Beyond Big AI: How India is Crafting Its Own Unique AI Revolution?

In a world increasingly driven by artificial intelligence, India is charting its own unique course. While global tech giants race to build ever-larger AI models, India is looking to redefine the game by focusing on both large and small language models (LLMs and SLMs). Union IT Minister Ashwini Vaishnaw recently shed light on the government’s AI roadmap, emphasizing that India is not just playing catch-up but is actively shaping the future of AI with its own indigenous innovations. Are you curious to know more how India is creating its AI revolution? TICE decodes this for you!

From Services to a Product Powerhouse: India’s AI Vision

For decades, India has been known as the back office of the world, leading in IT services and outsourcing. However, the government is now making a strategic shift—from being a service-led economy to becoming a global product powerhouse. The AI revolution is central to this transformation, and the Centre has laid out an ambitious plan to drive this change.

Speaking at the Nasscom Technology and Leadership Forum 2025, Vaishnaw highlighted how the Indian government is taking a holistic approach to AI. Beyond just developing large language models, India is also investing in small language models (SLMs) to address specific, distinct challenges. These models, designed to be lightweight and efficient, can cater to India’s diverse linguistic and digital needs, helping bridge gaps where larger AI models may fall short.

Building India’s AI Backbone: Datasets, Research, and Infrastructure

AI models are only as good as the data they are trained on, and India has a unique advantage—its vast and structured digital public infrastructure (DPI). The government is creating a “large number of non-personal and anonymized datasets” to train homegrown AI models. These datasets, sourced from platforms like Aadhaar, UPI, and DigiYatra, can give India a competitive edge in AI research and application.

To strengthen the AI ecosystem further, the government has already established three Centres of Excellence (CoEs) dedicated to AI research, with a fourth one in the pipeline. These centers aim to create a strong research base for AI, ensuring that India does not just remain a consumer of global AI models but emerges as a creator of cutting-edge AI technologies.

Global Recognition for India’s Digital Infrastructure

One of India’s most significant achievements in recent years has been its digital payment revolution, led by UPI. Vaishnaw revealed that Japan has granted a patent to UPI’s “gateway system,” a move that underscores India’s growing influence in the global fintech space. This recognition further solidifies India’s reputation as a leader in building scalable and efficient digital infrastructure.

The impact of AI on India’s DPI is expected to be transformative. According to Vaishnaw, AI integration across platforms like UPI and Aadhaar can exponentially amplify their power, potentially increasing their efficiency by 10x, 15x, or even 100x. This presents a massive opportunity for India to not just lead in AI adoption but also export its technological expertise globally.

Semiconductors: The Backbone of India’s AI Future

No AI revolution can be complete without robust semiconductor manufacturing capabilities. Vaishnaw highlighted that India is already making significant progress on this front. Five semiconductor units are currently under construction, with plans to develop 25 semiconductor products at these facilities.

Semiconductors are the building blocks of modern AI, and India’s investment in this sector signals a long-term commitment to technological self-reliance. By establishing a strong semiconductor ecosystem, India aims to reduce dependence on global chipmakers and build AI products that cater specifically to Indian needs.

Balancing AI Innovation with Regulation

As AI continues to evolve at a breakneck pace, governments worldwide are grappling with how to regulate this powerful technology without stifling innovation. Vaishnaw made it clear that India’s approach to AI governance will be measured and balanced.

While ensuring that AI does not cause societal harm, the government does not intend to impose restrictive regulations that could hinder innovation. India wants to avoid the mistakes of other countries that have taken an overly cautious approach, potentially slowing down AI advancements. Instead, the Centre is focused on fostering an environment where AI startups can thrive while keeping ethical considerations in check.

The Race to Build Indigenous AI Models

India’s AI ambitions are not just theoretical—the country is already witnessing a surge in homegrown AI initiatives. The government has received at least 67 proposals for building indigenous AI foundational models. Several Indian startups, including Sarvam AI, CoRover, and Ola’s Krutrim, have submitted proposals to develop 20 Large Language Models (LLMs). This growing interest from Indian startups highlights the country’s potential to become a global AI powerhouse.

India’s push towards AI is not just about competing with the West or China—it is about creating solutions tailored to Indian needs. From small language models designed to tackle specific problems to large-scale AI-driven digital infrastructure, the country is laying the foundation for a future where AI plays a central role in governance, business, and everyday life.

With strategic investments in AI research, semiconductor manufacturing, and digital infrastructure, India is not just participating in the AI revolution—it is shaping it. As the global AI landscape evolves, India’s unique approach—balancing innovation with regulation and leveraging its digital public infrastructure—could set a new benchmark for AI development worldwide.