In the nineteenth century, power was defined by steel and railroads. In the twentieth, it was computing and the internet. In the twenty-first, the defining force of global dominance will be artificial intelligence (AI). Yet despite being the world’s fifth-largest economy, India has yet to decide what role its state should play in this revolution — a hesitation that could determine whether it becomes a genuine world power or remains a follower in an AI-driven era.
While much debate in India focuses on political centralization and institutional decay, a more critical question looms: Does India have a coherent vision for mastering the technologies reshaping global power? The answer will decide not only India’s economic trajectory but also its geopolitical clout.
The Stakes Are Enormous
A 2023 McKinsey Global Institute study estimated that generative AI alone could add over $4 trillion annually to the global economy — roughly equal to Germany’s GDP. For India, where unemployment and underemployment persist despite high growth, AI presents both a solution and a threat. Without integrating AI into its economic and governance systems, India’s demographic dividend could turn into a demographic burden, leaving millions unemployable in an automated world.
Global Players Have Moved — India Hasn’t
The United States acts as an enabler, pouring billions into research, semiconductors, and digital infrastructure through initiatives like the CHIPS and Science Act. China, meanwhile, has chosen to be a commanding architect, aligning policy, capital, and enterprise toward AI supremacy by 2030.
India drifts between the two. It lacks America’s innovation ecosystem and China’s strategic discipline. It swings between control and inaction — regulating when it should enable, and enabling when it should lead. This pattern has haunted India before: Make in India failed to ignite a manufacturing revolution, leaving the sector’s share of GDP stagnant at 16–17%. Now, as AI transforms economies, India risks missing a second — and far more consequential — revolution.
The Core Problem: A Confused State
India’s challenge isn’t a lack of talent or ambition; it’s a lack of clarity. The state still oscillates between acting as owner, regulator, patron, and competitor — trying to be all, yet excelling at none.
The slogan “Minimum Government, Maximum Governance” promised efficiency but produced greater intrusion. Centralized decision-making and the overreach of investigative agencies have created an atmosphere of fear that stifles innovation and risk-taking. Unsurprisingly, private investment has dropped to its lowest in a decade, and foreign investment has fallen by over 98% year-on-year.
What India Must Do to Lead the AI Age
India’s IndiaAI Mission and ₹10,000-crore investment mark progress, but they remain modest. To truly compete, the country needs a bold national AI framework grounded in four key shifts:
- Build Innovation Infrastructure
India generates 20% of global data but has just 3% of data-center capacity. Despite the 2021 Semiconductor Mission, not a single advanced fab is operational. The state must prioritize compute clusters, public GPU clouds, and chip manufacturing at scale. - Train and Reskill the Workforce
Programs like Skill India train for basic sectors but barely touch AI. India needs an AI-literate workforce, integrating AI and data science across secondary schools, universities, and vocational institutes. - Enable AI for All, Not Just the Elite
Small and medium enterprises — 30% of India’s GDP — lack tech capacity. Targeted subsidies, AI-as-a-service platforms, and digital incentives can help smaller firms adopt automation and boost productivity. - Lead Global AI Governance
India participates in AI talks within the Quad and G20, but it must evolve from participant to policy shaper — building open-access research hubs and helping draft global AI standards rooted in equity and transparency.
So, Can India Be a Global Power?
Yes — but only if it fundamentally reinvents its state.
India’s size, talent, and entrepreneurial energy give it the ingredients of greatness. But without a strategic, predictable, and enabling state, those advantages will remain untapped. A paternalistic government that fears innovation will doom India to being the workshop of others’ ideas — a “garage nation” assembling imported technology instead of inventing it.
To become a true global power, India must recast the role of the state — from controller to strategic enabler, from reactive regulator to visionary partner, and from political authority to technological catalyst.
If India can make that transformation, it will not just participate in the AI revolution — it will help define it. If it cannot, the 21st century will belong to others.