Policy Update
Deepankshi Agnihotry
“India is already reshaping our polity, our economy, our security, and even our society. AI is writing the code for humanity in this century.” These words spoken by PM Shri Narendra Modi, at the AI Action Summit in Paris, where India co-chaired with France, highlights the nation’s growing role in shaping the future of artificial intelligence.
The ever-growing importance of AI is undeniable, but with the launch of DeepSeek, a global shockwave has been triggered, a wake-up call for nations to accelerate their AI advancements if they wish to remain in the race for global supremacy.
To assume that India lags in this AI revolution, as it did during previous industrial revolutions, would be a critical misjudgment. Even if not operating under a full-fledged AI mission, India’s AI foundations have been in place for over a decade, beginning with the launch of Aadhaar in 2009—a landmark step in building India’s Digital Public Infrastructure (DPI).
The G20 Task Force Report on DPI highlighted India’s pioneering role in achieving the three pillars of Digital Public Infrastructure (DPI) through India Stack. Aadhaar-based biometric authentication established a scalable and inclusive digital identity framework. The UPI payments revolution set global benchmarks, with 16.73 billion transactions worth ₹23.25 lakh crore recorded in December 2024 (NPCI). Additionally, India’s Data Empowerment and Protection Architecture (DEPA) has enabled secure, consent-based data sharing, enhancing public service delivery, especially during crises like COVID-19.With these strong foundations, India is well-positioned to lead the AI revolution, ensuring its digital advancements align with ethical governance, economic empowerment, and global competitiveness.
IndiaAI Mission: Advancing India’s AI Ecosystem
As outlined in NITI Aayog’s National Strategy for Artificial Intelligence under the vision #AIForAll, AI enables machines to think, perceive, learn, solve problems, and make decisions. Initially developed to mimic human intelligence, AI has now advanced far beyond its original scope, transforming industries through innovations in data collection, processing, and computational power, thereby enhancing efficiency, connectivity, and productivity.
To harness AI’s transformative potential, the Government of India launched the IndiaAI Mission on March 7, 2024, with a focus on strengthening India’s global AI leadership and ensuring its benefits reach all segments of society. The Ministry of Electronics and Information Technology (MeitY) has been entrusted with its implementation. The Union Budget 2025-26 has allocated ₹2,000 crore for the IndiaAI Mission, constituting one-fifth of its total outlay of ₹10,370 crore, demonstrating the government’s commitment to fostering AI-driven innovation and national progress.
Core Features of the IndiaAI Mission
The mission is designed to create a robust and inclusive AI ecosystem by focusing on the following key aspects:
- Expanding Computing Access
- Enhancing Data Quality
- Building Indigenous AI Capabilities
- Attracting and Developing Talent
- Fostering Industry Collaboration
- Supporting AI Startups
- Ensuring Ethical and Socially Impactful AI
With a forward-looking and inclusive approach, the IndiaAI Mission is set to propel India to the forefront of AI innovation, ensuring AI-driven advancements benefit society while upholding ethical governance standards through its seven pillars.
1. IndiaAI Compute Capacity: Building a Scalable AI Ecosystem
Source-GPU
As part of the IndiaAI Mission, this pillar aims to develop a scalable AI computing ecosystem to support India’s AI startups and research community while boosting the semiconductor industry. A state-of-the-art AI compute infrastructure with 18,000+ GPUs is being established through public-private partnerships. Union Minister Ashwini Vaishnaw announced subsidized AI compute access, reducing costs by up to 40% for eligible users. Of 19 bidders, 10 were selected, offering AI compute units like Intel Gaudi 2, AMD MI300X/MI325X, NVIDIA H100/H200/A100/L40S/L4, AWS Inferentia2, AWS Tranium, and 8 NVIDIA/AMD GPU modules. This initiative enhances cost-effective AI access, empowering startups and accelerating innovation.
2. IndiaAI Innovation Centre: Driving Indigenous AI Advancements
India, a founding member of the Global Partnership on Artificial Intelligence (GPAI), continues to shape responsible AI development. The GPAI Summit at Bharat Mandapam, New Delhi, brought together 28 member countries and the EU to drive AI innovation. Under the IndiaAI Mission, the Innovation Centre will develop foundational AI models, focusing on indigenous Large Multimodal Models and domain-specific AI solutions for high-resource sectors like Governance, Healthcare, Agriculture, Sustainability, and Manufacturing. By advancing AI research and deployment, the IndiaAI Innovation Centre aims to boost India’s self-reliance and global competitiveness in AI.
