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Chatgpt and DeepSeek AI Apps on User Mobile Phones in Sopore, Jammu and Kashmir, India, February 5, 2025
Nasir Kachroo | Parenting | Getty Images
The report comes from this week’s CNBC’s “Inside India” newsletter, which brings you timely, insightful news and market commentary about emerging powers and the large companies behind their rapid rise. Like what you saw? You can subscribe here.
Big story
Earlier this year, when its homegrown startup DeepSeek revealed a cheaper, more efficient AI model, China’s swaying market.
As India’s growing story and tech-savvy population gains more and more attention, how far is the country from its own Openai or stirring its own Openai or anthropology at a lower cost?
We sat down with Kunal Bahl, a renowned entrepreneur and investor. He co-founded the venture capital firm Titan Capital with others and is known for founding the Indian unicorn Snapdeal, a popular online marketplace. He is also a judge in the Indian Shark Tank.
“Given India’s success in establishing, deploying and expanding public digital infrastructure… the emergence of India’s Distec may be through a price-open partnership over the next 4-5 years,” Barr said.
Barr highlighted plans that could help India build its own large language model with global appeal.
Making chips
First, India is working hard to thrive in its chip manufacturing industry.
India’s Commerce Minister Piyush Goyal told me last October that India is on the verge of Manufacture the first chip in two years. Additionally, we reported earlier this year that Reliance Industries is building CEO Mukesh Ambani, who hopes to be CEO of Gujarat’s largest data center.
It is not easy to push India to manufacture and design state-of-the-art chips. Just look at the challenges Intel faces in building and producing AI chips in the United States
However, India has received support from US semiconductors. Micron and AMD are among the U.S. chip companies that invest in the country. NVIDIA CEO Jensen Huang visited Mumbai in 2024, during which he announced a partnership with Reliance Industries and AI R&D. Huang also promised to rely on NVIDIA’s latest Blackwell chips.
“These partnerships recognize the important role India will play in the global ecosystem and try to seize the first step by aligning with strong domestic conglomerates,” Barr said.
Building more chips at home may be one way to limit the impact of the U.S. on chip exports.
A few days before former President Joe Biden left, he implemented proliferation rules that could not only limit China, but also several countries to purchase high-performance graphics processing units from the United States, including India. The rule will come into effect this spring. President Donald Trump has the right to reverse it, but has not pointed out whether he would do so.
AI innovation
About AI, Bahl added that the innovation could come from large Indian conglomerates such as Reliance and Tata, which are building their own multi-modal LLM for industry-specific uses. Reliance Jio, Tata Electronics, Adani Group, TCS and Infosys are one of what Bahl calls Indian heavyweights.
With the Chinese market shutdown, U.S. companies have focused on helping build India’s AI ecosystem. Openai founder and CEO Sam Altman was in India when he met Ashwini Vaishnaw in early February. Vaishnaw posted on X, and the two discussed Openai’s interest in India’s goal of “creating the entire AI stack – GPUs, models and applications”. Altman shares that India is currently the second largest in Openai In terms of users.
Barr believes that government plans such as the “Indian AI Mission” have allocated 100,300 crore (USD 1.2 billion) over five years to enhance the country’s AI capabilities will also play a key role.
He admitted that while India’s AI funding is growing, “it is still much lower than the United States and China.”
Bernstein’s Indian head was more cautious in studying Venugopal Garre. He said India lacks investment in local technology and therefore has a less likely chance of surviving in the AI battle.
“Building deep technical capabilities is not (for India), as products from the U.S. tech giants led by several Indian CEOs are now easily available. This is in stark contrast to China, which is in stark contrast to China, which creates competitors across regions from micro blogogoging to AI models to AI models.
To be sure, early morning does not always guarantee leadership.
“The AI model is still in its infancy, still a blue ocean. It is similar to the search engine war in the early 1990s, and Google (deceased participants) took over the market,” Neil Shah, partner and co-founder of Counterpoint Research, told CNBC.
Another risk is the displacement of AI in the technology sector in India, experts say. Akhil Gupta, former head of Blackstone India, said the country’s unemployment rate remains high and has added more productivity tools that could exacerbate weakness in the Indian labor market.
India’s economic background and young workforce should make the country a leader in disruptive technologies, but industry experts do agree that it could be a victim if emerging markets don’t transfer enough time, resources and talents to figure out their role in the AI landscape.
“India is far from behind in developing its own version of DeepSeek, but I can tell you to talk to many executives that India has awakened the challenges and is inspired by China’s success,” Gupta added.
We will watch and wait.
Need to know
The Indian government has approved a new electronics manufacturing plan. The initiative, supported by Rs 22,919 crore (US$2.67 billion) was approved by the coalition cabinet on Friday with the aim of Establish self-sufficiency in the country’s electronics manufacturing industry.
The Reserve Bank of India has accelerated its open market operations. In the fiscal year 2025, Central Bank of India purchases government securities This is equivalent to four years. Its move underlines the importance of managing liquidity in an international environment of slowing domestic economic growth and uncertainty.
Tariff cuts are part of U.S. trade concessions Starting in January India used to be Reduce the collection of US importssuch as motorcycles, whiskey and Ethernet switches. More importantly, the equal tax (tax of digital services provided by non-resident companies) in South Asian countries was abolished.
India’s luxury goods industry is booming. Currently worth $8 billion Luxury retail market is expected to grow 75% The value by 2032 is US$14 billion. Factors driving this surge include growth in high net worth individuals and brands to suit Indian tastes.
Singapore’s Temasek reached an agreement with Haldirams. According to the agreement, Singapore’s state-owned investment funds will Acquisition of equity in HaldiramsIndian Candy Company announced on Sunday. Support with support for Haldiram’s overseas expansion is expected to end soon.
What happened in the market?
Indian stocks are in a negative state after U.S. President Donald Trump announces 26% tariffs on U.S. exports to the U.S. Nifty 50 It was down 0.17%, while BSE Sensex’s broader index fell 0.32% as of 11:55 a.m. local time.
Both indexes have been declining since the beginning of the year, with the Nifty 50 down 1.56% and the BSE Sensex down 2.25%.
The benchmark 10-year Indian government bond yield was slightly 6.490%.
Vivian Thurston, portfolio manager for William Blair, noted on CNBC this week that India had the highest trade surplus with the United States, but India’s exports to the United States accounted for only 2%-3% of the country’s GDP, so Tariffs will not have a big impact on economic growthThurston said.
What happened next week?
The Reserve Bank of India will end its monetary policy meeting on Wednesday, when interest rates are expected to be lowered. Consumer price indices in the United States and China will be issued the next day, giving investors an idea of where interest rates are going in these countries.
April 4: US non-agricultural wages in Marchspeech by Federal Reserve Chairman Jerome Powell, HSBC India compound purchasing manager index March, final reading
April 9: Indian interest rate decision,,,,, Japanese consumers’ confidence in March
April 10: US Consumer Price Index in MarchMarch minutes of the Federal Open Market Committee, Chinese Consumers and Manufacturers Price Index in March Japanese producer price index March
