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As China’s DeepSeek-V2 shakes up global tech, India steps up with a sovereign AI push, a growing chip ecosystem, and a bold vision to shape the tech future on its own terms
“This is India’s digital moment,” declared Ashwini Vaishnaw. (PTI Image)
In May 2025, the quiet confidence in India’s tech ambitions became deafening. As the world reeled from the shock of China’s DeepSeek-V2, a large language model (LLM) reportedly trained on over two trillion tokens at a fraction of Western costs, India unveiled its counter: a domestically built sovereign AI programme, led by deep-tech startup Sarvam AI and a Rs 10,372 crore national AI mission. This move didn’t just signal intent, it marked a new axis in global tech power.
The shockwaves from DeepSeek-V2 continue to ripple through Silicon Valley. Long considered the undisputed leader in AI, the American tech establishment now faces a formidable challenge not only in innovation but also in cost efficiency. “DeepSeek is a wake-up call,” conceded a senior executive at a top US AI lab. “Western dominance in AI can no longer be taken for granted.” That admission underscores a global inflection point, and India is wasting no time in stepping up.
FROM QUIET ASPIRANT TO AMBITIOUS ARCHITECT
For decades, India was seen as a back-office player in the global technology chain, strong in software services but lacking in foundational R&D and hardware manufacturing. That is changing rapidly and deliberately. The IndiaAI Mission is the country’s clearest signal yet that it intends to build not just applications, but the underlying models and infrastructure that define technological leadership.
Sarvam AI’s mandate to develop India’s first foundational LLM is not merely about keeping up—it’s about leapfrogging. “This is not just a tech project, it’s a nation-building initiative,” said Union IT Minister Ashwini Vaishnaw. “AI must reflect Indian languages, Indian values, and Indian problems.”
By focusing on models built for India, in Indian languages, and deployed on Indian servers, the country is asserting technological sovereignty in a digital age where language models are fast becoming instruments of soft power.
HARDWARE MEETS VISION: THE SEMICONDUCTOR BACKBONE
No AI ambition is complete without the chips to run it. And here too, India is moving with unprecedented urgency. The Rs 76,000 crore India Semiconductor Mission is already bearing fruit: Tata Electronics is building the country’s first commercial chip fabrication facility in Dholera, while Micron is setting up a cutting-edge ATMP facility in Sanand, Gujarat, set to go live by the end of 2025.
To further catalyse this ecosystem, the government announced a new Rs 22,919 crore Production Linked Incentive (PLI) scheme for electronics manufacturing. The goal? To make India not just an assembly hub but a global centre for innovation in chip design, packaging, and testing.
“We are entering a phase where India will be a global destination for electronics innovation and production,” said Minister of State for Electronics and IT, Jitin Prasada. The strategic alignment between AI and semiconductor missions reflects a rare coherence in policy that prioritises both digital intelligence and digital infrastructure.
THE CHINA QUESTION: COMPETE OR COLLABORATE?
While India surges ahead, it cannot ignore the lessons from China’s AI playbook. DeepSeek-V2, developed by Chinese startup High-Flyer, demonstrates that cutting-edge models can be developed at significantly lower cost through smart engineering, tight integration of compute resources, and relentless optimisation. It has set a new benchmark that both inspires and unnerves the global AI community.
However, China’s model is predicated on centralisation infrastructure, data, and control. India, in contrast, is betting on a federated and democratic innovation model, where startups, academic institutions, and the public sector co-create in an open environment. This difference is not just philosophical, it is strategic. In a world wary of authoritarian tech exports, India’s transparent and inclusive digital ethos is a competitive advantage.
INDIA, UNITED STATES, AND THE FREE WORLD: A NEW TECH AXIS
Geopolitically, the timing couldn’t be better. With Western democracies seeking to derisk Chinese technology, India is emerging as a trusted alternative. The India-US Initiative on Critical and Emerging Technologies (iCET) is already yielding tangible outcomes in AI, semiconductors, and quantum computing.
“We see India as a key partner in securing the world’s semiconductor supply chains,” said Gina Raimondo, US Secretary of Commerce. American investment and partnerships are flowing into India’s deep-tech ecosystem, complemented by similar overtures from the European Union under the EU-India Digital Partnership.
“India’s commitment to ethical, inclusive digital development resonates deeply with Europe,” noted Thierry Breton, EU Commissioner for Internal Market. At a time when technological values are being hotly contested, India’s middle path—democratic but ambitious, sovereign yet open—is drawing global interest.
BUILDERS IN ACTION: THE RISE OF INDIA’S TECH CHAMPIONS
If policy is the blueprint, India’s private sector is the construction crew bringing it to life. Sarvam AI, Krutrim, and NeevCloud are not just replicating global models—they are tailoring AI for India’s unique multilingual and multicultural landscape. Meanwhile, companies like Kaynes Technology, Sahasra Semiconductors, and Tata Electronics are building the hardware capabilities India has long lacked.
“India is finally aligning innovation, capital, and government intent,” said Prashant Reddy, CEO of Sahasra. “This triad is what China mastered. Now it’s our turn.” But even as momentum builds, challenges remain—skills shortages, infrastructure bottlenecks, and fragmented supply chains—which could slow progress if not urgently addressed.
THE ROAD AHEAD: FROM PROMISE TO POWER
To convert promise into lasting power, India must commit to:
- Massive skill-building in chip design, embedded systems, and AI engineering.
- Strategic R&D investment in foundational models, fabless chip design, and next-gen materials like photonics.
- Accelerated infrastructure development in logistics, power, and data connectivity.
- Global alignment on standards and trusted technology production.
India’s demographic dividend, political continuity, and digital public infrastructure give it a springboard. But what will define its success is not just policy or potential, but relentless execution.
CONCLUSION: THE BATTLE FOR DIGITAL SOVEREIGNTY
In the 21st century, geopolitical influence will be wielded not just through armies or natural resources, but through the algorithms and silicon that power every sector, from defence to education, from governance to commerce.
As China rewrites the rules of cost-efficient AI and Silicon Valley adjusts to new realities, India stands poised to offer a third-way – open, sovereign, and scalable. With clear-eyed ambition, global partnerships, and a foundational commitment to inclusion and ethics, India is not just entering the race, it’s shaping the track.
“This is India’s digital moment,” declared Ashwini Vaishnaw. The world would do well to take notice, for the next era of technology might just speak in an Indian accent.
The writer is a technocrat, political analyst, and author. He pens national, geopolitical, and social issues. His social media handle is @prosenjitnth. Views expressed in the above piece are personal and solely those of the author. They do not necessarily reflect News18’s views.
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