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india is emerging as the hub for “Digital Skills” – Digital Innovation Hub. The country spends $1.6 bn annually on training workforce in the sector. The industry is the largest employer within the private sector, employing 3.9 mn people. India is transforming into a digital economy with over 627 million internet users in 2019.

But where does India stand today in AI? India remains a laggard way behind! Successive governments are responsible for the failure to formulate an action plan. However, the Modi-led NDA has taken the initiative to develop a plan for AI. But there is a need to think big and take bold action to harness the technology’s potential and address the challenges to help India survive and thrive in a global market.

Just as Google, Oracle, Microsoft, and Amazon are battling to serve the cloud computing and machine learning needs of the US government, the next three to five years may lead to a similar dynamic within India. As the Indian government pushes for digitisation and enacts more AI initiatives, private firms will flock to win big contracts – adding to the pool of funds to develop new technologies and spin out new AI and data science-related startups.

However, a formal policy is yet to be released to include a mission statement and strategy – end objectives to be achieved in specific time frames, ways and means – most beneficial to all sectors of human activity. In 2017, a Task Force on AI for India’s Economic Transformation by the Commerce and Industry Department was created. In February 2018, the government think-tank, National Institution for Transforming India (NITI) Aayog spearheaded the national program on AI focusing on research.

As on date, the government initiatives are restricted to digitisation, healthcare augmenting the productivity of existing pathologists and radiologists to reduce costs and precision agriculture using AI real-time advisory based on satellite imagery, weather data, etc., to increase farm yields where the farm production levels are low.

In sum, the pace of innovation around establishing a comprehensive AI strategy for the future isn’t comparable to America or China today. Of late, there is increased AI interest what with industries working to skill their manpower to enable themselves to compete with other global players, educational institutions working on their curricula to include courses on machine learning and other relevant areas and individuals and professionals acquiring and upgrading their own skills.

Most of the traction today seems to be in the form of AI pilot projects from the government in agriculture and healthcare and the emergence of AI startups in Indian software hubs. Karnataka has launched the Center for Excellence in AI setup by the GOI and NASSCOM in Bangalore to groom AI professionals.


Even now there is lack of collaboration between industry and academia specifically in the AI domain. Data science courses in India are tailored to technique and not to business context and application. Industry-university partnerships where students can work with real world data science applications and reskilling of existing workforces are yet to take shape in India.

Although there are Venture Capitalists in AI starting to emerge, access to venture funding is rare.


Focusing on BPO and IT services sector is an opportunity for all businesses and markets. The BPO industry must use the opportunity in data cleaning and data tagging in massive datasets to train and error-correct AI.


Next, timely government funding initiatives is vital. The level of funding so far is much smaller in India compared to US and China. Thus far, the Ministry of Electronics and Information Technology, has been funding projects by educational institutions in the areas of ubiquitous computing and wireless sensor networks for real-time landslide monitoring and perception engineering. The ministry has also been operating a Technology Incubation and Development of Entrepreneurs (TIDE) scheme for facilitating technology innovation over the last decade. The recommendation here would be to develop more such public sector initiatives where private sector firms can gain large contracts, strengthening the government-industrial complex in AI.


India must not only retain its best tech talent, but attract the Indian talent working on foreign shores by paying higher wages, doing more interesting and valuable work, as opposed to losing them as many of India’s most promising graduates leave for the USA, Europe, or elsewhere.


Rapid strides in AI absorption and development is vital to exploiting the cost-competitive advantage and large source of qualified IT workforce by focusing on AI initiatives, adequate funding, PPP partnerships, joint foreign collaborations with industry and academies. In house and on job up-skilling of workforce, pay higher wages not only to retain but also to attract Indian talent working in foreign countries and provide conducive work environment and recognition for contributions to innovation are an imperative.