India’s pivot to the global race for AI diffusion could grant the country leadership of an important effort

Subscribe to enjoy similar stories.For years, the global AI race focused on frontier models, faster chips and massive capital. The US still leads this phase, with its hyperscalers ready to roll out massive expansions of data centre capacity as soon as labour, chip and power availability catch up. China, however, is shifting its strategy.

Its newly approved 15th Five-Year Plan (for 2026–2030) introduces a sweeping ‘AI+ action plan’ to embed artificial intelligence across manufacturing, supply chains, public systems and the entire economy. The 2026 Stanford HAI AI Index confirms this shift: AI leadership is no longer decided only by who builds the best models. The new battleground is infrastructure plus diffusion—i.e., turning AI into an economy-wide driver of productivity at population scale.India enters this race with strong structural advantages.

We have already built critical digital rails. UPI has scaled from pilot-project stage to over 20 billion monthly transactions. We possess massive demand: nearly 80 million micro, small and medium enterprises (MSMEs), hundreds of millions of informal workers and stretched public systems where even modest productivity gains create an outsized impact.

Our diversity demands inclusive design—vernacular, easy-to-use solutions that require minimal connectivity and can work anywhere. We have also begun building sovereign capacity through the IndiaAI Mission. Yet, the risks are significant.

The most critical is institutional. If the underlying architecture remains fragmented, AI will amplify fragmentation. If data stays siloed, AI will stay constrained.

If workflows are broken, AI cannot deliver meaningful impact. India must therefore move beyond deploying isolated AI solutions. We must