3. IndiaAI Datasets Platform: Enabling AI Innovation through Quality Data
The IndiaAI Datasets Platform is set to transform AI research and innovation by providing structured, AI-ready datasets for Indian startups, researchers, and enterprises. By enabling seamless data discoverability, accessibility, and utilization, it will drive advancements in machine learning, NLP, computer vision, and generative AI.
Key initiatives include AI4Bharat (IIT Madras), dedicated to advancing AI in Indian languages through transliteration, NLP, machine translation, automatic speech recognition, and speech synthesis. The Indian government has made datasets like NFHS-5 (National Family Health Survey-5) and GYTS-4 (Global Youth Tobacco Survey-4) publicly available for AI-driven analysis. The National Data Governance Framework Policy aims to enhance data accessibility, security, and standardization for AI applications.
The Indian Local Governance Directory assists state departments in updating and managing administrative data, including newly created panchayats, local bodies, and rural-urban reorganization. NITI Aayog’s National Data & Analytics Platform (NDAP) democratizes public data by making it accessible, interoperable, interactive, and user-friendly for AI and data-driven decision-making.
By ensuring structured, ethical, and secure access to diverse datasets, the IndiaAI Datasets Platform will catalyze innovation, empower AI researchers, startups, and enterprises, and drive AI adoption in key sectors like governance, healthcare, agriculture, sustainability, and education, making India a global leader in AI-driven transformation.
4. IndiaAI Application Development Initiative: Driving AI Solutions for Real-World Challenges
The IndiaAI Application Development Initiative is designed to support, scale, and promote AI-driven solutions that address critical real-world challenges. It will gather problem statements from Central Ministries, State Departments, and key institutions, inviting AI researchers, innovators, and startups to develop and deploy solutions for these challenges.
A key collaboration under this initiative is with the Indian Cybercrime Coordination Centre (I4C), established by the Ministry of Home Affairs. As part of this effort, the CyberGuard AI Hackathon has been launched to enhance AI-driven efficiencies in cybercrime prevention, detection, investigation, and prosecution, ultimately strengthening citizen safety and welfare.
5. IndiaAI FutureSkills: Building a Robust AI Talent Pipeline
The IndiaAI FutureSkills initiative is dedicated to equipping India’s workforce for the AI revolution by expanding AI education, accessibility, and industry-aligned training. It focuses on expanding AI courses at the undergraduate, postgraduate, and Ph.D. levels, while ensuring widespread AI accessibility by establishing Data and AI Labs in Tier 2 and Tier 3 cities. The FutureSkills Platform, a collaboration with industry stakeholders, has already enrolled 8.6 lakh candidates in AI training programs tailored to industry needs.
To decentralize AI resources, AI Data Labs, 5G Labs, and Semiconductor Training Facilities are being set up in cities like Gorakhpur, Lucknow, Shimla, Aurangabad, Patna, Buxar, and Muzaffarpur. The Responsible AI for Youth Initiative is fostering early AI adoption in government schools, training 50,000+ students under Intel AI coaches.
Additionally, multiple Centers of Excellence (CoEs) in emerging technologies have been established, alongside the National Mission on Interdisciplinary Cyber-Physical Systems, led by the Department of Science and Technology, to promote R&D, human resource development, technology, entrepreneurship, and international collaboration.
Reinforcing India’s commitment to AI-driven societal impact, the RAISE 2020 summit, a first-of-its-kind global AI conference, emphasized Responsible AI for Social Empowerment, positioning India as a leader in ethical and inclusive AI innovation.
6. IndiaAI Startup Financing: Accelerating India’s AI Ecosystem
The IndiaAI Startup Financing pillar accelerates India’s AI ecosystem by providing strategic funding support to deep-tech startups, fostering entrepreneurial growth in AI. India’s Generative AI (GenAI) startup landscape has seen rapid expansion, with over 17 Indic and sector-specific AI models, a 4.6X surge in GenAI services startups, and $760 million in funding received in the first half of 2024—marking a significant rise from 2021 (Statista).
