National AI Strategy

Growing discussions on India's Artificial Intelligence (AI) strategy, along with the implementation of the IndiaAI Mission and the push for sovereign AI capabilities, have renewed focus on treating AI as a Digital Public Infrastructure (DPI) similar to Aadhaar, UPI, and affordable internet. Policymakers are increasingly advocating free or affordable AI tokens and indigenous AI infrastructure to democratize AI access and accelerate India's transition towards an innovation-driven economy.

Background: From the 'Hindu Rate of Growth' to the 'Bharat Rate of Growth'

For nearly four decades after Independence, India's economy grew at an average annual rate of around 3%, popularly known as the "Hindu Rate of Growth." This period was characterized by extensive government controls, low productivity, limited industrial expansion, and modest private sector participation.

The 1991 Balance of Payments (BoP) crisis became a turning point in India's economic history, leading to sweeping economic liberalization, deregulation, and market-oriented reforms. These reforms unleashed entrepreneurship, attracted investment, and significantly accelerated economic growth.

Today, Artificial Intelligence (AI) is being viewed as the next transformative technology capable of driving India's economy towards sustained annual growth of 8% or higher, making AI a potential catalyst for achieving the vision of Viksit Bharat 2047.

India's Track Record in Digital Leapfrogging

India has repeatedly demonstrated its ability to leapfrog traditional stages of technological development by building world-class Digital Public Infrastructure (DPI).

The launch of Aadhaar, the world's largest biometric digital identity system with over 1.3 billion enrollments, revolutionized welfare delivery, financial inclusion, and identity verification by enabling targeted and transparent delivery of government benefits.

Similarly, the Unified Payments Interface (UPI) transformed India's payment ecosystem. Today, UPI processes nearly 50% of all real-time digital transactions globally, making India a global leader in digital payments and financial innovation.

The Affordable Data Revolution, triggered primarily by the entry of Reliance Jio, drastically reduced mobile internet costs and made India one of the world's largest consumers of mobile data. Affordable internet created a digital ecosystem that enabled rapid adoption of e-commerce, digital education, fintech, telemedicine, and e-governance.

These successful examples demonstrate that building accessible digital infrastructure first creates large-scale innovation and adoption later. A similar ecosystem-based approach is now being proposed for Artificial Intelligence.

Why India Needs Affordable or Free AI Tokens

AI tokens are the fundamental computational units consumed whenever users interact with Generative AI systems such as Large Language Models (LLMs). Every prompt, response, translation, summarization, or AI-generated output requires token processing.

Making AI tokens free or highly affordable can democratize access to advanced AI capabilities across education, research, governance, healthcare, agriculture, and entrepreneurship.

Universal AI access would enable students, researchers, teachers, scientists, start-ups, and public institutions to use AI as a "cognitive teammate", improving productivity, creativity, innovation, and decision-making.

Need for Greater Public Investment in AI

India currently spends only about 0.65% of GDP on Research and Development (R&D), substantially lower than major innovation-driven economies.

• China: ~2.4% of GDP

• United States: ~3.5%

• South Korea: ~4.9%

• Israel: ~5.4%

This relatively low investment limits India's ability to develop indigenous frontier technologies and remain globally competitive.

Experts argue that allocating approximately 0.06% of GDP to provide subsidized AI access for IITs, IISc, research laboratories, universities, and selected schools would create enormous long-term economic benefits. Compared to existing public expenditure on food, fertilizer, and energy subsidies, such investment would be relatively modest while generating substantial gains in innovation and human capital development.

Major Challenges Before India's AI Ecosystem

Despite enormous opportunities, India faces several structural challenges in developing a globally competitive AI ecosystem.

A significant concern is the digital divide, where unequal access to computing infrastructure and internet connectivity could widen socio-economic inequalities.

Rapid AI adoption also raises issues related to data privacy, cybersecurity, ethical AI, algorithmic bias, and the spread of misinformation and deepfakes, requiring robust regulatory safeguards.

Another challenge is the high energy requirement of AI data centres and supercomputing facilities, which necessitates sustainable energy planning and efficient computing infrastructure.

Funding Models for Affordable AI Access

One proposed approach is the Public-Private Partnership (PPP) model, where the Government collaborates with major cloud computing providers such as Amazon Web Services (AWS), Google Cloud, and Microsoft Azure.

