AI’s role in India’s giant leap forward: How infrastructure, innovation, and inclusion will drive performance

India stands at a pivotal moment in its economic journey. With a GDP of approximately $3.7 trillion in 2024, the country has set its sights on becoming a $10 trillion economy within the next decade. Achieving this ambitious goal will require more than just incremental growth — it demands a structural transformation into a knowledge-driven, innovation-led economy. At the heart of this transformation lies a powerful enabler: artificial intelligence (AI).

But AI in India must be more than a technological marvel. It must become a tool for access, inclusion, and empowerment — a force that amplifies governance, enhances productivity, and drives equitable growth. To unlock this potential, India must invest in the foundational infrastructure that supports AI at scale.

From Algorithms to Infrastructure

The first step is building the digital backbone — AI-ready data centres that can handle the compute-intensive demands of modern AI workloads. These centres must be strategically located in Tier-2 and Tier-3 cities, where land is affordable, climates are favourable, and renewable energy is accessible. A National Compute Grid could democratise access to high-performance computing by connecting public and private infrastructure and allocating GPU credits to start-ups, researchers, and public institutions.

Equally critical is the establishment of sovereign AI zones — secure, localised cloud environments for public sector workloads. These zones would ensure data privacy, national security, and digital resilience in an increasingly interconnected world.

The Silicon Backbone

AI’s capabilities are ultimately constrained by the chips that power it. As global supply chains face geopolitical uncertainties, India must prioritise domestic semiconductor manufacturing. This means building a full-stack ecosystem — from chip design and fabrication to packaging and testing — supported by a skilled workforce trained in advanced technologies.

Public-private partnerships will be essential to this effort. The government can provide capital support and policy clarity, while global technology leaders bring in intellectual property and manufacturing expertise. At the same time, India must foster indigenous innovation by supporting start-ups and academic institutions working on AI-optimised chip architectures.

Semiconductor fabs are not just factories — they are strategic assets that underpin national sovereignty and technological self-reliance.

DPI 2.0: India’s AI Operating System

India’s unique strength lies in its Digital Public Infrastructure (DPI) — platforms like Aadhaar, UPI, and ONDC that have transformed service delivery and financial inclusion. The next evolution, DPI 2.0, must be AI-native.

This means building open-source AI APIs for Indic languages, explainability, and bias detection; funding India-tuned foundation models for sectors like climate, education, and healthcare; and launching innovation sandboxes where start-ups and public institutions can co-develop solutions using anonymised public data.

DPI 2.0 should be India’s AI operating system — inclusive, trusted, and scalable — built in collaboration with industry, academia, and civil society.

A Whole-of-Nation Strategy

No single entity can build this future alone. A coordinated national strategy is essential.

The government must lead with vision and execution — launching a National AI Infrastructure Mission, setting clear regulatory frameworks, and integrating AI training into national skilling programmes. Indian conglomerates can invest in hyperscale data centres, anchor semiconductor ventures, and lead AI R&D tailored to India’s unique needs. Start-ups and private enterprises must innovate responsibly, co-create with public institutions, and ensure their solutions are inclusive and ethical.

From Vision to Execution

Prime Minister Modi’s call to “Make AI in India” is more than a slogan — it’s a national imperative. India doesn’t need to import intelligence; it needs to build it, embed it, and scale it for 1.4 billion citizens.

Just as India built roads to move goods and UPI to move money, it must now build AI highways to move intelligence. The future isn’t just digital — it’s intelligently, inclusively Indian.

Views are personal. Suman is Partner and Bindal is Principal, at Kearney.