Chandrajit Banerjee | AI for industrial competitiveness: India role rises in global landscape

Artificial Intelligence (AI) is rapidly transforming industries, reshaping global competitiveness and fostering economic growth. Across sectors such as manufacturing, healthcare, agriculture, finance, and retail, AI is unlocking efficiencies, enabling predictive analytics, and driving automation. For India, AI is not merely a technological advancement but a strategic imperative that has the potential to redefine industrial capabilities, enhance productivity, and create a new wave of economic opportunities. Under the leadership of Prime Minister Narendra Modi, and ably steered by Union minister Ashwini Vaishnav, the country has undertaken ambitious initiatives to integrate AI into its industrial framework. With India having co-chaired the AI Summit in Paris earlier this week (Prime Minister Modi with French President Emmanuel Macron), its role as a key player in shaping global AI governance and innovation is gaining prominence. However, as AI adoption accelerates, challenges such as ethical governance, inclusiveness, affordability and international collaboration must be addressed to ensure AI’s responsible and widespread deployment.

AI’s role in enhancing industrial competitiveness is undeniable. In manufacturing, AI-driven predictive maintenance, smart automation, and real-time monitoring are reducing downtime, improving production efficiency, and ensuring quality control.

The agriculture sector is witnessing AI-powered precision farming, which is enabling better crop yield predictions, resource optimisation, and supply chain improvements.

AI-driven weather forecasting and soil analytics are helping farmers make data-driven decisions to increase productivity and reduce losses. The healthcare industry is undergoing a paradigm shift with AI revolutionising diagnostics, drug discovery, and personalised medicine, significantly improving patient outcomes and healthcare accessibility. In finance, AI is enhancing fraud detection, risk assessment, and automated financial planning, ensuring higher security and efficiency in banking and investment sectors. Similarly, in retail and e-commerce, AI is enabling hyper-personalisation, demand forecasting, and chatbot-driven customer service, making businesses more responsive and consumer-focused. With over 59 per cent of Indian enterprises already integrating AI and about 30 per cent of MSMEs expected to adopt AI by 2025, the momentum is clear. This rapid adoption underscores India’s commitment to leveraging AI as a tool for economic empowerment and global competitiveness.

As AI becomes a crucial enabler of industrial competitiveness, India is actively engaging with global stakeholders to ensure responsible AI deployment, data sovereignty, and ethical AI governance. Through strategic alliances with countries such as the United States, Britain and France, India is working towards building a robust AI ecosystem that supports innovation and technological advancements.

However, widespread AI adoption must be accompanied by ethical AI governance to prevent bias, privacy violations, and societal disruptions. AI systems must be transparent, fair, and accountable to maintain public trust and regulatory compliance.

India’s National AI Strategy -- AI for All lays the foundation for responsible AI deployment, aligning with global ethical standards. The government has implemented frameworks such as the India AI Mission, ensuring that AI applications adhere to fairness, accountability, transparency, and security principles. The Responsible AI Principles, introduced under this mission, mandate that AI decisions be explainable, unbiased, and privacy-focused. As AI continues to be integrated into critical decision-making processes, ensuring strong regulatory oversight and ethical safeguards will be vital for sustainable AI deployment.

Affordability and inclusiveness are also central to India’s AI adoption strategy. AI should not remain confined to large enterprises; it must be accessible to start-ups, MSMEs, and rural communities. Recognising this, the Indian government has allocated Rs 2,000 crores to enhance AI infrastructure and reduce computational costs.

Compared to global AI computation costs of $2.50-$3 per hour, India’s AI computation cost is projected to fall below Rs 100 per hour, making AI solutions affordable for businesses of all sizes. Initiatives such as the Rs 10,000-crore Fund of Funds are actively supporting AI-driven start-ups, fostering entrepreneurship and innovation.

Programmes like Digital India Bhashini have translated over 350 AI models into 10 Indian languages, ensuring that language barriers do not hinder AI accessibility. AI-backed rural development initiatives are enhancing agricultural decision-making, improving healthcare access, and driving financial inclusion, thereby bridging the urban-rural digital divide.

India’s AI engagement extends beyond domestic initiatives. The country is actively contributing to global AI discussions on regulation, ethics, and governance. At the Paris AI Action Summit, India had strongly advocated AI frameworks that are inclusive, transparent, and aligned with the principles of responsible AI. With its leadership in affordable AI solutions, India can play a crucial role in ensuring that AI benefits extend beyond technologically advanced nations to developing economies, particularly in Asia and Africa. By sharing expertise in AI-driven healthcare, financial inclusion and agri-tech, India can contribute significantly to a more balanced and fair AI-driven global economy.

Looking ahead, India’s AI-driven future is one of immense promise. The government’s progressive AI policies, strategic global partnerships, and commitment to inclusive innovation are positioning the country as a global AI powerhouse. With the Paris AI Action Summit that was addressed by Prime Minister Narendra Modi this week, India’s leadership in AI adoption, ethical governance, and affordability will serve as a model for the world. AI is not just a technological breakthrough -- it is a fundamental driver of economic resilience, industrial transformation, and societal progress. By ensuring responsible AI adoption, fostering innovation, and strengthening international collaborations, India is paving the way for an AI-powered industrial revolution that benefits businesses, citizens, and the global economy.

The writer is the director-general of the Confederation of Indian Industry