From IT Services to AI Inferencing: India’s Next Big Tech Bet

India is laying the groundwork to position itself not just as a data centre destination, but as a global hub for artificial intelligence inferencing, a shift that could redefine its role in the AI economy.

Speaking at a Confederation of Indian Industry (CII) conference on AI for equitable growth, Abhishek Singh, Additional Secretary at the Ministry of Electronics and Information Technology (MeitY) and CEO of IndiaAI, said India has the potential to become “the inferencing capital of the world”—handling a significant share of global AI workloads.

The strategy hinges on scale. Recent Union Budget measures, including incentives for data centre expansion, tax exemptions and relaxed safe harbour rules, are already translating into strong interest from global technology majors. Companies such as Google, Microsoft and Amazon are expanding their digital infrastructure footprint in India, Singh said.

While data centres form the backbone, the real prize lies in inferencing—the stage where trained AI models are actually deployed to deliver services. Large-scale inferencing capabilities, Singh noted, would give India a strategic edge in deploying AI across sectors, from industry and services to governance and social applications.

This infrastructure push sits at the heart of India’s broader ambition to use AI as a kinetic driver of economic growth and productivity, especially as global IT services are reshaped by automation and agentic AI.

India’s push will take centre stage at the IndiaAI Impact Summit, scheduled from February 16 to 20, which is expected to draw around 20 heads of state, nearly 60 ministers, global CEOs and leading researchers. The summit has been structured around three pillars—People, Planet and Progress—with an emphasis on tangible outcomes rather than policy statements alone.

Singh said India, long regarded as the world’s technology services hub, must now move up the value chain, positioning itself as a provider of AI transformation and agentic AI services rather than just back-end IT support. But infrastructure alone will not be enough.

Large-scale skilling and capacity building will be critical to ensure India’s vast engineering workforce can harness AI tools instead of being displaced by them. Initiatives such as FutureSkills Prime, developed with NASSCOM, are intended to support this transition.

The ambition is expansive. Singh linked India’s AI push to its long-term economic goal of growing from a $4 trillion economy to $30 trillion, with AI acting as a force multiplier for efficiency, productivity and inclusive growth.

That ambition is already translating into early outcomes. Sudeep Srivastava, Joint Secretary at MeitY, said India’s national India AI Mission, launched in March 2024, is delivering some of the lowest-cost AI compute in the world, with GPU access priced as low as ₹65 per hour for certain workloads.

Under the mission, 12 startups are developing indigenous foundation models, several of which will be showcased at the upcoming summit. The programme spans seven pillars, including compute infrastructure, innovation centres, curated datasets, application development, future skills, startup financing, and safe and reliable AI.

India has also launched initiatives to train 100,000 college students in foundational AI and machine learning, part of a broader effort to build an AI skilling pipeline from schools to workplaces.

The message from policymakers is clear: India does not want to merely host AI infrastructure. It wants to run the world’s AI workloads and shape how AI is deployed at scale, especially for the Global South.

(With inputs from ANI)