Rahul Matthan: Apply the IT playbook to help AI businesses rise

Copyright © HT Digital Streams Limit all rights reserved. India should be able to re-create the positive energy that the IT boom around AI has made possible. Summary India must seize this moment to provide AI developers with everything they need to jump ahead in this important space. Think of everything that has been done to help generate an IT services boom. The same approach can work for artificial intelligence. When I first heard about Deepseek, my immediate response was disappointment. Everyone else was working on the capabilities of the model and the threads with which it was trained, but I couldn’t get past the fact that China the ‘jugaad’ I expected to show India. Deepseek proves that it is possible that the latest AI even occurs under restrictions, thanks to solutions. For India, it should be just as much a warning as an inspiration. I am somewhat surprised to find ourselves in this position. After all, we have a reputation that we are an IT power station. In 1992, the export of India’s software was just £ 17 crore. By 2022, the figure exploded to £ 8.48 Lakh Crores-an increase of 16,000 times. Those of us who were part of this journey know that none of this was pure chance. India’s rise as a global IT power station is just as much the result of deliberate policy choices. Below was the software technology parks of India (STPI) scheme, a program that offers IT businesses a series of incentives. STPI units are eligible for ten consecutive years for a complete release of income tax and have been able to import hardware and software in the country completely conscientiously. At a time when foreign ownership was severely limited, 100% direct foreign investment in these businesses was allowed by the automatic route. Most states have set up one window clearance facilities that radically simplify the process of utilizing these benefits. Partly as a result of these measures, the IT industry’s share of total Indian exports grew from less than 4% in 1997-98 to about 25% in just 15 years. It cemented India’s position as the world’s IT service capital, so much that, when Covid forced global lockouts, it would not have been for the robust IT end that the local outsourcing operations were offered, most of the world’s critical IT infrastructure would come to a standstill. All of this must have translated to a significant benefit when digital technology made the next orbit shift. Unfortunately, success in one era is no guarantee of leadership in the next. Unlike China, India could not make a significant contribution to the AI ​​ecosystem, whether with benchmark AI models or border solutions, despite the best efforts by the Indiai mission to acquire GPUs, finance the development of indigenous major language models (LLMS) and set up a platform for data sets and models. We will do good to learn from the lessons in our past. The Indian IT revolution did not occur because the government obtained the hardware that IT enterprises needed, or made other resources available to them. All it did was create appropriate market conditions that encouraged entrepreneurship, so businesses had the confidence to make the long -term investment needed to develop a successful technology industry. This is exactly what we need to do to promote AI. Rather than acquiring GPUs, the government should create incentives for private investment in the AI ​​space. It can take the form of long-term tax holidays that will provide direct benefits for those investing in AI, as well as tax cuts for obtaining everything it takes to build a successful AI business. Reliable power and tire width of high quality must be made available on scale, through dedicated AI parks strategically located near Kabellandstations and next to reliable power facilities. But above all, the government must send a clear signal that it is ready and willing to take extraordinary measures to encourage AI innovation in India. One way it could do would be to put in place a liability regime designed specifically for AI. With the recognition of the probable and non-determinist nature of AI, the government must announce that it will be corrected above punishment. If you acknowledge that AI models are prone to errors, it should reassure AI companies that they will not be punished as long as they take steps to quickly determine what went wrong. Equally important is the need to put in place an AI-friendly intellectual property and data protection regime that gives entrepreneurs the confidence to train models in India using Indian data sets without the fear of being sued for copyright infringement or data violation. It should be possible to design appropriate frameworks that can protect the interests of creators and data trips that can at the same time provide AI businesses. Once the center implements these important strategic incentives, state governments will compete among themselves to attract investments. During the Nineties IT boom, states such as Karnataka and Telangana competed with each other to offer investments through subsidized land, power guarantees and data center facilities, while offering single wind power regimes run by dedicated commissioners. We need to be able to create the kind of positive energy around AI again. The IT boom of the 1990s did not arise because the government ended up in the business of IT services, but because it had the courage to carve out a favorable regulatory environment -one that assured entrepreneurs that their investments would be protected and treated as partners in national development. We have to do the same for Ai and do it soon. If India does not seize this moment, we are at risk of being users forever, not builders. We already have the playbook. All we have to do is apply it. The author is a partner at Trilegal and the author of ‘The Third Way: India’s Revolutionary Approach to Data Governance’. Its X handle is @mathan. Catch all the business news, market news, news reports and latest news updates on Live Mint. Download the Mint News app to get daily market updates. More Topics #AI #China #it Sector Read Next Story