India should avoid chasing frontier AI models and instead focus on practical, application-driven artificial intelligence, according to the Economic Survey 2025–26. The survey cautions that competing in the global race to build large, capital-intensive frontier models may not be the most efficient or inclusive strategy for the country.
The report highlights that frontier AI development requires massive investments in compute power, energy, data centres, and specialised talent—areas currently dominated by a few global technology giants. For India, the opportunity lies not in replicating these efforts, but in leveraging AI to solve real-world problems across sectors such as healthcare, education, agriculture, governance, logistics, and manufacturing.
The Survey emphasises that India’s strengths lie in its large talent pool, strong digital public infrastructure, and diverse use cases. By focusing on domain-specific AI applications, cost-effective models, and scalable deployment, India can drive productivity gains and inclusive growth without incurring the risks of an expensive AI arms race.
It also calls for investment in AI infrastructure, data quality, skilling, and responsible governance, ensuring that AI adoption benefits small businesses, startups, and public services.
Policy experts say the message marks a pragmatic shift—positioning India as a smart adopter and innovator of AI, rather than a frontier model contender. The Survey’s approach aligns AI strategy with economic realities, prioritising impact, accessibility, and long-term value over prestige-driven competition.
