Apply India's IT playbook to help AI businesses take off

India must seize this moment to provide AI developers with all they need to leap ahead in this vital space

- RAHUL MATTHAN

When I first heard of DeepSeek, my immediate reaction was one of disappointment. Everyone else was raving about the capabilities of the model and the frugality with which it had been trained, but I couldn't get past the fact that China demonstrated the 'jugaad' I was expecting India to show. DeepSeek proves that it is possible for cutting-edge AI to emerge even under constraints, thanks to workarounds. For India, this should be as much a warning as an inspiration.

I am somewhat surprised to find ourselves in this position. After all, we have a reputation of being an IT powerhouse. In 1992, India's software exports were just ₹17 crore. By 2022, that figure had exploded to ₹8.48 lakh crore—a 16,000-fold increase. Those of us who have been a part of this journey know that none of this was pure chance. India's emergence as a global IT powerhouse is as much the result of deliberate policy choices.

Among these was the Software Technology Parks of India (STPI) scheme, a programme that offered IT businesses a suite of incentives. STPI units were eligible for a complete income tax exemption for ten consecutive years and could import hardware and software into the country completely duty-free. At a time when foreign ownership was severely restricted, 100% foreign direct investment was permitted in these companies through the automatic route. Most states set up single-window clearance facilities that radically simplified the process for availing these benefits.