New Delhi: Here’s another thing India can add to its laundry list of sectors, in which it is emerging as a leader — Artificial Intelligence.
The Economist claims India has a “unique opportunity to lead in AI”, despite having not yet produced any “noteworthy innovations” in the quickly expanding field. Behind the scenes, the piece says, India’s government, non-profit outfits, startups, and tech giants are all working to adapt AI to suit India’s specific needs.
There are two main reasons why India must focus on developing its technologies. “First, as a rising power, it is wary of depending on foreign technology. Second, it could be transformative for development,” The Economist writes.
Language, for India, is an obstacle to developing AI models. Hindi is the most spoken language in the world, after English and Mandarin, but less than half the country speaks Hindi — a barrier to a nationwide AI model. Over 60 other Indian languages have at least 100,000 speakers, but there is no data for several of them, making the AI revolution harder to achieve.
It’s partly why so many services in India are audiovisual and Indian AI products will likely be voice-first or voice-based.
“Take form-filling, which can seem like India’s national pastime,” The Economist says, speaking straight to those who have to stare at never-ending Indian red tape. “Allowing citizens to verbally answer questions in their own language, which a machine inputs into forms, would widen access and remove middlemen. Automating checklists for compendious compliance rules or bots that assist in interpreting requirements could make the process less soul-crushing.”
Education and healthcare in India could also benefit from AI. “India’s advantage will come not from pushing at the boundaries of AI, but from solving chronic, basic problems of the sort rich countries no longer think about,” The Economist shares, adding that such AI initiatives can only add to the success of India’s existing digital public infrastructure.
The success of AI, however, is “by no means guaranteed”. India doesn’t have the best track record in seamless rollouts of research and development resources. “And even if India lines up the ingredients, recipes and power it needs, it still faces a severe shortfall of chefs”, the piece concludes.
This concern over Indian indiscipline carries over into the economy. In the Breakingviews column in Reuters on how mistakes are being revealed in the emerging markets of India and China, Edward Chancellor writes that India’s capital discipline is “beginning to break down”, quoting an emerging markets specialist.
By comparing recent trends in Indian and Chinese markets, the piece, essentially, argues that the approach to emerging markets — assuming GDP growth correlates with a growing economy and stock market returns but also that high stock market valuations are “a reliable predictor of returns” — is wrong.
Various sectors — steel, cement, and power generation — are all building capacities in India, and the investment share of GDP is expected to rise from 28.5 per cent to 33 per cent over the next three years. Private investment has nearly doubled since 2022, and a flood of IPOs has followed high stock market valuations. But investors have pushed the valuation of Indian stocks far too much, with “no discernible improvement in growth rates or underlying profitability”.
“While India’s stock market is showing signs of a speculative blow-off, China’s capital cycle may be approaching a trough,” the column wraps up. “Chinese investment may have declined as a share of GDP but is still a heady 42%. Chinese stocks may still appear cheap on every valuation measure. However, until there is clear evidence of retrenchment on the supply side, emerging market investors should remain wary.”
The Financial Times reports the rise and sudden fall of another misguided investment — Byju’s. In a detailed profile of the company’s fall from financial grace, FT describes Byju’s legal battles — from Delaware to Bengaluru.
“Byju’s has been unable to access its bank accounts and pay salaries as a result of the Indian legal proceedings,” Byju Raveendran said in a company-wide email in August — shared with the Financial Times.
“I have felt like a man screaming into a hurricane of hurdles,” Raveendran said. “When we regain control, your salaries will be paid promptly, even if that means raising more personal debt.”
Byju’s creditors are now in US courts, while the company is fighting insolvency proceedings in India over delayed cricket sponsorship dues. US creditors have alleged that Byju’s used their money to pay the BCCI. The Qatar Investment Authority is also involved after Byju’s sponsored the Fifa World Cup.
“The lenders know that time is not on their side. Earlier this year, they said the cost of recovering the funds could make “finding the money nothing more than a Pyrrhic victory”, FT reports.
It quotes founder Byju Raveendran as saying he will pay back the lenders and asking them to return to Byju’s if they have the patience. “We will make a comeback,” he promises FT.
The Economist also has a piece about the other astronomical Indian startup — Swiggy. “The convenience of a doorstep service is not limited to the many Indians living in tiny homes, where rapid deliveries save devoting space to storage. Rather than reaching into a cupboard, people can now swipe on an app,” The Economist writes. “Restaurants would rather skip Swiggy’s cut of up to 18% of the value of meals.”
The numbers on Swiggy are couched in a larger look at the delivery economy in India — including other market players such as Zomato, Zepto, and Flipkart. And “competition is not Swiggy’s only concern”, the piece claims. It’s also facing several legal battles over business licences, non-payment of GST, and issues over hygiene and quality of goods.
“But such obstacles in India are as common as the potholes Swiggy’s riders have to skirt, and none seems to worry investors,” the piece says, dismissively. “More important is that Indians evidently, and increasingly, prefer a trip to the front door over a trip to the shops.”
(Edited by Madhurita Goswami)
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