Why India Lags in the Global Tech Race?
India never misses a chance to celebrate its scientific past. Aryabhata mapped planetary motion centuries before Copernicus. Brahmagupta gave the world zero, a cornerstone of mathematics. Sushruta’s surgical techniques and the Iron Pillar of Delhi’s rust-proof metallurgy were marvels ahead of their time. These weren’t borrowed ideas—they were original, bold, and risked pushing boundaries. That legacy proves India’s capacity for innovation. So why, in a world where the U.S. and China dominate tech headlines with AI, cloud computing, and semiconductors, does India seem stuck in their shadows? With 1.4 billion people and a talent pool producing CEOs like Sundar Pichai (Google), Satya Nadella (Microsoft), and Arvind Krishna (IBM), the question isn’t if India can compete globally — it’s why hasn’t it yet?
The Outsourcing Triumph and Trap
India’s tech story is a paradox of success and stagnation. In 1990, its software and services exports were a mere $100 million. Today, they’re projected to hit $210 billion, capturing 18% of global IT outsourcing. Companies like TCS, Infosys, and Wipro turned India into the world’s digital back office, serving Fortune 500 clients with cost-effective solutions. It’s an economic win—but it’s not innovation. While Silicon Valley built Amazon and OpenAI through high-risk product development, the country mastered service delivery. Outsourcing thrives on stability, not disruption.
Contrast this with China, where government-backed giants like Alibaba and Huawei scaled globally in e-commerce and telecom, or the U.S., where OpenAI’s $10 billion Microsoft infusion birthed ChatGPT. These leaps required massive R&D—China spends 2.4% of GDP on research, the U.S. 3.5%, while India limps at 0.7%. Its IT boom didn’t “miss the bus”—it boarded a different one, prioritizing short-term gains over long-term invention. The result? A thriving industry, but no Indian equivalent to Google or Tencent.
Startup Stumbles: Local Heroes, Not Global Giants
India’s startup ecosystem—boasting 1,59,157 DPIIT-recognised ventures as of January 2025—brims with potential. Flipkart could’ve been India’s Amazon, but after burning cash to fend off Jeff Bezos’ giant, its investors (Tiger Global, SoftBank) opted for a $16 billion Walmart exit in 2018 rather than funding a Southeast Asia push. Paytm, a fintech trailblazer, eyed early profitability over global reach, only to see its 2021 IPO flop, losing 60% of its value. Zomato once operated in 24 countries but retreated to India, while Swiggy chose local dominance over battling DoorDash abroad.
Why the pullback? Indian venture capital favors quick exits—IPOs or acquisitions—over the patient, high-risk bets that built Amazon (unprofitable for a decade) or Stripe (still private, globally expanding). Cultural risk aversion and regulatory red tape don’t help. India’s compliance burdens—taxes, labor laws, data rules—bog down startups dreaming beyond borders. Yet, exceptions like Zoho and Freshworks, thriving globally in SaaS, prove it’s possible. The difference? Long-term vision and investor trust.
The Path Forward: Unleashing India’s Tech Potential
India has what the U.S. and China envy: a massive, diverse population generating multilingual data—rocket fuel for AI—and engineers at a fraction of Silicon Valley costs. Its mobile-first leap, exemplified by UPI’s cashless revolution, makes it a testing ground for next-gen innovation. Digital India policies, rising VC funding, and a new wave of profit-driven startups (Zerodha, Razorpay) signal change. Indian-origin leaders in global tech could even bridge networks to Western markets.
A shift is already underway, led by the country’s premier institutions and bold AI ventures. The Indian Institutes of Technology (IITs) are driving this charge—IIT Madras, for instance, collaborates with AI4Bharat on IndicVoices, a dataset of 7,348 hours of speech across 22 local languages, powering models like IndicASR. IIT Bombay partners with Samsung and AMD to advance AI and semiconductor research, while IIT Kanpur’s work with the National Health Authority leverages AI for healthcare under the Ayushman Bharat Digital Mission. These efforts mark a pivot from service-based IT to cutting-edge innovation.
Government-backed initiatives like AI Kosha, launched in March 2025 under the IndiaAI Mission, amplify this momentum. With 316 datasets at launch—focused on language translation and sourced from public domains like Telangana’s health records and census data—AI Kosha equips startups and researchers with local, high-quality data to build India-centric AI models. Meanwhile, Krutrim, the country’s first full-stack AI model from Ola’s Bhavish Aggarwal, trained on 2 trillion tokens with heavy Indic language representation, challenges global giants like ChatGPT. Its open-source approach and upcoming Krutrim Pro promise to democratize AI innovation, tailoring solutions to the country’s cultural and linguistic diversity.
It’s Time for a Breakthrough!
But potential isn’t enough. The country needs a breakthrough, a homegrown AI platform trained on 1.4 billion voices outpacing ChatGPT, or a mobile-first giant rivaling ByteDance. That demands a shift: government doubling R&D spending (from 0.7% to match China’s 2.4%), streamlining regulations, and incentivizing product innovation over services. It means investors betting on decade-long visions, not two-year exits. Imagine a local startup scaling from Mumbai to Munich, backed by deep pockets, bold policy, and IIT-led breakthroughs. The talent’s there. The market’s there. All that’s missing is the will to risk it all — like Aryabhata did gazing at the stars.
