China's DeepSeek has shaken the AI industry by dramatically reducing the cost of developing generative AI models. While global players like OpenAI and Microsoft see potential in India, the country still lacks its own foundational AI model.

The Indian government aims to change this within 10 months by supplying high-end chips to startups and researchers, but experts warn that structural issues in education, research, and policy could hold back progress.

Despite being a major hub for AI talent, India lags behind the United States and China in research, patents, and funding. State-backed AI investments are significantly smaller than those in the two superpowers, and limited private investment further slows progress.

The outsourcing industry, which dominates India's tech sector, has traditionally focused on services rather than developing AI innovations, leaving startups to bridge the gap.

Some industry leaders believe India can still make rapid advancements by leveraging open-source AI platforms like DeepSeek. However, long-term success will require building a strong research ecosystem, boosting semiconductor production, and securing strategic autonomy in AI.

Without these efforts, experts caution that India may struggle to compete on the global AI stage in the coming years.