India Prepares for an AI-Powered Future with Industry Mentorship and Hands-On Skill Development

• Chinmay
• March 11, 2025
• Artificial Intelligence, India, News
• AI innovation, AI investments, AI policy, data science, deep tech, India AI growth, public-private partnership, R&D tax credits, Union Budget 2025, workforce upskilling
• 0 Comments

As the Union Budget 2025 approaches, industry leaders are urging the government to prioritize Artificial Intelligence (AI) and Data Science to drive economic transformation. Pratap Daruka, CFO of Tredence, suggests that offering tax rebates to companies focusing on skill-based hiring, upskilling, or lateral skilling initiatives could foster a culture of continuous learning and adaptability.

Bridging the Investment Gap in R&D

Currently, India invests less than 1% of its GDP in R&D, significantly lower than the global average of 2.3% and leading nations like the United States (3%) and South Korea (4.5%). Industry experts suggest that increasing R&D investment to 1.5% of GDP by 2026 could enhance India’s global competitiveness in AI and quantum computing.

Tax incentives for R&D, particularly in emerging domains like AI and deep tech, could drive more innovation. Additionally, government-backed research partnerships with industry and academia could accelerate knowledge-sharing and skill development.

Public-Private Partnerships: The Key to AI Growth

To build a thriving AI ecosystem, India could adopt global models like the U.S. Defense Advanced Research Projects Agency (DARPA) and the European Union’s Horizon 2020 framework, both of which have fueled major AI advancements. Establishing an AI Innovation Fund, co-funded by the private sector, could boost investment in high-risk, high-reward innovations.

Moreover, allocating long-term grants for deep-tech companies would encourage private sector participation and reduce risks associated with early-stage AI projects.

Tackling the AI Talent Shortage

India needs an estimated 1 million additional AI professionals in the coming years to meet industry demand. To address this talent gap, the government should:

• Increase grants for STEM education
• Launch large-scale AI and data science upskilling programs
• Promote AI, robotics, and quantum computing certifications
• Strengthen industry-academia partnerships for tailored AI training

By equipping professionals with job-ready AI skills, India can establish a sustainable workforce capable of leading the next wave of AI innovation.

Tax Reforms to Encourage AI Innovation

Countries like the United Kingdom (R&D Tax Relief) and Canada (SR&ED program) have successfully leveraged tax incentives to accelerate AI growth. India could implement similar reforms, offering:

• Enhanced R&D tax credits for AI development
• Export-linked incentives for AI-based solutions
• Tax rebates for companies investing in workforce upskilling

Such measures would stimulate AI research, boost startup innovation, and attract global AI firms to India.

Making India a Global AI Leader

The government’s recent initiatives, including the Centers of Excellence for AI and the Data Governance Policy, highlight its commitment to AI-driven growth. However, further steps are needed:

• Setting up AI Centers of Excellence in Tier-2 and Tier-3 cities to democratize AI adoption
• Investing in digital infrastructure for equitable access to AI resources
• Establishing a dedicated AI task force with a structured execution roadmap

Additionally, India should foster international AI research collaborations similar to the OpenAI-Microsoft partnership. Strengthening AI knowledge exchange with leading global institutions would accelerate India’s AI capabilities and adoption.

Final Thoughts

With the Union Budget 2025 on the horizon, India has an unparalleled opportunity to amplify R&D investments, enhance public-private collaborations, introduce AI-focused tax reforms, and implement large-scale skill development initiatives. These measures will accelerate India’s AI journey, generate millions of jobs, and solidify India’s position as a global leader in AI and data science.

By fostering a robust innovation ecosystem, India can shape a future defined by technological excellence, economic resilience, and AI-driven progress.