To bolster AI-driven entrepreneurship, key initiatives include IIMA Ventures (IIM Ahmedabad) supporting early-stage startups with government backing, T-Hub (Telangana), the world’s largest innovation hub collaborating with IIT Hyderabad, ISB, and industry leaders, and JioGenNext (Reliance Industries), facilitating startup growth through its Mentor Acceleration Program (MAP). Additionally, India Accelerator (founded in 2017) nurtures early-stage AI startups in content creation, automated workflows, and data generation, while SenseAI, an AI-focused venture fund, helps AI founders scale their innovations. With AI projected to add $15.7 trillion to the global economy by 2030, every second startup in India now integrates AI, underscoring its transformative role in the startup ecosystem.
7. Safe & Trusted AI: Ensuring Ethical AI Development
As AI advances, responsible regulation is essential to ensure ethical development. The Montreal Declaration for the Responsible Development of AI emphasizes six key principles, including fairness, non-discrimination, safety, reliability, privacy, security, and socially beneficial impact. The Safe & Trusted AI pillar focuses on implementing Responsible AI projects, developing indigenous AI tools and governance frameworks, creating self-assessment checklists for AI innovators, and establishing guidelines for responsible AI deployment. Under this initiative, IndiaAI has selected eight Responsible AI projects in response to the Expression of Interest (EoI), ensuring AI development aligns with ethical, secure, and fair practices.
India’s AI-Driven Future: Growth, Workforce, and Strategic Advancements
For enhancing AI capabilities, the Union Budget 2025 has allocated significant funds to boost AI research, infrastructure, and education. In addition to IndiaAI mission, ₹500 crore has been allocated to establish Centers of Excellence (CoEs) in AI for Education, focusing on sectors like agriculture, healthcare, and smart cities. To support deep-tech innovations and private sector R&D, the Department of Science & Technology has been granted ₹20,000 crore, ensuring advancements in AI-driven solutions. Strengthening India’s semiconductor and mobile production industry, ₹7,000 crore has been allocated to boost domestic manufacturing, essential for AI hardware development.
Moreover, AI-powered Global Capability Centers (GCCs) are being expanded in Tier-2 cities like Bengaluru, Delhi, and Chennai, fostering a decentralized tech ecosystem. These strategic investments, coupled with India’s focus on responsible AI development and deployment, position the country as a global AI hub, driving innovation and economic growth.
The Economic Survey 2024-25 envisions AI as a catalyst for workforce augmentation and inclusive growth, advocating a scalable AI adoption model focused on reliability, infrastructure readiness, and efficiency. Emphasizing “Augmented Intelligence,” it calls for government-industry-academia collaboration to balance technological innovation with social responsibility, ensuring a just AI revolution.
A key enabler is AI-specific cloud infrastructure, including high-performance supercomputing under AIRAWAT (AI Research, Analytics, and knowledge Assimilation platform). The National Institute of Robotics & Artificial Intelligence (NIRA), established in 2019, pioneers the Digital University model, democratizing AI and robotics education to nurture future innovators.
Strategic initiatives like the Indian Semiconductor Mission further strengthen India’s AI ecosystem. AI’s integration across public administration, cybersecurity, agriculture, and markets is fueling job demand.AI-driven education, automation, and upskilling will enhance workforce productivity, positioning India as a global leader in AI-driven sustainable growth and innovation.
Made With Canva-AI in Various Sectors
Challenges of AI: Ethical, Social, and Infrastructural Concerns
While AI presents transformative potential, its widespread adoption comes with significant challenges that must be addressed for sustainable and responsible growth.
1. Ethical Concerns: Bias, Privacy, and Human Judgment
According to Michael Sandel, AI raises three major ethical concerns: privacy and surveillance, bias and discrimination, and the role of human judgment. Algorithmic decision-making in areas like hiring, parole, and lending can perpetuate biases, giving them a misleading sense of scientific credibility. The lack of human oversight in critical decision-making raises concerns about fairness and accountability.
2. Declining Critical Thinking and Human Connection
Excessive reliance on AI, including large language models (LLMs) and recommendation algorithms, risks reducing critical thinking and fostering intellectual dependence. Moreover, increased human-AI interaction may weaken genuine social connections, replacing authentic conversations with automated responses.
