India's AI Competitive Edge: Strategies for Victory in the Global AI Race, as suggested by Manish Tewari

In the global race for artificial intelligence (AI) supremacy, India finds itself lagging behind. At the recent Munich Security Conference, US Vice-President J.D. Vance criticized European leaders for their duplicity regarding democratic principles, but his comments could just as easily been directed towards India's leadership.

India accounts for less than two per cent of global computing infrastructure, a stark contrast to the US and China, which together control nearly 60 per cent. The country's slow progress in AI can be attributed to fragmented policies, insufficient investment, and bureaucratic roadblocks that discourage private investment in deep tech and AI startups.

Without a clear strategy and a sense of urgency, India risks falling further behind. The absence of venture capital, a low-risk appetite, and limited government-backed incentives continue to stifle AI innovation. The India AI Mission, designed to bolster AI research, has funding that remains modest compared to global investments.

In 2023, Indian AI startups raised just 8.2 million dollars in April-June, a 91 per cent drop from the previous quarter. This decline in startup funding is particularly concerning, as nations worldwide are investing heavily in AI, recognizing it as a cornerstone of future economic and military strength.

The EU launched a 47 billion dollars semiconductor initiative, while the US committed 52 billion dollars to semiconductor R&D through the CHIPS and Science Act in 2022. China aims to invest 150 billion dollars in AI by 2030, and the US witnessed a dramatic surge in federal AI contracts from 355 million dollars in 2022 to 4.6 billion dollars in 2023.

Developed nations rely more on private-sector contributions to drive AI innovation compared to India's government-driven approach. The Ministry of Electronics and Information Technology (MeitY) in India reduced the budget for the India AI Mission from ₹551.75 crore to ₹173 crore in 2024 and proposed an increased budget estimate of ₹2,000 crore for 2025-26. However, total AI funding in India fell from 554.7 million dollars in 2022 to just 113.4 million dollars in 2023.

India's AI research output is also disappointing. A report by Change Engine ranks India 14th in AI research contributions, accounting for just 1.4 per cent of the global total. Experts suggest that India must boost its AI research output by at least 50 per cent over the next five years to secure a competitive position.

India's reliance on foreign cloud providers makes its AI growth vulnerable to geopolitical shifts. The country lacks a comprehensive semiconductor strategy compared to countries like Taiwan, South Korea, and the US. This lack of self-reliance in semiconductor manufacturing, coupled with policy uncertainties and bureaucratic delays, hinders progress.

If India does not take bold and decisive action now, it will be relegated to the sidelines of the AI revolution, relying on foreign nations for essential technology. The time for hesitation is over. India must act swiftly to secure its place in the future of AI or risk long-term technological irrelevance.

India allocates only 0.64 per cent of its GDP to R&D, significantly lower than China's 2.41 per cent and the over 4-5 per cent spent by nations like Israel and South Korea. India's inability to invest in R&D and foster effective public-private partnerships in AI progress is a significant obstacle.

The Paris AI Summit 2023 reinforced AI's growing role in international diplomacy and power dynamics. The Trump administration did not sign the Paris Declaration on AI cooperation, indicating a competitive approach to the political and geo-strategic race for AI supremacy. Meanwhile, Saudi Arabia recently announced a 40 billion dollars AI fund, and China has a significant lead in AI patents, with over 38,000 filings in generative AI, six times more than the US.

In conclusion, India's struggle in the global AI race is a matter of national concern. The country must address its fragmented policies, insufficient investment, and bureaucratic roadblocks to encourage private investment in deep tech and AI startups. India must also boost its AI research output, invest in semiconductor manufacturing, and increase its R&D budget to secure a competitive position in the global AI landscape. The time for action is now.

India's AI Competitive Edge: Strategies for Victory in the Global AI Race, as suggested by Manish Tewari