Trump’s AI action plan: What it means for India

In a sweeping move to reassert US dominance in artificial intelligence, President Donald Trump has unveiled America’s AI action plan. The ambitious roadmap aims to accelerate domestic innovation while positioning America as the undisputed leader in the global AI race, especially in its growing technological rivalry with China. 

The plan centred around innovation, infrastructure, and international leadership, calls for expedited permits for data centers and chip fabs, reduced federal regulation, and a coordinated push to export US “full-stack” AI technologies. 

”The Action Plan laid out by the administration outlines nearly 100 actions to accelerate innovation, slash regulatory barriers, expand AI infrastructure, and most importantly assert the US as the cornerstone of international leadership in artificial intelligence. It is a playbook to drop the fences, pour gasoline on the fire, and speed up the development and export of US AI,” says Ben T. Smith IV, who  leads the Communications, Media and Technology practice of Kearney, a global strategy and management consulting firm. 

The plan outlines a push to export the entire AI technology stack to the allied partners, right from advanced chips and cloud services to foundational models and software. This is a huge shift from the “high fence” approach of the Biden Administration, which pushed a range of AI export controls, including the compute caps seen in the closing weeks of the previous White House, Smith IV adds.

But beneath the tech-heavy vision lies a hard-edged geopolitical playbook. By tying AI leadership to national security and economic resilience, Trump’s strategy has sent a clear message. The US wants to dominate AI not just in labs, but on the world stage. By shaping what countries build with, and who they build with.

“In the short term (3-5 year period) Trump's AI Action Plan supports the AI infrastructure and AI for everyone growth across Asia. But in the longer term (7-10 years effect) it dampens the urgency for developing domestic solutions for AI chip design, architectures, semiconductor, connectivity solutions, LLM and other components across the AI value chain as all Asian nations, like pre 2022 era, would now again be reliant on US headquartered AI players for AI infrastructure needs that serves as AI led growth vision for every nation,” says Danish Faruqui, CEO of Fab Economics, a US-based boutique semiconductor Fab/OSAT Greenfield projects advisory and datacenter investment advisory firm. 

India in the spotlight

India’s strategic position in the global tech supply chain makes it a potential ally in Trump’s AI blueprint. While many details are still unfolding, early indicators suggest that India is likely to be among the top beneficiaries of Washington’s new AI playbook, believe experts.

In fact, earlier this year, Biden has placed India in the middle tier of its AI chip export restrictions, excluding it from the list of 18 countries granted unrestricted access to advanced AI chips. But in May, the Trump administration scrapped the Biden-era policy. 

“Indian companies could find it much easier to get the latest hardware (GPUs, AI accelerators) from the US companies across the board. Depending on how strongly India allies with the US, it could see preferential export licensing, or even US-backed financing in some cases. The tone of the new US policy that focuses on alliances to counter China places India in the spotlight given shared strategic interests and India’s growing tech prowess,” adds Smith IV.

Access to high-end chips, foundational models, and cloud services could significantly accelerate AI adoption in India’s domestic industries. But this newfound access comes with responsibilities.

“Practically, Indian companies could gain streamlined access to the US. AI chips from firms like Nvidia, foundational models from OpenAI or Google, expanded cloud services via AWS or Azure, and integrated software platforms. This would accelerate AI adoption in sectors like fintech and healthcare, but firms should ensure compliance with India's data localization laws to mitigate privacy risks,” says Amit Jaju, Senior Managing Director – India, Ankura Consulting, an advisory firm.

Moreover, experts believe India could also be viewed as a key ally due to the strategic partnerships like the Quad and shared concerns over China. “However, ongoing scrutiny in cyber forensics suggests India must demonstrate strong export control enforcement to fully benefit,” Jaju adds.

A moment of opportunity

India’s strategic positioning as a possible ally in Trump’s AI Action Plan is more than symbolic. It presents real, tangible opportunities across research, workforce development, infrastructure, and global AI governance. 

From AI chip shipments and skilling partnerships to ethical frameworks and global research tie-ups, the upside is significant. What was once blocked by restrictive policies is now within reach.

“Opportunities include joint US-India AI research initiatives, skilling programs for our 38 million impacted workers, and collaborations on ethical AI standards,” adds Jaju of Ankura Consulting.

This shift is not just about access but about inclusion in global design, governance, and deployment. India can have a seat at the table where tomorrow’s AI systems will be built and shaped.

“If this ‘ally-based’ AI framework moves forward, we could see joint research programs with top US universities, access to AI testbeds or collaboration on safety and ethics tools. On the talent front, this could mean more exchange programs, specialized skilling efforts and faster placement of Indian engineers and researchers into global teams,” says Deveroop Dhar, co-founder and MD at Primus Partners. 

