AI'S DOLLAR DRAIN

INDIA’S OVERDEPENDENCE ON FOREIGN ARTIFICIAL INTELLIGENCE MODELS RISKS A LARGE FOREX OUTFLOW, ESPECIALLY AS MANY OF THEM ARE CURRENTLY FREE FOR END USERS. CAN LOCAL ALTERNATIVES CATCH UP TO ARREST DOLLAR FLIGHT IN THIS FOUNDATIONAL TECH?

- BY SHELLEY SINGH

AS ARTIFICIAL INTELLIGENCE (AI) enters banking, healthcare, coding, education and enterprise workflows, India risks building its next digital revolution on foreign models, cloud infrastructure and compute.

While India already has an oil and gold import bill burden, experts caution that it might get compounded by AI. This would be driven not by cargo shipments, but by subscriptions, cloud services, inference charges, graphics processing units (GPUs) access and AI infrastructure controlled by global technology companies.

All our AI assistance is imported. Gemini, ChatGPT, Claude, Perplexity, Copilot and others are foreign AI models powering our synthetic intelligence. Mostly free for end users at present, with paid versions for users and enterprises offering a better experience, these could eventually burn a hole in India’s pocket, potentially creating a new category of import, i.e., intelligence. The risks are not about something being done in labs to train models. Inference is the use of AI models for practical applications like fraud detection, medical diagnosis, language translation, research, and driverless cars, among others. In FY26, India spent over $206 billion on crude oil and gold imports. According to the Ministry of Commerce and Industry data, crude oil imports were $134.7 billion, and gold imports stood at $71.98 billion. AI subscriptions are nowhere near this yet. AI, however, is increasingly becoming the cognitive layer sitting atop economies, governments, enterprises and digital public infrastructure.

“The dominant models powering Indian enterprises and developer workflows, including OpenAI’s GPT series, Google Gemini, Anthropic Claude, etc., are built, governed and monetised entirely outside India,” says Amit Chand, founder of BYT Capital (which has backed AI ventures). Even access to newer models like Anthropic-owned Mythos, which can completely change the cybersecurity landscape, is tightly controlled.