'AI-as-a-Service is India's next big opportunity; IT industry must move beyond SaaS': Ashwini Vaishnaw

India's information technology (IT) industry should pivot from its traditional software services model to an "AI as a Service" (AIaaS) approach, leveraging the country's trusted global reputation and deep technology talent to capture the next wave of digital growth, Union Minister for Electronics & IT, Railways and Information & Broadcasting Ashwini Vaishnaw said on Saturday.

Addressing an Industry Leader Townhall on "The Role of Technology in Building Viksit Bharat 2047", organised by the Hyderabad Software Enterprises Association (HYSEA) in Hyderabad, Vaishnaw said India's next phase of economic expansion will be powered by artificial intelligence (AI), semiconductors, electronics manufacturing and modern infrastructure, in line with Prime Minister Narendra Modi's vision of Viksit Bharat 2047. Union Coal and Mines Minister G. Kishan Reddy also attended the event, followed by a roundtable interaction with industry leaders.

AI, semiconductors to power next phase of growth

Calling AI a transformational force for the global technology industry, Vaishnaw said every new AI model is creating fresh capabilities and business opportunities. "India's greatest strength lies in the trust it has earned globally by understanding industries, identifying problems and delivering effective technology-driven solutions," he said.

Emphasising the need for a strategic shift, the minister said the Indian IT industry must now evolve beyond the Software-as-a-Service (SaaS) model to providing "AI as a Service", adding that the transition should be driven through stronger collaboration between industry and academia.

To build a future-ready talent pipeline, Vaishnaw said NASSCOM, in partnership with the government, has prepared a comprehensive AI curriculum, which has been shared with the Ministry of Education and the All India Council for Technical Education (AICTE) to equip students with the latest AI knowledge and skills.

The minister also highlighted India's rapid progress in semiconductor manufacturing, noting that the country's decades-old ambition of building a semiconductor ecosystem has now materialised. He said 12 semiconductor manufacturing plants are currently under various stages of development, while three facilities have already started producing chips that are being exported to Japan, Europe and domestic markets.

Pointing to a global shortage of semiconductor talent, Vaishnaw said India's expanding chip design ecosystem presents a significant opportunity for technology companies to combine expertise in electronics, software, product engineering and design to develop innovative semiconductor solutions. He added that advanced semiconductor design tools have been made available to 315 universities to strengthen the country's talent base.

Electronics exports, digital infrastructure gather momentum

Vaishnaw said India's electronics manufacturing sector is witnessing unprecedented expansion, with mobile phones emerging as the country's largest export category last year. He added that the sector is expected to grow from the current ₹13 lakh crore to ₹20 lakh crore in the near future.

In Telangana, the Centre has supported the establishment of 104 electronics manufacturing companies, approved four Electronics Manufacturing Clusters (EMCs) and set up a Common Facility Centre (CFC) to strengthen the state's manufacturing ecosystem.

Highlighting India's digital transformation over the past decade, the minister said the country has emerged as a global leader in Digital Public Infrastructure (DPI). He noted that the Unified Payments Interface (UPI) has processed transactions worth more than ₹314 lakh crore, while indigenous 4G and 5G technologies, affordable data services and digital platforms continue to accelerate innovation and economic growth.

Describing Hyderabad as one of India's fastest-growing technology hubs, Vaishnaw said the city is making significant contributions in AI, semiconductors, Kavach railway safety technology, VFX and digital innovation, and is well positioned to play a leading role in India's future technology ecosystem.

The minister also announced that three bullet train corridors are planned for Hyderabad, which, alongside enhanced infrastructure, is expected to strengthen the city's position as a major economic and high-speed rail hub.

On railway investments, Vaishnaw said Telangana is now receiving over ₹5,400 crore annually for railway development, compared with around ₹880 crore allocated annually to the undivided Andhra Pradesh during the UPA government. Around 40 railway stations in the state are also being modernised under the Amrit Bharat Station Scheme, which aims to redevelop more than 1,300 stations across the country.

Separately, Union Minister G. Kishan Reddy said the benefits of development should extend beyond Hyderabad, with tier-II cities such as Warangal and Karimnagar emerging as centres for investment, innovation and employment. Both ministers later visited the Medha Bogies Factory at Kondakal and Medha Servo Drives Pvt. Ltd., where they reviewed manufacturing operations and technological preparedness ahead of the commissioning phase.