India’s AI Ambitions: Progress, Challenges, and the Global Race

G. Mudalige, Jadetimes Staff

G. Mudalige is a Jadetimes news reporter covering Technology & Innovation

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Image Source : AFP

As artificial intelligence (AI) continues to reshape industries worldwide, India finds itself in a critical position—brimming with talent and potential yet struggling to match the pace of global leaders like the United States and China. Despite being home to some of the world’s best engineers and AI researchers, India has yet to develop its own foundational language model like China's DeepSeek or OpenAI's ChatGPT. While the government has ambitious plans to support AI research and infrastructure, the question remains: is India falling behind in the AI race, or can it still carve out a leadership role in the industry?

India's AI ecosystem has seen significant growth, with over 200 startups actively working on generative AI applications. Tech giants like Microsoft and Nvidia have also expressed confidence in India’s AI potential, with Microsoft committing $3 billion to cloud and AI infrastructure. OpenAI CEO Sam Altman, after initial skepticism, has acknowledged India’s growing influence in the AI revolution. However, despite these endorsements and investments, India faces substantial challenges in catching up with AI superpowers that have had a multi-year head start. Both China and the U.S. have made massive investments in AI, integrating it into military applications, law enforcement, and large-scale research initiatives. Compared to the U.S.’s $500 billion Stargate project and China's $137 billion AI mission, India's state-funded AI initiative stands at a mere $1 billion—raising concerns about whether it can sustain long-term AI advancements.

One of the key obstacles is India's lack of a robust research and development (R&D) ecosystem. AI breakthroughs often emerge from deep academic research and corporate innovation labs, areas where India lags significantly. While the country ranks in the top five of Stanford’s AI Vibrancy Index, it has secured less than 0.5% of global AI patents between 2010 and 2022. In contrast, China and the U.S. account for 60% and 20% of AI patents, respectively. Without strong R&D support and sufficient investment in foundational AI technologies, India's progress risks being limited to application-based innovations rather than groundbreaking advancements.

Another major hurdle is the absence of high-quality, India-specific datasets required for training AI models in regional languages such as Hindi, Tamil, and Marathi. While China’s DeepSeek has demonstrated that AI models can be developed with relatively lower costs using older hardware, the reality remains that DeepSeek had substantial financial backing. India’s AI sector, by contrast, still lacks the kind of patient capital needed for large-scale AI model development. This funding gap has further been exacerbated by India's outsourcing industry, which has primarily focused on service-based work rather than investing in foundational AI research.

Despite these challenges, India retains a key advantage—its vast pool of AI talent. Indian professionals make up 15% of the global AI workforce, but a significant portion of them migrate to countries with better research opportunities. To reverse this brain drain and establish AI leadership, India must replicate the success of its digital payments revolution, which thrived due to strong collaboration between the government, industry, and academia. A similar approach in AI could accelerate progress and ensure India remains competitive in the global AI landscape. However, unless these fundamental issues are addressed, India risks falling further behind in the race for AI supremacy.