is comparatively weak, a conclusion supported by India’s ranking within the Stanford AI Index report. India ranked 8th in AI private investment, attracting $1.39 billion in 2023, compared to $67.22 billion in the US and $7.76 billion in China. Regarding AI concentration, India remains behind Israel and Singapore despite its talent pool growing by 263% since 2016. While India’s AI startup ecosystem is expanding, ranking 8th globally with 45 new AI start-ups in 2023, it still trails established innovation hubs.

Till now, India’s focus has been heavily focused on catching up rather than pioneering innovation. While countries like the US and China invest heavily in fundamental AI research, India’s AI ecosystem is dominated by service-based applications rather than groundbreaking AI model development. This over-reliance on IT services rather than fostering deep-tech innovation limits India’s ability to set global AI trends. The lack of innovation in the field is asserted by the fact that India contributes only 0.23% of the AI patents filed globally, far behind China’s 61.13%. To induce innovation in the space and build globally competitive AI models, the Indian government called for proposals from startups and researchers to build AI models specifically trained on Indian data sets. As part of this initiative, the Indian government received 67 proposals from academia and industry to build such models. Additionally, the government has developed the IndiaAI dataset platform to train the AI models, providing platform builders access to a unified repository of high-quality anonymized datasets to train their models. Building upon the government’s initiatives, a shared responsibility exists for the private sector to contribute equally to AI advancement possibly through increased collaboration with academia through joint research programs and internships to nurture fresh talent within their organization, inducing further innovation in the industry.

Beyond fostering innovation, developing an AI powerhouse demands a highly skilled workforce. Equipping this workforce with the necessary skills at all educational levels is the critical responsibility of the nation’s education system. For this very purpose, India has launched the Future Skills Prime program. The program focuses on reskilling and upskilling workers in the IT industry by offering 119 courses on AI and other technologies such as Robotic Press Automation, Augmented/Virtual Reality, and many more. To provide a platform to students, especially in Tier 2 and Tier 3 cities, the government has established Data and AI labels offering India AI fellowships to students pursuing undergraduate and postgraduate courses. However, India’s AI mission lacks initiatives to integrate AI education into the school system, a critical gap in building a future-ready workforce. Without early exposure, students miss foundational skills essential for advanced AI careers. China has been aggressive in this regard. Most recently, Beijing announced AI courses for primary and secondary school students, ensuring early exposure to AI concepts. From September 2025, schools are set to introduce AI-focused curricula, incorporating AI into after-school programs, research projects, and extracurricular activities. More than 500 universities in China already offer AI courses, and top institutions like Peking University are expanding enrolment in AI-related fields. This structured approach reflects a long-term commitment to AI dominance, ensuring that future generations are equipped with the skills necessary to compete in an AI-driven global economy.

Although equipping students with cutting-edge AI skills is crucial, India grapples with an even more pressing challenge which is on retaining its high-skilled workforce. Between 2015 and 2022, 1.3 million Indians left the country for higher salaries and advanced research infrastructure. Brain Drain significantly impacts AI development in the country as it depletes its pool of skilled professionals. This exodus weakens domestic innovation as India loses the expertise required to drive cutting-edge AI projects. This leads to companies facing talent shortages in the sector, delaying product developments and reducing global competitiveness. The onus of tackling the issue of heavy brain drain lies heavily on the private sector. The private sector must focus on by creating a conducive environment for talent retention and growth, which would curb the ongoing brain drain from the country. In addition to providing competitive salaries and career advancement opportunities, companies should foster a culture of research and experimentation within their organization. To promote R&D, firms should establish in-house innovation labs and ensure hassle-free access to cutting-edge tools for all employees.

As the global poker game intensifies, where AI is the ace, India recognizes that merely printing cards is insufficient. A full house, a winning hand, requires more than just government initiatives; it demands a concerted effort from the private sector to amplify investments and staunch the brain drain. To ensure future generations are dealt a winning hand, AI education must be integrated early on, a strategic play to secure future aces. By strategically combining these moves, and building on this solid foundation, India can transform its nascent deck into a formidable force, ready to compete at the highest table.