India's AI Growth: Government Allocates Major Funds to Boost Innovation & Startups
The AI4India Weekly #48
We explore a series of groundbreaking developments shaping the AI landscape in India and globally. Union Minister Ashwini Vaishnaw shares India’s AI and electronics manufacturing vision, while innovations like the Kompact AI platform promise to make high-performance AI more accessible across the country. Meanwhile, India’s commitment to becoming a global leader in artificial intelligence is evident as the government announces a major allocation from its ₹10,000 crore Fund of Funds Scheme to support AI and deep tech startups. Additionally, People+AI has successfully concluded its (A)I Promise project, providing new resources to help organizations build ethical AI that fosters trust and transparency. Stay tuned for more exciting news, including India’s rising role in the global AI race and updates from the Bharat Digital Healthcare Summit.
India Ramps Up Momentum in Electronics and AI: Vaishnaw
Speaking at the News18 Rising Bharat Summit 2025, Union Minister Ashwini Vaishnaw outlined a confident and forward-looking vision for India’s role in electronics manufacturing and artificial intelligence. He reaffirmed the country’s strong momentum in electronics, noting a 17% CAGR over the past five years and a 6x increase in exports over the last decade. With 25 lakh people now employed in the sector—many of them women—Vaishnaw emphasized that India is following the same successful trajectory once seen in South Korea and Vietnam. He also noted that the PLI scheme remains open to all companies, including Chinese players like Vivo and Oppo, as long as they align with India’s aspirations and operate transparently.
Turning to AI, Vaishnaw stated that India is firmly in the race and preparing to develop its own indigenous AI model. Highlighting India’s robust compute infrastructure and skilled talent pool, he pushed back on the idea that the country is lagging behind, calling this only the first chapter of the AI revolution. With chip manufacturing set to begin this year and validation already underway, Vaishnaw revealed that India will soon produce its first Made-in-India chip—a critical milestone for digital independence. He also called for careful adoption of AI to ensure national control and minimize biases, reinforcing India’s commitment to ethical tech development.
India Emerges as Digital Transformation Leader in the Global South
India is increasingly recognized as a leader in the Global South, driven by its significant strides in digital transformation, particularly in the realm of Digital Public Infrastructure (DPI). At the Carnegie Global Technology Summit, MeitY Secretary S. Krishnan highlighted India's commitment to sharing its DPI advancements with other nations, emphasizing the country's role in fostering global digital inclusivity. India has already signed Memorandums of Understanding with several countries to collaborate on DPI initiatives, underscoring its dedication to extending the benefits of its digital innovations beyond its borders.
In addition to its DPI efforts, India is making notable progress in the field of Artificial Intelligence (AI). The IndiaAI Mission, launched in March 2024, aims to democratize AI benefits and bolster India's global leadership in AI development. The mission encompasses the development of AI ecosystems, including the evaluation of AI-Large Language Model applications, which are currently in the final stages of assessment. With approximately 15,000 GPUs dedicated to AI compute and plans to expand further, India is poised to make AI accessible through its DPI framework, particularly benefiting nations in the Global South. This initiative reflects India's vision of leveraging emerging technologies not just for domestic advancement but also for global good.
People+AI Closes AI Promise Project with New Product Kit and Training Materials
After months of collaboration and input from numerous volunteers, People+AI has successfully concluded the (A)I Promise project, which aims to help organizations build trust in AI. The (A)I Promise is a self-declared commitment by AI developers and companies to ensure that their AI products and services are ethical and transparent. This initiative includes a comprehensive set of Statements that organizations can adopt, endorse, and declare to their users, outlining their dedication to trustworthy AI. These statements serve as clear, relatable, and actionable promises that help organizations make their ethical commitments tangible.
Additionally, People+AI has released a Product Kit that contains valuable resources for promoting these principles internally. The kit includes an overview of what the (A)I Promise is (and isn't), as well as training materials, sample emails, and a badge for teams that make their ethical promises public. The product kit is designed to help companies evangelize the importance of ethical AI development among their employees, ensuring that these values are integrated into daily practices. Organizations committed to building AI that earns trust can access the full resources and explore the potential of the (A)I Promise on their official website.
U.S. AI Diffusion Framework: Implications for India and the Global South
The United States has introduced an AI diffusion framework aimed at regulating the export of AI technologies, including model weights and AI chips, to maintain its technological edge and address national security concerns. This framework categorizes countries into tiers, influencing their access to U.S. AI technologies. India, placed in the middle tier, faces certain restrictions compared to top-tier allies like Australia. These measures reflect the U.S.'s strategic approach to AI governance and its implications for global technology partnerships.
For India, this framework presents both challenges and opportunities. While it underscores the need for India to bolster its indigenous AI capabilities and reduce reliance on external technologies, it also highlights the importance of strategic collaborations. India's initiatives, such as the IndiaAI Mission and the development of Digital Public Infrastructure, position it to play a pivotal role in shaping equitable AI governance. By fostering partnerships and investing in domestic AI research and development, India can navigate the evolving global AI landscape effectively.
