India has embarked on an aggressive drive to attract more than $200 billion in artificial intelligence infrastructure investments over the next two years to position itself as a global hub for AI computing and applications at a time when capacity, capital and regulation are becoming strategic assets.
The plan was outlined by India’s IT Minister Ashwini Vaishnaw (pictured above) on Tuesday at the five-day AI Impact Summit in New Delhi, supported by the Indian government, attended by senior executives from OpenAI, Google, Anthropic and other global technology companies. To attract investment, the government is rolling out a mix of tax incentives, state-backed venture capital and policy support to attract more of the global AI value chain to the South Asian country.
India’s announcement comes as US tech giants including Amazon, Google and Microsoft have already pledged around $70 billion to expand AI and cloud infrastructure in the country. This provides a foundation for New Delhi to argue that it can combine scale, cost advantages and policy incentives to attract the next generation of global AI computing investments.
While most of the expected $200 billion is expected to flow into AI infrastructure, which includes data centers, chips and support systems, with about $70 billion already pledged by big tech companies, Vaishnaw said the Indian government is expected to invest another $17 billion in deep technologies and AI applications, underscoring efforts to capture more of the value chain beyond infrastructure.
These efforts are supported by recent policy decisions. Long-term tax relief for export-oriented cloud services and Rs 1,000 billion (approx. ($1.1 billion) is a government-backed venture program targeting high-risk fields such as AI and advanced manufacturing. Earlier this month, New Delhi also extended the period for deeptech companies to qualify as startups to 20 years and raised the revenue threshold for startup-specific benefits to 3 billion rupees (about $33.08 million).
“We have seen VCs investing money in dtech startups,” Vaishnaw said during a press briefing on the AI Impact Summit in New Delhi. “We have seen VCs and other players putting money towards large-scale solutions, large-scale applications. We have seen VCs putting money towards further research into cutting-edge models.”
India plans to expand its shared computing capacity under the IndiaAI Mission beyond the existing 38,000 GPUs, with another 20,000 units expected in the coming weeks, signaling the next phase of India’s AI strategy, the minister said.
Vaishnaw said the government is preparing the second phase of its AI mission with a greater focus on research and development, innovation, and widespread diffusion of AI tools, along with further expansion of shared computing capacity, as India seeks to expand access to AI infrastructure beyond a small group of companies.
The push also faces structural challenges, including access to reliable power and water for energy-intensive data centers, and highlights execution risks as India seeks to compress years of AI infrastructure build-out into a much shorter time frame.
Vaishnaw acknowledged the challenge, saying the government is aware of the pressure AI infrastructure is putting on power and water resources, and pointed to India’s energy mix, where more than half of installed generation capacity comes from clean sources, as an advantage as data center demand grows.
Whether India can realize that vision will also matter beyond its borders, as companies seek new locations for AI computing amid rising costs, capacity constraints and increasing global competition.
