Economic Highlights

New Delhi, 23 February 2026

Inflationary AI, Shallow Research

A SOVEREIGNTY CHALLENGE!

By Shivaji Sarkar 

Artificial Intelligence was supposed to be India’s next moonshot moment — the arena where its vast pool of engineers, data scientists and entrepreneurs would finally challenge Western technological dominance on equal terms. It was a confident global showcase but had its mix of successes and failures. Goof-ups, mismanagement, confused coordination and embarrassing no-shows did cast a long shadow over India’s prestigious AI summit on the one hand and on the other the lineup of world leaders and global AI companies sent out a favourable message for India. To some, the gap between rhetoric and readiness seemed to look wider. 

This was meant to be India’s declaration that it is not merely a market for global tech giants but a maker of world-class technologies. Yet the optics offered a different story, despite kudos coming Modi’s ways. Delays, diluted participation and lack of clear outcomes suggested a system still struggling with basics — planning, delivery and accountability. For a country that speaks of leading the digital century, logistical issues could harm its reputation. 

The shocking incident of a private Galgotia University, showcasing a Chinese robot as its own, symbolises the state of affairs in the private Indian education system. Also, that research except for some specialised government institutions is a sham and a PhD degree may be not its worth. 

Prime Minister Narendra Modi has tried to reframe the conversation with his “Manav Vision” — an AI philosophy centred on humanity, inclusion and social good. It is an attractive idea. It reassures a world wary of algorithmic excess and surveillance capitalism. But vision statements, however noble, cannot substitute for execution. Without strong domestic capabilities, ethical slogans risk sounding like consolation prizes.

Resource Guzzling Monopoly

The real concern is not a botched summit but whether India is serious about technological sovereignty. Today, India is largely an AI user, not a developer. Even leading engineering institutes lack robust teaching models and original research capacity. AI must be approached cautiously, as it risks deepening monopolies, concentrating power and undermining democratic, humane systems. 

With only about Rs10,372 crore ($1.2 billion) allocated, India can ill afford a capital-intensive, energy-guzzling technology that fuels inflation, strains resources and delivers limited jobs. The global AI rush is already unsettling markets; rising costs and weak returns could hurt currencies and growth. Ironically, even Pakistan plans $1 billion in investment, while Iran is committing far less but more cautiously. 

As investments soar and employment shrinks, AI risks becoming a monopoly-driven, job-killing model. India must prioritise self-reliance and measured adoption over blindly chasing a costly technological race. 

The Time magazine has highlighted the issue this week: The People vs. AI. The backlash to the irresponsible and exploitative promotion of AI at all costs is growing. It says, “Politicians who choose to do the bidding of Big Tech at the expense of hardworking Americans will pay a huge political price”.

For decades, India has been content to play the role of back office to the world — coding for others, servicing others, building platforms owned by others. In software services, this model worked. In AI, it will not. Artificial Intelligence is not just another industry; the West calls it foundational power (India needs to question it). Whoever controls AI controls data, defence, finance, health, agriculture, media — practically every lever of modern life. To depend entirely on Western platforms would be to accept a subtle form of digital colonisation.

Why India Consumer and Not Producer!

Today, most of India’s AI stack rests on foreign infrastructure: American cloud providers, Western chip designers, proprietary models built in Silicon Valley. Even our brightest startups often seek validation, capital and exits abroad. If this continues, India will remain a consumer of intelligence rather than a producer of it. That is not sovereignty. That is dependency dressed up as global integration.

The danger is not abstract. Algorithms decide what citizens read, what they buy, what loans they receive, even what narratives dominate public discourse. If these systems are owned and trained elsewhere, national priorities become secondary. Data flows outward; profits flow outward; strategic control flows outward. India cannot afford to become a digital tenant in its own house.

What is needed is not protectionism but purposeful independence. Domestic data centres, indigenous AI models trained on Indian languages, locally designed chips, and homegrown platforms must become policy priorities. Investment should favour deep tech, not just app-based conveniences. Marketing should project Indian products globally, not merely resell Western solutions under local branding. Venture capital must be encouraged to stay patient rather than chase quick foreign acquisitions.

Not Reform

Above all, the state must stop confusing grand announcements with structural reform. Big-ticket summits and glossy brochures cannot replace long-term ecosystem building. Real capability grows quietly in labs, factories and classrooms — not on ceremonial stages.And here is where another uncomfortable truth emerges: India’s universities, which should be the crucibles of innovation, are often failing the moment.

Too much “academic” research has slipped into what can only be called humbug — papers written for promotion metrics, conferences attended for travel grants, jargon-heavy studies with little practical value. The obsession with quantity over quality has created a mountain of publications but very few breakthroughs. Patent filings are low. Technology transfers are rare. Industry collaboration remains cosmetic.

While global institutions race ahead with foundational AI research, many Indian campuses are content recycling second-hand ideas. Students learn frameworks but rarely build original systems. Laboratories lack cutting-edge hardware. Faculty incentives reward citation counts rather than usable inventions. The result is predictable: dependency on imported knowledge.

If universities do not produce serious research, the private sector will always look abroad. If campuses cannot incubate deep-tech startups, the best minds will migrate. Brain drain is not merely about salaries; it is about ecosystems that respect excellence.

The stakes are too high for complacency. Artificial Intelligence is not some inevitable civilisational leap that every nation must chase at any cost. It is a tool — powerful, expensive and potentially disruptive. It raises serious ethical, social and economic risks, from job losses to monopolies and concentrated control. Blindly treating it as destiny would be as reckless as ignoring it altogether.

What matters is not whether India “wins” an AI race, but whether it retains judgment and sovereignty. Mastery should mean understanding the technology well enough to regulate it, limit its harms and deploy it only where it truly serves public good. Dependence, not delay, is the real danger. A country that imports intelligence without building its own capacity does not modernise — it mortgages its future.

India must therefore move with caution, clarity and self-reliance — neither starry-eyed nor submissive. In the end, technology should serve the nation, not the other way around.---INFA

(Copyright, India News & Feature Alliance)