While talent and research are foundational, the hardware story is just as crucial. The new US stance reverses earlier restrictions and paves the way for Asian nations, including India, to gain from the global data center and semiconductor upcycle. This could fuel India’s ambitions to become a regional hub for AI infrastructure.

“Trumps AI Action Plan is a win-win in most of the areas  as Asia’s data center market growth receives good news in the plan due to prioritization of deregulation on AI semiconductors and opening the critical gates for global AI growth. Key US headquartered players like AI hardware players such as Nvidia, AMD, Intel, Micron are now cleared to ship to Asian countries the earlier sanctions products like AI Chip Products such has the Nvidia H20, AMD MI 308, Intel Gaudi, Micron’s HBM3E,” adds Faruqui of Fab Economics. He adds, earlier this year these players had suffered drastically when POTUS via executive order banned shipments of AI Chip products to China. Such a drastic U-Turn in policy enables the data center growth story in multiple Asian countries including India, Malaysia, Indonesia, Hong Kong, Japan and EU countries like Spain and Poland. All these  countries offer lower OPEX cost structures for data center infrastructures, he adds. 

IndiaAI mission must shift gears

As the US treats AI infrastructure as a strategic national priority, India can no longer afford to move slowly. Trump’s AI Action Plan has made it clear that AI infrastructure is now viewed with the same urgency as energy or defence. For India, the message is simple: speed up or be left behind.

The IndiaAI Mission has set the foundation. But execution needs to match ambition.

“India should accelerate its own compute infrastructure, domestic AI stack, and export strategy. The government should treat GPU capacity like core infrastructure, with clear multiyear capacity targets, minimum offtake guarantees, and structured to derisk the substantial investments sovereign GPU/cloud operators are already making,” says Sunil Gupta, Co-founder, Managing Director & CEO at Yotta Data Services. He adds, even policy must go beyond mere data localisation. For strategic and citizen-scale workloads, government procurement at the central, state, and municipal levels should prefer India owned, India operated sovereign clouds and GPU providers, ensuring these nation-building investments are commercially viable and the stack remains auditable, rupee-billed, and operable on Indian soil.

“Under the IndiaAI Mission, India should act on three fronts,” says Manish Rawat, semiconductor analyst at TechInsights.   “First, it must catalyze the public-private buildout of data centers by offering viability gap funding and easing environmental approvals. Second, India should deepen semiconductor partnerships especially with the US and Taiwan through joint ventures focused on localizing chip packaging and advancing toward indigenous chip design. Third, to ensure inclusive innovation, India must develop a national AI compute grid, modeled after the US NAIRR, providing equitable compute access to startups, MSMEs, and academia.” 

These moves are critical to positioning India as a self-reliant and globally competitive AI player.

Tread carefully, think strategically

But with great opportunity comes the need for caution. Experts warn that depending too heavily on foreign access may limit India’s strategic flexibility in the long run.

“The US’s renewed AI push, especially under Trump’s doctrine, signals a shift toward a bipolar AI world mirroring a tech cold war with China. This emerging divide will pressure countries to align with either the US or China led AI ecosystem, influencing trade, data governance, and sovereignty,” adds Rawat. “For India, this moment presents both opportunity and risk. While closer ties with the US could offer short-term benefits like capital, access to advanced compute, and cloud infrastructure, the long-term risk lies in failing to build our own stack. If domestic efforts like IndiaAI or BharatGPT are overshadowed, we may end up as users, not creators. The US goal of end-to-end AI self-sufficiency could also fracture global supply chains, placing India in a delicate strategic bind.”

Dhar of Primus Partner adds, the biggest risk is becoming too comfortable with access. Just because we’re allowed to use top-tier chips or models does not mean we are in control. Dependency, especially on compute and foundational models, can quietly turn into a strategic vulnerability.

Another risk is around global standards. If India is always late to act on areas such as ethics, audits, or safety, we will be stuck following norms set by others. India needs to move from being a beneficiary to becoming a contributor.

For this, Rawat suggests India should take a page from its DPI (Digital Public Infrastructure) playbook. 

Smith IV believes India’s diplomatic and technological positioning will be tested soon. “The AI Impact Summit 2026 in New Delhi will be a key moment, as the U.S., Europe, and Asian representatives gather to discuss AI development. Hosting this will put a major spotlight on how India is charting its path forward and how it intends to balance its global ties.”

Ultimately, as the AI rivalry between the US and China intensifies, India does not need to choose a side but it must choose a strategy. India should work with everyone, depend on no one, build its own stack, train talent inhouse, and encode its own values into every AI system it creates.