India's AI Ambitions: Bridging the Gap Between Potential and Reality

The release of China’s DeepSeek has ignited fierce debate in India, with critics lambasting the nation’s inability to produce a comparable homegrown AI model despite its vaunted tech talent. Questions swirl: Why does a country with a $4 trillion economy and a thriving IT sector lack the state-driven ambition, infrastructure, and policy urgency to build foundational AI systems?

While China pours billions into centralized R&D and supercomputing clusters, India’s fragmented approach—reliant on underfunded startups and piecemeal policies—leaves it dependent on foreign AI tools, risking both strategic autonomy and cultural sovereignty. For many, this isn’t just a technological lag; it’s a failure to recognize that in the AI era, leadership isn’t optional—it’s existential.

India's journey in artificial intelligence (AI) development has seen notable strides, yet significant challenges persist.

1. Chronic Underinvestment in Core R&D

In March 2024, the Indian government launched the IndiaAI Mission with an initial budget of ?10,371 crores (approximately $1.2 billion) to bolster AI innovation.

Despite this initiative, India's investment remains modest compared to China's ambitious plans to invest over 10 trillion yuan (approximately $1.4 trillion) in AI development over the next six years.

Why It Matters. Without substantial state-backed investments, India risks remaining a consumer rather than a creator of foundational AI technologies. Dependence on foreign models could lead to digital colonialism, characterized by licensing fees, loss of data sovereignty, and diminished control over critical infrastructure.

2. Policy Paralysis and Fragmented Vision

India's approach to AI policy has been criticized for being reactive and fragmented. The draft AI Regulation Bill (2023) emphasizes ethical debates over innovation, and coordination between state and central agencies remains siloed. In contrast, China's centralized "whole-of-nation" strategy focuses on dominating strategic sectors and reducing reliance on Western technologies.

Why It Matters. AI is a geopolitical battleground. China's models power its surveillance state, Belt and Road influence, and autonomous weapons. India's absence in this space weakens its strategic autonomy. Relying on U.S. or European AI for defence, healthcare, or governance leaves the nation vulnerable to external shocks, such as sanctions or algorithmic bias.

3. Brain Drain: Celebrating Diaspora, Neglecting Homegrown Talent

While Indian-origin CEOs lead global tech giants like Google and Microsoft, India faces a significant brain drain.

• Elite institutions (IITs, IISc) produce world-class researchers, but many emigrate for better opportunities abroad.
• Startups like Sarvam AI or Krutrim struggle to retain talent against offers from Silicon Valley or Shenzhen.

Why It Matters. Losing top AI minds means outsourcing India's innovation pipeline. While leaders like Sundar Pichai develop advanced models internationally, India lacks the talent density to advance its own public-sector AI projects.

4. Infrastructure Deficit: No Compute, No Clout

Training advanced models requires massive computational power. China has built 14 national AI supercomputing hubs, while India's National Supercomputing Mission has deployed just 24 systems, many repurposed for non-AI tasks. Additionally, U.S. sanctions limit India's access to advanced chips, while China is advancing in semiconductor production.

Why It Matters. AI development is built on computational infrastructure. Without it, India's researchers must rely on foreign cloud services, increasing costs and risking data security. China's self-reliance ensures control over its supply chain, a strategic advantage.

5. Complacency in the Private Sector

Indian tech giants (Infosys, TCS) often prioritize IT services and outsourcing—ventures that are low-risk and high-profit. Unlike China's Tencent or Alibaba, which reinvest profits into AI research, Indian corporates often treat AI as a buzzword rather than a core focus. Startups like Ola's Krutrim are exceptions, not the norm.

Why It Matters. The private sector's risk aversion stifles disruptive innovation. While Reliance dabbles in chatbots, China's Baidu deploys advanced models to run cities. India's economy risks being trapped in a "tech coolie" model—executing others' AI ideas without inventing its own.

6. Cultural Erosion: The Cost of Outsourcing Innovation

India's AI discourse is often reduced to niche applications, while China trains its models on a rich mosaic of cultural texts. India's Bhashini project, though noble, is underfunded and fragmented. If India's cultural narratives are digitized by foreign large language models, the nation risks losing its civilizational voice in the AI age.

Why It Matters. AI shapes culture. If India's history, languages, and values are encoded in models trained on Western or Chinese data, future generations may inherit a distorted identity.

The Stark Reality

India isn't just lagging; it's conceding the AI race without a fight. China's models aren't merely disruptive; they're tools of global dominance. India's reliance on imported AI isn't pragmatism—it's a failure to recognize that in the 21st century, technological sovereignty equates to national sovereignty.

What's at Stake.

• Security. Outsourced AI in defense systems (e.g., drones, cyberwarfare) is a strategic liability.
• Economy. Licensing foreign AI drains forex reserves and stifles homegrown intellectual property creation.
• Democracy. Ceding AI leadership to authoritarian states undermines India's ability to shape ethical AI governance.

Conclusion: A Call for Urgency

India can't afford to romanticize jugaad innovations or diaspora success. To build a "DeepSeek," the nation needs.

• A war-like funding push ($10B+ over five years) for AI R&D.
• Reforms in academia to foster industry-linked AI labs.
• Chip sovereignty through fast-tracked fabrication plants and strategic partnerships.
• Mandates for corporates to invest in AI, with incentives and penalties to drive engagement.

Without these measures, India will remain a spectator in the AI revolution—a civilization that invented zero but couldn't code its future.