IIT Madras and Ziroh Labs Launch Centre of AI Research to Democratise Compute Accessibility
IIT Madras and IITM Pravartak Technologies Foundation have partnered with California-based deep-tech startup Ziroh Labs to launch the Centre of AI Research (COAIR), aimed at solving India’s compute accessibility challenges. At the core of this effort is Kompact AI, a new platform that enables the development and deployment of foundational AI models using CPUs instead of costly GPUs. Optimised for models like DeepSeek, Qwen, and Llama, Kompact AI drastically reduces infrastructure needs, making high-performance AI accessible in rural and underserved areas without constant internet connectivity. The initiative aligns with India’s “AI for All” mission and offers a sustainable, scalable alternative to current GPU-dominated AI frameworks.
Backed by IIT Madras researchers and industry partners like HCLTech, Kompact AI is being hailed as a breakthrough in frugal innovation. It supports over 10 programming languages and provides a CPU-optimised model library across domains like text, speech, and vision. By enabling smaller, domain-specific models to run efficiently on everyday devices, this initiative directly addresses the risk of an AI divide. As Prof. V. Kamakoti noted, such efforts reflect a shift toward nature-inspired, context-specific AI that is both affordable and impactful for real-world applications.
Healing with Code: AI’s Expanding Role in Indian Healthcare
The Bharat Digital Healthcare Summit 2025, held on April 12 in New Delhi, emerged as a cornerstone event accelerating India’s digital health transformation. Bringing together healthcare leaders, policymakers, and tech innovators, the summit championed the use of digital technologies—especially AI—to bridge gaps in accessibility and care delivery. With the Ayushman Bharat Digital Mission already linking over 76 crore health accounts, speakers highlighted how India is becoming a global leader in digital health. From AI-powered diagnostics and wearable health tech to telemedicine’s expanding reach in rural India, the summit emphasized that digital health is no longer a concept, but a movement. Leaders from BSNL, NHA, STPI, and private hospitals echoed a shared belief: AI and robust connectivity are redefining healthcare for every Indian.
Speakers like Dr. R.S. Sharma, former CEO of the NHA, and Shri A. Robert J. Ravi of BSNL stressed the need for secure data access, ethical AI design, and connectivity infrastructure. AI’s role in precision medicine, mental health support, and global health initiatives was a recurring theme. Institutions like STPI showcased how they are fostering health-tech startups through initiatives like NGIS and MedTech Centres of Excellence. From wearable tech to AI-driven virtual consultations, the summit showcased a future where healthcare is personalized, data-driven, and accessible at the doorstep. Yet, as Rev. Fr. Isidore D'Souza and Dr. Upasana Arora reminded attendees, the human touch must remain central. In this revolution, technology and compassion must go hand in hand.
India Bets Big on AI and Deep Tech with New ₹10,000 Cr Fund
In a bold move to foster innovation, the Indian government has allocated a major portion of its ₹10,000 crore Fund of Funds Scheme (FFS) to boost startups in artificial intelligence (AI), machine building, and new-age technologies. This fund, managed by the Small Industries Development Bank of India (SIDBI), is part of a larger vision to create a thriving ecosystem for tech-driven startups. The scheme mirrors the 2016 initiative aimed at enhancing venture capital investments, with funds being channeled through Alternative Investment Funds (AIFs) registered with SEBI. These AIFs will, in turn, invest in emerging startups, providing them with the financial backing needed to scale and innovate.
The government’s focus on AI and deep tech is strategically aligned with India’s goal to become a global leader in these sectors. The initiative also ties into the Startup India programme, which has recognized over 1.5 lakh businesses in more than 55 sectors. By dedicating significant resources to AI and machine technology, the government is not only supporting the development of disruptive technologies but also aiming to foster a culture of innovation that will drive India's economic future. This fund will help create an ecosystem where tech startups can thrive, providing them with the tools and support necessary to make breakthroughs in artificial intelligence, machine learning, and other transformative fields.
AI Buzz of the Week: Memory: The Next Leap in Personalized AI
In a groundbreaking update from OpenAI last week, AI models have taken a significant step forward by gaining the ability to remember and store large amounts of information shared by users. Previously, AI systems struggled with retaining user-specific data, limiting their ability to offer truly personalized interactions. With this new feature, AI models can now recall past conversations, preferences, and insights, allowing them to develop a deeper understanding of individual users over time. This advancement promises to enhance user experience, as AI systems become more intuitive, responsive, and tailored to specific needs. The ability to "remember" creates opportunities for more seamless, human-like interactions, moving AI closer to becoming a more effective and engaging tool in everyday tasks.
#DataDaan - Donate for a Digital India
Aligned with the IndiaAI Mission and MeitY’s efforts to ensure the availability of AI-usable data, the #DataDaan campaign by AI4India is now live on DataDaan.org. This initiative invites individuals and organizations to contribute valuable datasets, enriching India’s AI ecosystem and driving innovation across sectors. The platform provides a streamlined process for data contribution, ensuring responsible and impactful AI development. Visit DataDaan.org to explore the initiative and be part of this transformative effort.
NOTE: The views expressed by the authors are their own. AI4India as a forum does not endorse any comments on specific brands, products, platforms or companies.
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