As Trump backs coal, New Delhi hosts a global AI summit to drive productivity and reform
It is quite ironic that even as coal miners hail US President Donald Trump as the “champion of coal” in Washington, India’s Prime Minister Narendra Modi is convening the fourth global summit on Artificial Intelligence since 2023 in New Delhi. Could this curious inversion of core business interests between these two friendly countries be the result of hubris afflicting the world’s premier power, whilst aspiration and hope drives developing minnows, like India, to face technology development issues up front. Even as America seeks comfort in turning the clock back to trade protectionism and revisits a colonial paradigm of natural resources being key to retain global power, India embraces the future, even though it comes with potential disruptions.
Some of this is because we, unlike America, do not have the economic margins to plough a risky and lonely furrow into the past. But it is equally about an alternative world view, focusing on India’s demographic potential to harness global opportunities for growth. Growth remains central to the India story and takes precedence over preserving the existing status quo, which is cozy for the “creamy layer” and their associates but grossly inequitable in not affording similar opportunities to the bottom half of the population.
It all began in 2023 at Bletchley Park in the UK, where the AI Summit focused on shared responsibility for safe development of frontier models. Seoul in 2024 moved from awareness to the nuts and bolts of global coordination and cooperation. Paris in 2025, co-chaired by India, was about risk awareness and policy action. The New Delhi summit is likely to focus on unpacking economic and business opportunities and managing the impact on legacy IT businesses, jobs and growth.
The perceived business opportunity in AI is its ability to improve work efficiency by a possible factor of 10X to an ambitious 30X, within a short period of five to ten years.
Aspirational economies, like India, are betting that the benefits of anticipated productivity gains in business and government, leading to higher GDP growth, can outpace the scale and the cost of job disruptions and improve the quality of social services provided to the bottom half of the population.
A 10 to 12 per cent increase in annual productivity in the IT sector translates into a one per cent increase in GDP per year, assuming the IT sector has a GDP share of eight per cent. Productivity increase in IT can also translate into higher levels of competitively priced export bridging some of the current account deficit. In the medium term, as AI is embedded into enterprise workflows more widely, it would make manufacturing and even agriculture more cost competitive because of direct productivity gains in these work areas, thereby enhancing their capacity to withstand imported competition in free trade regimes and to export.
A one per cent growth in GDP translates into enhanced revenue of Rs 3.9 trillion per year for the Union and state governments, at the prevailing tax to GDP ratio of 19 per cent. With this additional revenue inflow, the finance minister could reduce the revenue deficit by two-thirds (over 2026-27 levels) and reduce fiscal deficit by 23 per cent to well below the norm of four per cent of GDP, or choose instead to enhance capital spend by 23 per cent without adding any additional debt. Clearly, the additional leverage and resilience attained by any of these actions, or any combination thereof, is considerable.
Consider also that the application of AI can effectively democratise access to social services like education and health. AI technology can digitally fill the gaps in physical service provisioning, caused by fewer than needed teachers and doctors, thereby standardising the quality-of-service delivery between large cities and far-off villages.
Similarly, in productive sectors like agriculture, phone-in services and remote sensing can lower cost and risk by advising weather-dependent farmers on just-in-time sowing or cropping and online advice for timely and least cost pest management.
Tellingly, domestic application models which translate one Indian languages into another are already available to enable conversations across regions and cultures in real time. History buffs might remember that many of India’s states were demarcated based on language. India has tussled with a universally acceptable common language, though Bollywood has played a stellar role in popularising Hindi across the country and abroad. Sarvam AI, a public interest initiative out of Chennai, now supported by the Government of India, seeks to bridge the language divide digitally and eventually to bridge the cultural gaps across communities.
To be sure, new jobs will be created as AI becomes pervasive across enterprises and the government. AI applications need to be supervised, for now, and humans would continue to be in these roles whilst machines do most of the grunt work. In techie parlance, such collaboration between machines and humans is called “humans in the loop”. Those who are uninterested or incapable in reskilling themselves shall lose out. The extent of new jobs available will depend on the spread and the depth of implementation of AI within enterprises. But clearly, adaptation finance would be necessary as would guidance, particularly for smaller firms. This is where handholding by the government, industry associations and large corporates (of smaller ancillary suppliers) will be critical for assuring a smooth transition over a decade.
Sam Altman is being generous when he calls India a “full stack” player across all five layers of compute, data, Large Language Models, Applications and Governance.
Versus China, for instance, we are strongest in data, courtesy our digital public infrastructure (Aadhaar and UPI) and in governance arrangements, courtesy our democratic institutional arrangements, which ensure stability. Our compute capacity is emerging, as are LLMs with an emphasis initially on enterprise applications in the services sector, with manufacturing to follow. The India AI summit aligns well with the liberalised trade arrangements India is navigating, at a time when becoming globally competitive is the key to growth and survival. It is surely not a bad bargain to import coal and oil from America, as President Trump wants, and pay for it by exporting AI enterprise models embedding AI into American services and industry to replace or update the legacy software Indian engineers installed in the first place.
The writer is Distinguished Fellow, Chintan Research Foundation, and was earlier with the IAS and the World Bank
