Despite having the largest young workforce population, several challenges hinder India in developing cutting-edge technologies
Published Date – 25 February 2025, 06:39 PM
By Dr Anudeep Gujjeti, Dr Akhil Kumar
As the US-led Open AI model and China’s DeepSeek compete to reshape the digital landscape and attain supremacy over the AI bandwagon, they are likely to influence the future of international relations, governance and strategic alliances which will shape the discourse of contemporary geopolitics.
In the 20th century, power, military might and economic influence determined the contours of international relations and shaped the global order. However, as we move further into the 21st century, the rapid advancement of technology, particularly in fields like AI, digital infrastructure and biotechnology, has begun to emerge as a defining force in shaping the future.
Paris Summit
Notwithstanding the crucial discussions around regulatory frameworks and safety measures, the recently held AI action summit in Paris emphasised leveraging AI’s vast potential with a spirit of optimism, rather than succumbing to fear or apprehension. A key item on the agenda was ensuring AI’s inclusivity, with particular emphasis on the Global South, an area where India is emerging as a leading voice.
Prime Minister Narendra Modi, who co-chaired the summit, underscored India’s vision for AI, which stressed inclusivity, transparency and accessibility. His call to “develop open-source systems that enhance trust and transparency,” “ensure access to the Global South,” and “democratise technology and create people-centric applications” reflects India’s stance on AI governance.
By advocating for an open and responsible AI ecosystem, India sought to present itself as a leader of the developing world, balancing innovation with ethical considerations. India is also pushing for inclusive AI governance to bridge the gap between the countries and working towards making a Global Partnership on Artificial Intelligence (GPAI), supported by OECD, the nodal partnership for global cooperation on AI.
US Vs China
However, the global AI race is largely dominated by two contrasting approaches between the US and China. The US, represented at the summit by Vice President JD Vance, emphasised its commitment to maintaining AI leadership through deregulation, private sector-led innovation and economic productivity. Vance’s remarks made it clear that the Donald Trump administration views excessive AI regulation as a threat to growth and national security, arguing that AI should remain “free from ideological bias” while enhancing workforce productivity. The US government has even backed a $500-billion AI infrastructure initiative, Stargate, to ensure its continued dominance in the field. Simultaneously, it refused to sign the global AI pact, emphasising its concerns about inclusive and sustainable AI.
On the other hand, China’s DeepSeek-R1 has disrupted the global AI industry, proving that advanced AI models can be developed at a significantly lower cost than previously believed. With an investment of less than $6 million for the “official training” of the model, DeepSeek managed to rival industry giants like OpenAI and Google. President Trump himself described DeepSeek’s emergence as a “wake-up call” for the US AI industry, reinforcing the urgency of AI competition between the two technological superpowers.
Global South
Where should Global South seek leadership — align with the West, led by the US, or turn to the East, led by China?
This raises an important question: In an AI-driven world, where should the Global South seek leadership? Is it more prudent to align with the West, led by the US, which is at the forefront of AI and related sectors like semiconductor design and advanced algorithms? Or is it better to turn to the East, led by China, which has proven its ability to innovate with limited resources and produce AI solutions, some of which are even open-source?
Alternatively, could India, focusing on rule-making and regulation while striving to develop its own products, emerge as a key player? After the success of the DeepSeek AI platform, Indian social media has been flooded with just one question — why cannot India do the same? What is holding back technological innovation in India? To answer this, it’s crucial to understand where India stands and whether it can prove its mettle in AI.
India Play
India’s AI mission, launched in March 2024, with Rs 10,371 crore is experiencing rapid expansion, which began with an initial deployment of 10,000 GPUs. Recently, IT Minister Ashwini Vaishnaw revealed that the initiative, driven by the India AI Compute Facility, has secured nearly 19,000 GPUs significantly surpassing initial projections. These GPUs are being procured by the central government under the IndiaAI Mission, which was sanctioned Rs 2,000 crore for 2025-26 (a fifth of the scheme’s total outlay of Rs 10,370 crore). In a report released by Nasscom, India’s AI market is expected to touch $17 billion by 2027.
With an expected launch within the next 4 to 8 months, India’s AI framework rests on four pillars: it aims to support linguistic and cultural diversity, the establishment of AI safety institutions under a unique hub and spoke model, to accelerate AI research, the government is offering computing power at a 42 per cent discount, and inviting proposals for AI model development from researchers and startups.
However, several challenges hinder India from developing cutting-edge technologies like AI, despite it having the largest young workforce population and a large pool of engineers. Finance and investment are crucial catalysts within the AI ecosystem, as they play a pivotal role in advancing other essential components such as research, infrastructure and talent development. For example, India’s share of GDP (0.6 %) in research and development is abysmal compared to countries like the US (3.4%), China (2.4%) and Israel (5.7%).
There is an urgent need to invest in research and create an ecosystem, enabled not only by the government but also by the private sector. Further, there is a lack of collaboration between academia and industry. A sustainable research ecosystem with long-term investment is the need of the hour to foster innovation.
AI demands immense computational power and specialised infrastructure, which can be cost-prohibitive for individual entities. Strategic partnerships can help mitigate this challenge by sharing infrastructure costs, creating economies of scale and improving access to critical resources such as GPUs, data centres and cloud computing services, an area where India lags. The US has already capped the sale of advanced chips to countries like India and we lag in AI and chips manufacturing.
As India’s immediate neighbour, China has taken a major lead and aspires to be the global leader in an AI-driven world. Whether India will play its role and bridge the gap with its frugality is something only time will tell, as New Delhi is set to host the next AI summit.
(Dr Anudeep Gujjeti is Assistant Professor, Center of Excellence for Geopolitics and International Studies, REVA University, & Young Leader, Pacific Forum, USA. Dr Akhil Kumar is a PhD from Department of Political Science, University of Hyderabad)