Prime Minister Narendra Modi highlighted India’s stance on the evolving AI landscape at the AI Action Summit in Paris on February 11, saying, “Supporting shared values, dealing with risks, and building trust.” He emphasized the need for “governance and standards.” This perspective is also reflected in joint statements signed by India and more than 50 other countries. The commitment to trust, safety and universal access is in good agreement with India’s efforts to advance AI technology while reducing risk. The national approach to AI is extremely important as technology progresses and costs decline. Innovations such as the groundbreaking inference model of Chinese company Deepseek highlight the increased risk to the labour market. The IT and services sectors make up a significant portion of India’s economy, but employ relatively little labor. While AI-driven increased efficiency brings an attractive business proposition, the potential for unemployment or stagnant wage growth in this sector poses serious risks. The Prime Minister correctly pointed out that technological advances create historically new employment opportunities. However, as mentioned in the Economic Survey, there are valid concerns regarding Engels’ suspension. This is the stage in which businesses will benefit from new technology while actual wages are stagnant. India cannot afford to buy even a short period of such economic tensions, making it essential to a proactive policy response.
Given the importance of global climate, the summit’s emphasis on sustainable AI growth and energy efficiency is equally timely. The US produces more than twice the amount of electricity that India has, despite only a quarter of its population. This increase in energy share is currently being consumed by data centers that power AI training and deployment. With AI-driven energy demands rising rapidly, it is important to ensure that this growth is driven by a renewable source. The success of commercial AI remains elusive, with significant investment flowing into top market players, but offering limited economic benefits. India cannot replicate this high-investment, low-turn model, but it is essential to develop a basic AI model tailored to Indian needs. Utilizing new efficiencies and maximizing AI potential must be at the heart of India’s strategy. IndoMission initiatives are encouraged towards this goal, including subsidized access to Graphic Processing Unit (GPU) clusters and funding for promising projects. It will be essential to integrate AI education and skill training on a large scale in the future. Even if a significant share of top AI talent moves abroad, India needs to ensure that domestic industries retain sufficient expertise to remain competitive. AI will undoubtedly rebuild the industry and prepare a robust, talented pipeline will be key to ensuring India not only adapts to this transformation but also thrives.
Published – February 13th, 2025, 12:10am IST