3. AI’s Environmental Impact
The rise of data mining, machine learning, and supercomputing significantly increases energy consumption, contributing to climate change. AI data centers require vast amounts of electricity and water for cooling, highlighting the urgent need for green AI solutions with minimal environmental impact.
4. Workforce Displacement and Job Security
Automation threatens job security, particularly in construction, logistics, and customer service, where AI-driven drones, robotics, and virtual simulations are replacing traditional roles. A lack of human oversight in AI applications may also lead to inefficiencies in areas requiring nuanced decision-making.
5. AI’s Carbon Footprint and Sustainability Concerns
AI-driven operations demand extensive computational power, leading to a high carbon footprint. Sustainable AI development requires energy-efficient models and eco-friendly computing solutions to mitigate its impact on climate change.
6. Data Security and Privacy Risks
AI systems process vast amounts of confidential and personal data, raising cybersecurity and privacy concerns. Automated systems may increase exposure to geopolitical risks, cyberattacks, and data breaches, necessitating stronger data protection regulations.
7. Misuse and Over-Reliance on AI
AI and machine learning solutions, when hastily adopted or misapplied, can lead to ineffective or even harmful results. Many AI models require extensive testing and refinement, and their reliability can only be assessed over multiple generations.
8. Skill Gap and Workforce Readiness
AI adoption is hindered by a shortage of skilled professionals. Emerging technologies require specialized training, yet there is a significant gap in AI expertise and technical workforce readiness.
9. Infrastructure and Investment Gaps
AI and cloud computing are interdependent, yet many regions lack the necessary AI infrastructure. Cloud-based AI models enable scalability, but without adequate investment in data centers, AI research facilities, and computing power, progress remains limited.
10. Data Availability and Quality Issues
AI innovation relies on high-quality datasets, but regulatory restrictions and lack of open-source data create barriers to progress. Data annotation and labeling are labor-intensive yet essential for improving AI accuracy and reliability.
Way Forward
Source-AI
India’s AI-driven transformation must focus on strengthening digital governance, fostering innovation, and ensuring ethical AI development. Tackling misinformation through AI-powered initiatives like the Deepfakes Analysis Unit (DAU) and public engagement via the WhatsApp tipline will be crucial in combating digital threats. The country’s large AI-skilled workforce, concentrated in major tech hubs like Bangalore, Hyderabad, and Pune, needs further investment in foundational AI research and breakthrough innovations to maintain global competitiveness. Ensuring data privacy and AI ethics through robust frameworks like the Digital Personal Data Protection Act (DPDP), 2023, will enhance user protection and responsible AI adoption. Infrastructure development must keep pace, with AI-driven cloud computing platforms playing a pivotal role in digital expansion.
Additionally, integrating AI into sustainable energy initiatives, such as the Nuclear Energy Mission, PM Surya Ghar Muft Bijli Yojana, and PM-KUSUM, can drive renewable energy adoption and climate resilience. With India’s demographic dividend projected to last until 2055-56, AI-powered skill development and employment policies should be prioritized to harness the workforce’s potential.
In governance, AI deployment must be anchored in ethical principles that promote fairness, transparency, and accountability. The Second Administrative Reforms Commission (ARC) Report on “Ethics in Governance” highlights the need for responsible decision-making, a principle that should extend to AI regulation. The Government of India’s SMART Policy (Strategic, Meticulous, Adaptable, Reliable, Transparent) provides a framework for AI governance that ensures enhanced efficiency and accountability in public administration. Through the IndiaAI Mission, India is poised to drive innovation, harnessing AI to advance sustainability and inclusivity, while positioning itself as a global leader in AI-driven progress.
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About The Contributor: Deepankshi Agnihotry is a research intern at IMPRI and holds a postgraduate degree in Electronics, is curious and passionate about sustainability and impactful policy solutions.
Acknowledgement: The author would like to express sincere gratitude to Dr.Vaishali Singh, Ms. Aasthaba Jadeja and the IMPRI team for giving the opportunity for writing the article. The author also extended gratitude to Mr.Arjun for his valuable insights.
Disclaimer: All views expressed in the article belong solely to the author and not necessarily to the organisation.
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