INDIA: Budget 2025 on AI & Paris AI Summit

KAKALI DAS

“Centre of excellence in Artificial Intelligence for education will be set up with a total outlay of ₹500 crores,” Nirmala Sitharaman, Finance Minister, GOI

The budget isn’t just about taxes and projections; it’s also about responding to challenges. Right now, there’s none bigger than Artificial Intelligence.

Often referred to as the next space race, AI is a frontier where India seems ready to compete.

India Government Budget — Image: Powershift

Moreover, on February 10^th, global leaders will convene in Paris for the AI Action Summit—a high-stakes, two-day event shaping the future of artificial intelligence. The summit, held at the Grand Palais, will bring together a diverse mix of stakeholders, including government representatives, industry leaders, researchers, innovators, artists, and journalists.

On Day 1, the focus will be on collaboration, emphasizing inclusive and responsible AI development. On Day 2, world leaders will take center stage, debating collective actions to guide AI’s global impact.

This summit is the brainchild of French President Emmanuel Macron, designed to address AI’s growing influence, particularly the concentration of power.

India is co-chairing the event, with Prime Minister Narendra Modi set to attend in Paris. The focus will be on regulating AI, fostering innovation, and shaping a future where AI benefits everyone. By taking on a pivotal role in this summit, India is making a strong statement on the global stage.

But what are India’s AI goals? In recent weeks, DeepSeek has taken the world by storm, with Beijing setting a powerful example—proving that AI models don’t always require billion-dollar investments or cutting-edge technology. AI is no longer confined to Silicon Valley giants, and now, India is gearing up to make its mark in this space.

The Indian government is making significant investments, establishing AI-focused institutions, and working to integrate AI across key industries and sectors. Beyond just hosting foreign AI models, India is actively driving the development of home-grown AI technologies. It is also investing in related advancements to build a strong presence on its own terms. In essence, India is aiming for its own DeepSeek.

Now, let’s break down the 2025 Union Budget’s approach to artificial intelligence. This year’s budget focuses on three key aspects of AI: funding, institution building, and job protection—each with a distinct objective.

1. Funding: Last year, the government launched a National AI Mission with an initial allocation of just ₹552 crore. This year, funding has surged by 262% to ₹2,000 crore. The mission focuses on procuring advanced chips for India, with plans to acquire 10,000 GPUs to train AI models. These high-performance chips are a crucial investment, signalling the government’s commitment to strengthening India’s AI capabilities.

2. Building Institutions – The government is establishing a new Centre of Excellence in AI for education, with an allocation of ₹500 crore.

Last year, three such centers were set up, focusing on integrating AI into healthcare, agriculture, and sustainable cities. Now, another is being added, but what exactly do these centers do?

According to IBM, an AI Center of Excellence is an organizational structure designed to promote AI adoption, optimization, and governance. It acts as a hub for expertise, best practices, and resources.

The overarching goal is AI adoption—integrating artificial intelligence into key industries and sectors, with education being the latest focus.

India Budget 2025 on AI — Image: Powershift

3. Upskilling: This year’s economic survey issued a warning for the country, stating that AI’s impact on the Indian labour market would be intensified. The primary concern is low-skilled jobs, which are more susceptible to being replaced by artificial intelligence.

So, what’s the solution? The answer lies in upskilling the young population. To achieve this, the finance minister has announced several initiatives, including adding 6,500 new seats to existing IITs (Indian Institutes of Technology).

The finance minister says that the government is establishing five national Centers of Excellence in Learning and setting up 50,000 tinkering labs in government schools. These labs will focus on hands-on learning, covering areas like robotics, AI programs, and critical thinking.

The government’s AI plan is clear—it aims to cover all aspects. The IT minister has committed to delivering an Indian AI model within the next 10 months.

But to achieve this, significant computing power is required. That’s why the focus is on the National AI Mission to develop a home-grown artificial intelligence model. Once it’s created, the next step is to deploy it.

Enter the Centers of AI Excellence. These centers will integrate AI into key sectors of the Indian economy, aiming to boost productivity. However, as we embrace artificial intelligence, it’s crucial to protect jobs from its impact, and that’s where upskilling becomes essential.

Another key focus area is data centers—facilities that store, manage, and process vast amounts of data. Data centers are the backbone of the AI economy, and to lead in AI, having robust data centers is essential. India aims to capitalize on this opportunity.

Currently, India holds 20% of global data but only 3% of the total data capacity. The country aims to change that.

One of the country’s largest conglomerates, Reliance, is launching a new project to build what could become the world’s largest data center. Located in Jamnagar, the facility is targeting a capacity of 3 gigawatts. And that’s just the beginning.

India expects an investment of $300 billion in hyperscalers and data centres over the next three years. This makes sense, given that relatively low construction costs and energy fees give India a competitive edge as a data center hub.

All in all, this is a strong budget for artificial intelligence, especially considering the high stakes. The US has its own AI models, and China has its own. Now, the world is looking to India to do the same.

This budget demonstrates that India is on track, covering all aspects in the global AI race.

06-02-2025

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