In the 2000s, the Indian economy grew at spectacular rates. Those were heady years, as the growth rate accelerated on the back of a steady flow of foreign direct investment (FDI). From Mumbai to Bengaluru (it was still Bangalore then), there was genuine excitement. India was truly shining. Towards the fag end of the decade, annual FDI touched nearly $40 billion.
At the time, $40 billion was truly something. Most of that investment went into traditional sectors such as telecom, metals, automobiles, energy and old-world manufacturing. In those years, India had no digital rails, a nascent startup ecosystem and no public cloud strategy.
A similar excitement is in the air today. After the doom and gloom of the Covid-19 years, India's economic engine has slipped back into fifth gear. Investor confidence in the India story has been fully restored. Compared to the world of the 2000s, the picture today is dramatically different. India is now part of the global high-tech chain: semiconductors, AI, cloud, data centres, electronics. The shift is seismic.
Best Of Times?
In this backdrop, Big Tech has entered India with confidence and deep pockets. Since October, they have been lining up at India's doorstep with cheque books open. Amazon has promised $35 billion. Microsoft has committed $17.5 billion. Google is building a $15 billion AI data hub. Intel has tied up with Tata to anchor India's semiconductor ambitions. After adding a few other players, India has attracted more than $80 billion in fresh tech pledges within weeks. And this is on top of India's already strong post-pandemic annual FDI inflow of more than $80 billion. Not long ago, we struggled to attract foreign capital. The sudden surge today feels almost electric. So what has changed?
A lot of businessmen and investors here are wondering what has changed in India, why the world's richest tech companies are betting so aggressively on a market that, they insist, still wrestles with paperwork, state-level delays and regulatory bottlenecks. They ask why Big Tech would take this risk when the US under President Trump is nudging them to invest at home.
It is not very difficult to answer these questions. Consider this: India offers what no other democracy can. A digital universe of at least a billion people. The world's second-largest pool of tech talent. A market where cloud consumption is growing faster than almost anywhere else. A state that has made AI infrastructure, semiconductor production and packaging and public digital platforms the spine of its next economic phase.
AI models devour data. They need millions of testers. They need languages - India offers at least 22, along with accents and behavioural patterns. They need engineers who can train, tune and monitor them. India has all four in abundance. That is why India beckons Big Tech.
But there is a deeper story under the headline numbers. These tech giants are not simply building data centres. They are embedding themselves into India's long-term economic story, at least for 20-30 years.
The government's move may be overdue, but it arrives at a decisive moment. A national sovereign AI framework is slated to roll out in February. The outline is clear. Public datasets, compute grids, domestic model building, Indian language AI, sector-specific guidelines, safety checks and incentives to build indigenous AI capability. It will be India's attempt to ensure that intelligence, like data, becomes a strategic public resource. The new policy will formalise what the world is already sensing. India intends to build AI, not just consume it.
The Largest Applied AI Market
Where does India stand in the AI world right now? Not at the top. But it is breaking into inner circles. The US and China dominate foundational model-building, but India has the talent to power the global industry. It has training data worth more than 22 major languages. It has UPI, Aadhaar, DigiLocker and ONDC. It has one of the world's cheapest compute-to-labour cost ratios. It has the world's largest youth workforce. What India lacks in semiconductor fabrication and frontier model labs, it makes up for in scale and human capital. With the right policy push, India can become the world's largest applied AI market.
The latest tech pledges go far beyond symbolic interest. Amazon's $35 billion plan will expand India's cloud backbone and build new AI infrastructure. Microsoft's over $17 billion commitment includes a hyperscale cloud region in Hyderabad, going live in 2026, and access to a sovereign cloud that allows sensitive Indian data to stay within the country. Google's AI hub brings compute muscle India has never had before. Intel's partnership with Tata means India finally has a credible foothold in the semiconductor ecosystem, something it has tried to build for decades. These investments create jobs, supply chains and training pipelines. They nurture startups. They reduce dependency on imported cloud and AI models. They amplify domestic innovation.
But do pledges always become reality, one might ask. Not always. Land approvals can drag. Water supply for data centres can become complicated. Power distribution can slow timelines. Local politics can intervene. Even the best laid plans can wobble. Some pledges will take longer. Some will shrink. Some will be renegotiated. But the direction is clear. Data centres and cloud regions are not easily shifted once planned. Talent ecosystems take years to build, and once they form, companies do not walk away casually. The Indian market has become too large and central to the future of AI for global firms to ignore or abandon.
India Needs To Match The Momentum
The opportunity is coming. The question is what India must do next. Policies alone are not enough. India needs reliable power grids, fast-track clearances, transparent data governance rules, predictable taxation, seamless inter-ministerial coordination and long-term planning for energy and water. India is growing fast and cannot afford the delay culture if it wants to become an AI superpower.
Educational institutions face an equally urgent challenge. Many engineering colleges still teach curricula built for the early 2000s. Some elite institutions have upgraded, but the majority lag behind the industry's pace. Experts emphasise India needs AI labs across campuses. It needs machine learning courses integrated with practical cloud exposure, partnerships with global cloud providers, updated syllabi for chip design, cybersecurity, robotics and human AI collaboration.
India now has the confidence of the world's biggest tech firms at a time when other large markets are slowing or turning inward. This is India's sunshine moment. And the world is watching because the stakes are enormous.
(Syed Zubair Ahmed is a London-based senior Indian journalist with three decades of experience with the Western media)
Disclaimer: These are the personal opinions of the author
