As Finance Minister Nirmala Sitharaman gears up to present the Union Budget 2025 on Saturday, AI experts are calling for increased government investment in India’s artificial intelligence sector. The emergence of the China-made AI model DeepSeek—seen as a direct competitor to ChatGPT—has not only stirred global discussions but also led to market fluctuations, highlighting the urgency for India to strengthen its AI capabilities.
Industry leaders believe that boosting indigenous AI development is critical for safeguarding sensitive data and advancing key sectors such as defense, banking, financial services, and insurance (BFSI). Akhilesh Shukla, CEO of TechShots, emphasized the need for a dedicated budget allocation to support AI-driven innovation. “AI is the backbone of the knowledge economy, and even the President has stressed its importance. It holds the potential to revolutionize workflows, generate employment, and accelerate India’s path to becoming a $5 trillion economy,” he said.
Shukla also highlighted AI’s transformative role in healthcare, education, and agriculture, areas that are vital to India’s economic growth and societal progress. He urged the government to take bold steps in AI development, positioning India alongside global leaders like the U.S. and China.
AI’s impact on key sectors
AI adoption in India is expected to contribute $967 billion to GDP by 2035, according to a NASSCOM report. Experts argue that targeted investments in AI-driven solutions can revolutionize sectors like:
- Healthcare: AI-powered diagnostics and robotic surgeries could improve healthcare access for India’s 1.4 billion population.
- Education: Personalized AI tutoring could address India’s 30:1 student-teacher ratio, enhancing learning outcomes.
- Agriculture: AI-driven predictive analytics could boost crop yields, benefiting over 150 million Indian farmers.
With AI poised to be a key driver of the next industrial revolution, experts believe that a well-structured policy and financial backing in the budget could significantly propel India’s AI ambitions, ensuring both technological self-reliance and competitive growth on the world stage.
A global AI race
With the U.S. allocating over $200 billion in AI research and China aiming to be the world leader in AI by 2030, India must increase its AI budget from the current $1.2 billion, experts warn. “Like we launched cost-effective space missions, India must step up AI innovation to compete globally,” Shukla added.
Industry leaders hope the budget will include dedicated AI funding, tax incentives for AI startups, and policies supporting indigenous AI research to position India as a global AI powerhouse.
