Prime Minister Narendra Modi underscored India’s strategic approach to Artificial Intelligence (AI) at the AI Action Summit in Paris on February 11. He emphasized the necessity of governance frameworks that safeguard shared values, mitigate risks, and foster public trust. This aligns with India’s commitment to AI development, as reflected in the joint statement signed by over 50 countries, reinforcing global trust, safety, and equitable access to AI advancements. As AI technologies evolve and become more cost-effective, their impact on labor markets intensifies. The emergence of advanced AI reasoning models, such as those developed by Chinese firm DeepSeek, highlights potential disruptions.

India’s IT and services sector, which plays a vital role in the economy, may experience efficiency gains through AI but also risks job displacement and wage stagnation. While history suggests that technological innovation ultimately generates new employment avenues, the short-term economic effects could be concerning. The Economic Survey warns of an Engels’ pause—where businesses profit from new technologies while wage growth stagnates—something India cannot afford amid its growth trajectory. Proactive policies are essential to balance these transitions. Beyond economic concerns, sustainable AI growth and energy efficiency demand urgent attention.

The U.S., with a fraction of India’s population, produces twice the electricity. AI training and deployment are driving up energy consumption, making renewable energy integration a necessity. Commercial AI remains a high-investment, low-return field dominated by a few major players. Instead of replicating this model, India must focus on AI tailored to its unique needs. The IndiaAI Mission’s initiatives, including subsidized GPU access and funding for AI projects, are steps in the right direction. Integrating AI education at scale will ensure that India retains sufficient expertise, preparing the nation to not just adapt but lead in the AI revolution.