Instead of providing only fiscal incentives or land for data centres, the Government could negotiate concessional AI computing capacity for educational institutions, research organizations, and start-ups.

A cross-subsidy model is another viable option. Under this approach, commercial enterprise subscriptions would subsidize free or low-cost AI access for universities, research institutions, and public sector organizations.

The Government's primary role would be creating an enabling regulatory environment rather than directly financing the entire ecosystem, similar to the successful evolution of India's telecom sector.

Need for Sovereign AI Infrastructure

Relying exclusively on foreign AI Application Programming Interfaces (APIs) could expose India to long-term technological dependence, licensing restrictions, supply disruptions, and strategic vulnerabilities.

Therefore, India needs indigenous capability to develop, train, host, and operate Large Language Models (LLMs) within the country.

Initiatives under the IndiaAI Mission, along with indigenous companies such as Sarvam AI, represent important steps toward building Sovereign AI Infrastructure, reducing dependence on foreign AI providers.

Just as India's space programme, nuclear programme, and Digital Public Infrastructure became strategic national assets, AI infrastructure is increasingly viewed as a critical component of national technological sovereignty.

Advantages of Open-Source and Sovereign AI Models

Developing open-source AI models offers several strategic advantages.

They strengthen technological independence by reducing dependence on proprietary foreign AI platforms and minimizing recurring licensing costs.

Open-source models can be adapted efficiently for all 22 Scheduled Indian Languages, enabling inclusive AI applications across India's diverse linguistic landscape.

Their transparent architecture improves auditability, making them especially suitable for sensitive government applications requiring accountability and public trust.

Furthermore, sovereign AI systems provide greater control over data residency, cybersecurity, privacy protection, and regulatory compliance, ensuring that critical national data remains within India's jurisdiction.

Diversification of Computing Infrastructure

Excessive dependence on a single AI hardware provider—particularly NVIDIA—could create financial and strategic risks.

Experts recommend diversifying India's AI computing infrastructure through multiple hardware platforms.

A balanced approach could involve:

• Approximately 40% computing capacity based on AWS Trainium and AMD hardware for cost-effective inference.

• Around 30% utilizing Google Tensor Processing Units (TPUs) for academic research and AI model training.

• The remaining 30% relying on NVIDIA GPUs for advanced AI workloads requiring maximum computational performance.

Such diversification would lower costs, prevent vendor lock-in, improve resilience, and strengthen India's technological autonomy.

Proposed National AI Token Policy

A phased implementation strategy has been suggested for building India's AI ecosystem.

Phase I would involve launching a National AI Token Policy, establishing sovereign AI computing partnerships, and providing unrestricted AI access to premier institutions such as IITs, IISc, and national research laboratories.

Phase II would expand affordable AI access to universities, start-ups, and innovation ecosystems while establishing AI sandboxes and integrating AI literacy into school education.

Phase III would focus on developing sovereign Indic AI benchmarks, deploying AI across sectors such as healthcare, agriculture, judiciary, and education, and ensuring high-quality AI services in all major Indian languages.

Significance for India

Treating AI as Digital Public Infrastructure has the potential to democratize access to cutting-edge technology, stimulate innovation, improve governance, strengthen research, enhance productivity, and generate high-value employment.

Affordable AI access can significantly improve learning outcomes, scientific research, public service delivery, healthcare diagnostics, judicial efficiency, agricultural advisory services, and industrial competitiveness.

By building sovereign AI infrastructure, promoting open-source innovation, and ensuring affordable AI tokens, India can reduce technological dependence while becoming a global leader in trustworthy, inclusive, and multilingual Artificial Intelligence.

Conclusion

India's remarkable success with Aadhaar, UPI, and the Affordable Data Revolution demonstrates that well-designed Digital Public Infrastructure can transform society at an unprecedented scale. Extending the same philosophy to Artificial Intelligence through affordable AI tokens, sovereign computing infrastructure, and open AI ecosystems can usher in a new era of innovation-led economic growth. With timely policy support, sustained investment, and strategic public-private collaboration, India has the opportunity not only to participate in the global AI revolution but also to emerge as one of its leading architects, accelerating its journey towards Viksit Bharat 2047.