India has not lost the artificial intelligence race and should focus on building an advantage in AI applications rather than trying to match the US and China in the large language model race, Amitabh Kant said.
The former NITI Aayog CEO pointed to India's data advantage, technology talent and a projected $200 billion data-centre investment pipeline as factors that could position the country as a major hub for AI applications.
Speaking at an event and in a post on X, Kant argued that while the LLM race may be dominated by competition between the US and China, “the application world is open to India.”
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$200 Billion Data Centre Opportunity
Kant said the scale of data-centre investment coming into India is unprecedented. He pointed to almost $200 billion of planned investments and said this would mean more data being processed in India, while talent and global capabilities increasingly move to the country.
He also cited the Stanford AI Index and pointed to India's growing ability to attract AI talent and global capability centres.
Kant said India should use this advantage to build AI applications across sectors such as pharma, healthcare, manufacturing, education and nutrition rather than focus only on developing foundation models.
He also warned that India's education and skilling systems need to change rapidly. AI should be introduced into schools and colleges, while curricula at IITs, IIITs and IIMs need to be updated for the AI economy.
Many think India has lost the AI race. We haven't.
— Amitabh Kant (@amitabhk87) August 22, 2026
With $200 billion in data center investments coming in, 22% of global data, top class AI talent, progressive data policies, India is positioned to lead in AI applications across pharma, health, manufacturing and more. The LLM…
India Needs 1,500 GW Renewable Capacity
Kant said the AI opportunity cannot be separated from India's energy requirements. He pointed out that India imports around $180 billion of fossil fuels, while the fossil-fuel import bill for the first six months had risen 43%.
He said India has already built close to 300 GW of renewable-energy capacity but needs to accelerate the pace substantially. Kant argued that India's earlier target of 500 GW of renewable capacity should be raised to 1,500 GW by 2030, supported by stronger transmission, storage and power-evacuation infrastructure.
He said almost 30 GW of renewable power is currently held up because of inadequate evacuation capacity. India also needs 24x7 renewable-energy availability, storage and nuclear power as baseload capacity, he said.
Cost Of Doing Business Key To Growth
Beyond AI, Kant said India needs to bring down the cost of doing business if it wants to sustain growth of 8.5-9% for three decades.
He identified the cost of credit, electricity, land and logistics as major constraints. While manufacturing businesses can access credit at around 3.5-4% in China and 4.5% in Vietnam, Indian MSMEs can face rates ranging from 8.99% to about 20% when informal credit is included.
Kant also compared land policies, noting that Chinese states provide industrial land on leases of 90 or 99 years, while India's land costs remain high. Logistics costs and last-mile connectivity between rail networks and ports also need to improve.
He said India must become more competitive rather than rely indefinitely on incentives such as the Production-Linked Incentive scheme.
Manufacturing, Startups And Tourism
Kant said manufacturing, defence, space, tourism and startups will be critical to India's growth and job creation. He highlighted the potential of manufacturing-led urbanisation and said defence manufacturing could bring significant technology inflows.
Tourism, he said, is another underused source of employment. With Indian airlines expected to acquire close to 2,000 aircraft, India needs to attract foreign tourists rather than simply facilitate Indians travelling abroad. Kant said tourism can create 13 indirect jobs for every direct job.
He also stressed the role of startups in driving disruption across electric vehicles, payments, insurance and the space sector. For India to sustain 9-10% growth for three decades, he said, the economy needs continued disruption and the energy of young startups.
India Has A 'Massive Opportunity'
Kant said India is entering a period of major global change, marked by protectionism, tariffs and a shift away from traditional global supply chains. He said India needs to become globally competitive and use its trade agreements to access international markets.
He noted that the US still accounts for around 29-30% of global GDP, making access to the American market critical for India's manufacturing and export ambitions. India has already entered trade agreements covering 55 countries, he said, but domestic manufacturers need to become competitive enough to export into those markets.
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Kant also pointed to India's demographic advantage. While the US, Europe and China are ageing, India remains relatively young. He said that even when India reaches 100 in 2047, its population will have an average age of around 35.
He said India is already adding around 30 km of roads and 15 km of railway lines every day, while accounting for about 50% of digital payments globally.
Kant's broader message was that India has a significant opportunity to accelerate structural reforms and strengthen its competitiveness. He said the country should focus on manufacturing, urbanisation, energy independence, human capital and AI applications to sustain high growth over the coming decades.
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