In multiple bustling cities in India, teams of young techies are crafting algorithms that power rural diagnostics. Meanwhile, India’s voice echoes in global forums as it negotiates the rules of AI ethics.
Welcome to the India of 2025, leading innovation and diplomacy in technology.
From being the world’s third-largest startup ecosystem to housing approximately 118 unicorns valued at ₹29.91 lakh crores (December 2024), India’s remarkable rise places it at the crossroads of technological development and governance on a global scale.
But how did this growth happen? India’s ascent in the tech world is no accident. Initiatives like Aadhaar—the world’s most extensive biometric ID system—and UPI, processing over 15,547 crore transactions (amounting to ₹223 lakh crores from January to November 2024), have crafted a robust digital infrastructure. The ‘Make in India’ and ‘Startup India’ campaigns have encouraged entrepreneurship, while prestigious institutions like the IIMs, IITs, and IIITs cultivated a skilled workforce. Global partnerships have facilitated knowledge exchange, solidifying India’s reputation as a tech centre. In 2023, RBI stated that India’s exports of software services (excluding their sales through overseas commercial presence) increased by 2.8 percent during 2023-24 to ₹15.92 lakh crores. This digital ecosystem doesn’t just power revolution; it democratizes access to technology.
India has emerged as a global technology powerhouse, riding on decades of strategic investment, policy reforms, and an ever-growing pool of skilled talent. Policy reforms such as the National Digital Communications Policy (NDCP) 2018, the Digital India initiative, and the Information Technology (Reasonable Security Practices and Procedures and Sensitive Personal Data or Information) Rules, 2011 have been pivotal in enhancing infrastructure. As technology becomes a tool for geopolitical influence, nations recognize the importance of tech diplomacy. For India, this involves balancing domestic growth with international responsibilities, ensuring equitable access to technology, and addressing ethical concerns surrounding AI and data governance. In 2025, India aims to continue its rise as a leader in technology while ensuring a sustainable and inclusive global digital future.
India’s tech diplomacy efforts have significant global and domestic implications. On the global stage, India plays a critical role in setting standards for AI and data governance through active participation in multilateral organizations like the G20 and BRICS. In 2024, during its presidency, India emphasized the need for fair and equitable principles for data governance to address data protection and management, ensuring that the needs of developing countries are considered when discussing cross-border data flow. Domestically, its commitment to digital sovereignty ensures the rights of individuals and nations to control their digital assets. India’s digital sovereignty vision works to harness data for economic growth and development through regulatory oversight and develop a national defence against geopolitical security challenges. These efforts not only enhance India’s image as a thought leader but also bridge the gap between advanced economies and the global south.
India’s adoption of artificial intelligence (AI) has been transformative, revolutionizing sectors from healthcare diagnostics to predictive policing. The National AI Strategy, developed by NITI Aayog, provides a roadmap for leveraging AI in areas such as healthcare, agriculture, education, and urban mobility. The country is home to over 100 generative AI startups, innovating in fields like natural language processing for Indic languages and machine learning tailored to Indian contexts. In 2024, the country has significantly advanced its AI capabilities through initiatives like the IndiaAI Mission, which aims to make India a global AI leader, and the launch of the Global IndiaAI Summit to bolster AI innovation across sectors. Various states, including Gujarat and Tamil Nadu, have embraced AI to drive economic growth and tackle social challenges. Cities like Bengaluru and Hyderabad are emerging as key AI hubs, with Bengaluru accounting for over 38% of India’s AI startup funding. AI is also making strides in education, healthcare, and agriculture, with AI-driven diagnostic tools improving learning, patient care, and precision farming, boosting agricultural productivity. These initiatives not only improve governance and public services but also set the stage for future innovations.
Over 65% of Indian companies have adopted AI in some form, a figure projected to increase to 80% by 2025 (NASSCOM). Innovations like Bharat GPT or Microsoft’s Project Bhasha break language barriers and promote digital inclusivity. Through initiatives like “Digital Dosti,” India offers digital solutions as diplomatic gifts, strengthening ties with allied nations. Startups and SMEs stand to gain significantly from clear data governance policies and increased AI adoption, enabling them to scale efficiently. Citizens benefit from improved data privacy and AI-driven services that enhance their quality of life. Policymakers face the critical task of balancing innovation with regulation, ensuring a stable yet dynamic ecosystem.
Further, with the proliferation of digital platforms, data has become the ‘new oil.’ Recognizing its strategic value, India has prioritized data governance to ensure privacy, security, and equitable access. The Personal Data Protection Bill (2023) establishes frameworks for data collection, storage, and processing. The Data Empowerment and Protection Architecture (DEPA) facilitates secure data sharing while giving users control over their data. Cybersecurity initiatives focus on safeguarding critical digital infrastructure from threats, further reinforcing India’s robust data governance framework.
AI systems thrive on data, making robust governance essential. Poor data regulation can lead to biases, breaches, and misuse, undermining AI’s potential. By integrating ethical principles into both AI development and data governance, India ensures responsible innovation. Efforts include regulating algorithms to ensure transparency, fairness, and inclusivity, as well as mandating data localization to protect sovereignty. Collaborative frameworks engage stakeholders—governments, tech companies, and civil society—to co-create global standards.
India’s tech diplomacy extends its impact beyond its borders. Regional partnerships encourage collaboration on digital public infrastructure, benefiting countries like Nepal, Sri Lanka, and Bangladesh. Domestically, enhanced AI and data governance drive economic growth, attract foreign investments, and promote social inclusion by improving access to healthcare, education, and public services. These efforts bolster India’s geopolitical clout and soft power.
In 2025, India’s role in tech diplomacy will redefine global norms for AI and data governance. This balanced approach, combining innovation with inclusivity, positions India as a leader in shaping a tech-driven world.
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