'No time to waste': Economic survey's AI warning for India amid US-China rivalry

“There is nary clip to waste,” the Economic Survey 2025–26 cautioned, arsenic India confronts a rapidly hardening planetary bid wherever technological capability, alternatively than subject spot alone, volition find strategical influence.

In an epoch marked by intensifying US–China rivalry and the emergence of America’s Pax Silica imaginativeness for the AI-driven world, the Survey said that India needs to alteration from the world’s “IT assemblage backmost office” into an “AI beforehand office”.Arguing that resilience is nary longer enough, the survey stressed the request for “strategic indispensability”—a presumption wherever India becomes truthful captious to planetary worth chains that it cannot beryllium easy substituted oregon coerced.

Drawing parallels with lipid and alloy successful the past century, it noted that the 21st period volition tally connected “compute”—a shorthand for computing power, GPUs and the captious minerals that provender them—reshaping planetary alliances and economical hierarchies.Geopolitical shifts further complicate the landscape. The survey highlighted however the United States is reconfiguring alliances, favouring bilateral commercialized arrangements, export licensing and exertion controls.

Declaring that the 21st period volition tally connected “compute” and the minerals that powerfulness it, Washington has launched the Pax Silica inaugural with prime partners to signifier the AI ecosystem—from vigor and captious minerals to precocious manufacturing and models. The transition of the GENIUS Act connected dollar-backed stablecoins could besides disrupt superior flows to emerging economies, adding to India’s strategical challenges.

Bottom-up attack for AI

The survey noted that the planetary AI scenery has divided into 2 chiseled models.

Western economies person followed a top-down path, dominated by frontier AI models, hyperscale firms, monolithic backstage superior and concentrated intelligence property. Elsewhere, a bottom-up approach—based connected distributed innovation, beardown authorities coordination and application-specific AI—has go the norm. Given India’s constraints and capabilities, the Survey concluded that "India’s presumption successful this landscape, reflecting a chiseled acceptable of constraints and capabilities, marque a bottom-up attack strategically necessary", alternatively than attempting to replicate the capital-intensive exemplary pursued by the US and China.The survey besides noted that India enters the AI epoch with "notable advantages". It is among the apical planetary contributors to AI probe and has a heavy excavation of method talent, supported by an AI-literate workforce ranked 2nd lone to the United States successful 2024. It besides pointed to India’s immense and divers home information arsenic a imaginable comparative advantage, noting that the “heterogeneity and standard of our country” let for the instauration of affluent datasets crossed sectors specified arsenic health, agriculture, concern and governance—an plus that remains importantly underutilised.