Review the final output India is poised to excel not in chip manufacturing, but as the global leader in deploying artificial intelligence across its vast population, according to Infosys co-founder Nandan Nilekani. Addressing the NCAER India Policy Forum 2026 on August 6, he asserted that India’s greatest opportunity lies in real-world AI applications—such as agriculture, healthcare, and education—not in the infrastructure-heavy race for chips and expansive language models.
## AI Use Cases Over Infrastructure
Nilekani pointed out that while Western nations concentrate on developing large language models, building data centers and securing cutting-edge hardware, these layers will, over time, become commoditized. He emphasized that the real value will shift toward the “application layer,” where India can lead. Leveraging the country’s experience with digital public infrastructure (DPI), which serves well over a billion users, provides a model for broad AI adoption.
One of the key pillars of making AI accessible to the population is addressing India’s linguistic diversity. Nilekani argued that systems need to operate in local Indian languages, understand voice inputs, and recognize the way Indians mix languages in everyday speech—not just rely on English. He linked this to sectors where AI can touch lives most directly: improving farm yields, delivering healthcare, and boosting educational outcomes. Tools that speak local tongues and work orally may help bridge digital divides and accelerate adoption.
## Entrepreneurship as a Job Engine
Shifting focus from infrastructure to innovation, Nilekani highlighted that employment growth in India over the next decade is likely to stem from entrepreneurship rather than large corporations. He noted the startup ecosystem has ballooned from under 10,000 companies ten years ago to about 150,000 today. At an estimated growth rate of roughly 20% annually, India could see over one million startups by 2035.
These new enterprises will generate jobs—not just for founders but for a broad workforce. For Nilekani, small firms where people wear many hats will be less threatened by automation than rigid, process-bound large firms. He cautioned that automating tasks in structured corporate settings could wind up displacing many. Conversely, jobs in small businesses are harder to automate and better suited to employ more people.
To support this startup-driven employment era, Nilekani urged policymakers to ease regulatory compliance burdens. He also suggested enhancing access to credit for micro and small enterprises through DPI systems like the Account Aggregator framework and expanding platforms such as ONDC for marketplace reach.
## Adapting to a Changing Workforce
With the rise of gig work, freelancing, and multiple employers, India’s labor institutions must evolve, Nilekani said. He proposed portable social security benefits—such as health insurance, pensions, and healthcare—that remain with the worker rather than the employer. Also, digital credentials should travel with workers so their skills and experience follow them across jobs.
## Sustaining Growth, Addressing Challenges
Nilekani emphasized that to leverage India’s demographic dividend—boosted by a young population—continued economic expansion is essential. However, growth must go hand in hand with tackling major challenges: rapid urbanization, climate risks like floods and heat waves, and improving healthcare, education, and productivity. He warned that unless climate-related threats are addressed, India could become “ground zero” for environmental emergencies.
## Key Takeaways
– India stands to build leadership in AI through usage—deploying practical applications rather than competing on chip innovation.
– Real-world AI must support Indian languages, voices, and mixed-lingual speech for mass inclusion.
– Entrepreneurship and small businesses will be crucial in driving employment and resisting automation.
– Labour policies should adapt with portable benefits and credentials suitable for a diversified, shifting workforce.
– While AI presents big opportunities, India must also navigate urbanisation, climate challenges, and improving human development outcomes.
This thought leadership from Nandan Nilekani underlines how India’s path to becoming a major AI power lies not in competing for chip supremacy, but in embracing its social, linguistic, and entrepreneurial strengths—and using those to build inclusive AI that reaches all corners of society.
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