For decades, India’s IT powerhouses have been the backbone of the global technological revolution, supplying code and talent that have shaped modern digital infrastructure. However, with artificial intelligence (AI) poised to upend the very foundation of software services, the world’s largest outsourcing hub must now make a decisive shift toward AI-driven innovation. The urgency of this challenge cannot be overstated, as India risks being left behind by AI powerhouses like the United States and China if it does not act swiftly.

The emergence of cost-effective, open-source AI models—such as those developed by Chinese start-up DeepSeek—signals a paradigm shift in the global tech landscape. AI’s ability to automate complex processes, enhance decision-making, and create new revenue streams is compelling forward-looking organisations to recalibrate their focus. According to Raj Kapoor, founder and chairman of the India Blockchain Alliance, AI is no longer a futuristic concept but an immediate necessity.

A recent International Monetary Fund report warned that nearly 40 per cent of jobs worldwide could be affected by AI-driven automation. Meanwhile, India’s dominant software services market, which holds a commanding 44 per cent global share, is facing slowing growth, with an annual expansion rate projected at just 11.9 per cent through 2028. In stark contrast, the AI sector is set to grow at a staggering 37.3 per cent annually between 2024 and 2030, according to data cited by Kapoor.

Recognising the stakes, the Indian government has taken initial steps to foster AI development. In March 2023, it launched the $1.25 billion “IndiaAI Mission" aimed at nurturing start-ups and building AI infrastructure. Additionally, a modest $575,000 allocation in the........

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