MUMBAI: A new global gold rush has begun. It’s not for a precious metal, but for something far more transformative: Generative Artificial Intelligence. This technology, which can create everything from poetry to complex computer code, isn’t just another tech trend; it’s a seismic shift reshaping the world economy. The numbers are staggering. A recent McKinsey study estimates that Gen-AI could inject up to $4.4 trillion into the global economy annually—that’s like adding another United Kingdom to the world’s GDP every single year.
The AI market itself is predicted to multiply sevenfold this decade, exploding from $233 billion to nearly $1.8 trillion. For India, a nation that has built its modern economic identity on the bedrock of technology and services, this isn’t just an opportunity; it’s a destiny-defining moment. We are at a critical juncture where the right moves could cement our position as a global leader for the next century, while inaction could leave us dependent on foreign powers for the core technology of the future. The question is no longer if AI will change the world, but who will write the rules of this new era. India must be a lead author.
THE GLOBAL AI GOLD RUSH: AN INDIAN ADVANTAGE
The incredible economic forecasts for AI are not just abstract numbers; they translate directly into productivity and growth. Oxford Economics projects that advanced economies could see their GDPs jump by as much as 4% by 2032 thanks to AI. For India, with a relatively low base of automation, the potential for a productivity “kicker” is even higher. We have a massive workforce that can be supercharged by AI tools, delivering a far greater marginal return on investment.
Crucially, the sectors where Gen-AI is expected to create the most value— customer operations, marketing, software engineering, and R&D—are precisely the areas where India already has established global dominance. Our $194 billion IT-BPM industry is the engine room of the world’s corporations. Gen-AI can amplify this strength exponentially. Imagine our world-class software engineers, armed with AI co-pilots, writing code at twice the speed. Picture our customer service hubs using AI to offer hyper-personalized support in any language. Nasscom and McKinsey estimate this AI-driven evolution could boost the value delivered by each employee by 20- 35%, creating an additional $50-70 billion in new, highvalue service lines by 2030. This is our natural advantage, and it’s ours to lose.
THE NEW GEOPOLITICS OF TECHNOLOGY: AN ‘AMERICA FIRST’ AI DOCTRINE
However, this golden opportunity is unfolding in a world fractured by new and aggressive geopolitical realities. The global supply chain for the most critical component of AI—advanced semiconductor chips or GPUs—has become a battleground. This is no longer just a quiet rivalry between the US and China. The new US administration has laid its cards on the table with its “Winning the AI Race” action plan. This is an explicit “America First” doctrine for technology, designed to “sustain and enhance America’s global AI dominance.”
This policy intensifies the existing chip war into a global strategic campaign. It combines aggressive deregulation and fast-tracked permits for data centers at home with a plan to export a complete “American AI Technology Stack”—hardware, models, and software—to its allies. The goal is clear: to create a world where American technology is the global standard, ensuring a new form of dependency. For nations like India, the offer is tempting: easy access to a full suite of AI tools, but at the cost of being locked into a foreign ecosystem. This doctrine is backed by sharp economic threats. The rhetoric has escalated from tariffs to “sanctions,” with proposals for levies as high as 50% on Indian goods. This directly threatens our tech services sector and makes the cost of relying on imported American hardware dangerously unpredictable.
The existing problem of GPU hoarding by US hyperscalers is now revealed to be not just a market dynamic, but a core part of a national strategy. This has led to a stark realization globally: depending on another nation for the core infrastructure of AI is a profound strategic vulnerability. In response, nations are building digital fortresses. Europe has its “AI Continent Action Plan,” and South Korea is fast-tracking its own models. For India, “Sovereign AI”—the capability to develop, deploy, and control our own AI infrastructure, data, and models—is no longer a choice but an urgent, non-negotiable necessity for survival in this new world.
INDIA’S PATH TO AI LEADERSHIP: A PRESCRIPTIVE GUIDE
Fortunately, the Indian government has recognized this challenge. The Rs 10,370 crore ($1.25 billion) IndiaAI Mission is a crucial first step. The plan to install 18,000 high-end GPUs for shared public access by 2026 is a bold statement of intent. While this represents only about 4% of today’s global public capacity, it’s a vital seed that, if nurtured correctly, can blossom into a self-reliant ecosystem. So, how do we build on this foundation? The path forward requires a multipronged, mission-mode approach.
First, we must leverage our unparalleled data advantage. Data is the lifeblood of AI. While we may not have the most chips, we have what is arguably the world’s richest and most diverse dataset. India generates a colossal amount of mobile data, conducts 8 billion UPI transactions a month, and is building the world’s largest public digital health stack. Finetuning AI models on this unique, non-replicable corpus of Indian data, languages, and contexts is our secret weapon. An AI that understands the nuances of a farmer in rural Maharashtra or a shopkeeper in Tamil Nadu cannot be easily replicated in a lab in Silicon Valley. Second, we must win the language battle.
The dominant models from OpenAI and Google are notoriously inaccurate in Indic languages, failing to serve the 90% of Indians who don’t use English daily. This is not a weakness, but a massive market opportunity. We must champion our domestic champions—like Sarvam, Krutrim, and the Bhashini initiative—to build foundational models that are truly Indian. Third, we must create a vibrant ecosystem for innovation. While our AI start-ups raised only $1.2 billion last year compared to $15 billion in the US, targeted sovereign capital can bridge this gap. The proposed $1.5 billion IndiaAI Innovation Fund is exactly the kind of catalyst needed to “crowd-in” private investment.
Furthermore, the proposed “AI Grid” is a masterstroke. By allowing start-ups to rent computational power at a fraction of the cost of global providers, we can slash the biggest barrier to entry and unleash a wave of grassroots innovation. Fourth, we must play to our strengths in chip design. While we don’t manufacture the most advanced chips, we design them. With nearly 60% of the world’s VLSI design engineers based in India, we are the intellectual backbone of the semiconductor industry. We must leverage this talent to co-develop costoptimized AI accelerators, designing chips specifically for Indian use-cases, particularly for “Edge-AI”running smaller, efficient models on devices in the hands of our 650 million feature phone users and 25 million kirana store owners.
Finally, this all must culminate in what can only be described as an “India Stack moment” for AI. We must replicate the success of UPI and Aadhaar platforms that unlocked unprecedented innovation.
This means open-sourcing our foundational Indic LLMs, mandating interoperability through APIs, and subsidizing compute power for social-impact projects in health, agriculture, and education. By taking these steps, we can build a resilient domestic AI ecosystem that is insulated from global shocks.More than that, we can become the default AI partner for the Global South. We can export affordable, relevant AI solutions to Africa, Southeast Asia, and Latin America, creating a projected $40 billion market. The road ahead is challenging. It requires immense investment, strategic focus, and a national will to succeed. But the prize is nothing less than a generational opportunity to define our economic future. We have the data, the talent, and the ambition. Now is the time for execution. Now is India’s AI moment.
Brijesh Singh is a senior IPS officer and an author (@ brijeshbsingh on X). His latest book on ancient India, “The Cloud Chariot” (Penguin) is out on stands. Views are personal.
