India Must Build In-House AI Models to Capture Economic Opportunity

India must significantly expand its in-house artificial intelligence and model development to realize its national AI ambitions, Ramesh Lakshminarayanan said.

Developing internal capabilities is critical for India to capture economic benefits and avoid missing future value layers of the technology. The push for domestic AI development comes as the country attempts to pivot its massive tech workforce toward higher-value roles.

Speaking at the Rising Bharat Summit, Lakshminarayanan, the Group Head of IT and CIO of HDFC Bank, addressed the ongoing debate regarding the country's technological trajectory. "In the debate over whether India is missing the AI opportunity, there’s still a lot of work to be done in building intelligence and models," Lakshminarayanan said.

This urgency follows a broader trend of adaptation within the Indian tech sector. While some reports suggest India missed the first AI value layer, other analyses indicate the country has not missed AI entirely ^[2]. Recent reporting notes that India is moving quickly to catch up, though some critics warn that massive AI projects may consume significant water and energy without creating long-term employment ^[3].

The stakes involve a significant portion of the national economy. Between 10 million and 15 million people are employed in India's information-technology sector ^[1]. There are growing concerns that AI is exposing cracks in the traditional growth story by threatening high-paying IT jobs, and shrinking the established back-office model ^[1].

To mitigate these risks, leaders are emphasizing a shift from simply utilizing foreign AI tools to creating indigenous models. This transition is seen as the primary way to ensure that the economic gains of the AI era remain within the country rather than flowing to external providers.