India is strategically positioning itself to become a global leader in Artificial Intelligence (AI), recognizing AI as a key driver for economic growth and societal transformation. The country is making significant investments and implementing comprehensive strategies to foster AI innovation, build robust infrastructure, and cultivate a skilled workforce.
Ambitious Goals and Strategic Investments
India's AI market is projected to reach $20-22 billion by 2027, demonstrating a compound annual growth rate of 30 percent. To achieve this ambitious growth, the Indian government has launched the IndiaAI mission with an investment of ₹10,371.92 crore (US$1.2 billion). This mission aims to create a comprehensive AI ecosystem by focusing on several key pillars, including democratizing computing access, enhancing data quality, developing indigenous AI capabilities, attracting top AI talent, and enabling industry collaboration.
Building a Robust AI Infrastructure
A critical aspect of India's AI strategy is the development of a strong AI infrastructure. This includes addressing the current gap between India's AI aspirations and its data center capacity. Despite hosting nearly 20% of the world's data, India currently holds only 3% of the global data center capacity. To bridge this gap, the government is actively promoting the construction of AI-ready data centers and providing tax incentives to attract investments in this sector.
Nvidia CEO Jensen Huang recently stated that India is poised to develop its own AI infrastructure, including data centers and chips, emphasizing that AI is essential for modern nations. He likened AI to essential utilities, such as water and electricity, suggesting that every country needs its own AI systems tailored to its unique cultural and linguistic landscape.
The IndiaAI Mission is focused on expanding access to AI compute, data, and models to lower the barriers to entry for innovation. This includes increasing the availability of GPUs at subsidized rates for startups, researchers, and public institutions. The initial AI model starts with a compute capacity of about 10,000 GPUs, with the remaining 8693 GPUs to be added shortly. The facility includes 7,200 AMD Instinct MI200 and MI300 series, 12,896 Nvidia H100, and 1,480 H200 processors. The cost of computing the AI model will be less than ₹100 per hour following a 40% government subsidy, with half-yearly and annual plans for developers, researchers, and students.
Addressing Key Challenges
Despite the significant strides, India faces challenges in realizing its AI ambitions. One major concern is the limited availability of GPUs, which are essential for training advanced AI models. Some experts believe that India's current GPU pool is insufficient for developing cutting-edge AI systems and have urged the government to secure more computational resources.
Another challenge is to balance technological opportunities with inclusion, accessibility, and public impact. India's AI strategy emphasizes the development of sector-specific, customized AI models that address the country's unique social and economic context. This approach aims to ensure that AI benefits all segments of society and contributes to inclusive growth.
The Path Forward
India is adopting a phased approach to building its AI infrastructure, starting with foundational elements such as directories and metadata standards, and then progressing to more complex features like federated data access and coordinated compute exchanges. This approach allows institutional capacity to develop alongside technical systems, ensuring sustainable growth.
India is also actively fostering international collaboration to strengthen its AI ecosystem. The India AI Impact Summit, scheduled for February 19-20, 2026, in New Delhi, will be the first-ever global AI summit hosted in the Global South. The summit aims to strengthen global cooperation by focusing on implementation, capacity-building, and development-oriented pathways for AI.
By strategically addressing its challenges, fostering innovation, and promoting collaboration, India is well-positioned to harness the transformative power of AI and achieve its ambitions of becoming a global AI leader.