By Sunil Nehra, CEO – IT Staffing, FirstMeridian Business Services
Artificial Intelligence (AI) has emerged as one of the most transformative forces of our time. As we enter the era of Industry 5.0, the synergy between AI, machine learning (ML), automation, and human expertise is set to drive productivity, sustainability, and resilience to new heights. From AI-powered solutions like Niramai which are helping diagnose diseases early to AI platforms like AgNext, which are assisting farmers in optimising their crops and reducing water wastage, we have witnessed impressive growth in AI applications, particularly in sectors that directly impact the lives of its people. Building on this momentum, the Indian government has recognised the vital role of AI in shaping the country’s future. By launching initiatives aimed at fostering AI research, development, and application, the government is ensuring that AI’s potential is fully realised across the nation. The National AI Strategy, developed by NITI Aayog, has been a cornerstone of these efforts. Furthermore, the establishment of AI Centres of Excellence (CoEs) across the country has catalysed AI research and innovation, creating a bridge between academia, industry, and the government.
Further impetus to this came with Union Budget 2025-26, which allocated ₹500 crore for AI Centres of Excellence. This bold intervention underscores the government’s commitment to accelerating India’s position as a global leader in AI through initiatives like Atal Tinkering Labs, fostering AI skills among young minds, and the Bharat Bhasha Pustak Scheme, promoting AI literacy. By addressing the skills gap, the budget is not just investing in AI infrastructure but also in creating a future-ready workforce capable of driving India’s AI aspirations.
The 2025 Budget reflects a deep understanding of the challenges India faces in its pursuit of AI leadership, but it also offers significant solutions. A key area of focus is talent development, as India boasts one of the largest pools of AI talent in the world. With over 1.2 million engineering graduates in 2022, many trained in AI and machine learning, India has a strong talent base. The challenge now lies in creating an ecosystem that nurtures this expertise, ensuring innovation thrives within the country rather than being lost to global competition.
We, as a nation, can build a thriving AI ecosystem by nurturing homegrown talent through government-backed incubators, research facilities, and private sector partnerships. Strengthening this infrastructure will enable young professionals to stay in India and contribute to both domestic and global advancements. Additionally, incentivising returnees and fostering global collaborations will be key to retaining and growing India’s AI workforce.
As Western nations, particularly the U.S. and China, dominate AI research, global tech giants like Google, Microsoft, and Amason continue to invest billions, pushing innovation forward while attracting India’s brightest minds with lucrative opportunities. To address our struggle with talent migration, the 2025 Budget reflects a strategic and decisive step by prioritising AI startups, public-private partnerships, and world-class research hubs.
This isn’t just about keeping talent within the country, it’s about fostering an environment where Indian professionals and entrepreneurs can innovate freely, positioning India as the epicenter of AI-driven solutions. The country’s ability to develop cost-effective, tailored AI for emerging economies presents a unique global advantage. A vast talent pool, a rapidly expanding digital ecosystem, and targeted government interventions create an opportunity to lead in AI for developing nations while competing globally.
However, challenges remain. While the 2025 Budget lays the groundwork for AI advancement, competition from Western nations is intense. India must bridge gaps in high-performance computing infrastructure and research funding, areas where heavy investment has given the West a head start. To stay competitive, India must drive international collaborations, attract private-sector investments, and establish world-class research hubs. Looking ahead, India’s AI leadership will depend on its approach to ethics, innovation, and regulation. Over the next five years, the country has the opportunity to set global standards in responsible AI, ensuring inclusivity, fairness, and privacy. By investing in sustainable AI solutions that address local and global challenges, India can define its position in the AI race. The path forward demands strategic investments in research, infrastructure, and talent, but with vision and determination, India is well-positioned to emerge as a global leader in AI-driven innovation.
