AI Markets and Competition in India

Payal Malik (pmalik@icrier.res.in), Nikita Jain (njain@icrier.res.in), Shiva Kanwar (skanwar@icrier.res.in), Bhargavee Das (bdas@icrier.res.in) and Saloni Dhadwal (sdhadwal@icrier.res.in)
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Payal Malik: Indian Council for Research on International Economic Relations (ICRIER)

Indian Council for Research on International Economic Relations (ICRIER) Report from Indian Council for Research on International Economic Relations (ICRIER), New Delhi, India

Abstract: Artificial Intelligence (AI) technologies are becoming integral to businesses and public markets alike, enabling innovation and efficiency and creating avenues for economic growth. The emphasis in public discourse has been on the technological advances enabled by AI and the risks and benefits associated with them. It is equally important that discussions on market implications of firm behavior active in AI are also understood. This report explores the evolving market dynamics in India and the critical challenges faced by policymakers and regulators in creating a competitive and innovative AI ecosystem. The report also examines the AI technology stack, highlighting its distinct layers and their implications for industrial organization and market competition. Key themes include the role of major cloud providers in shaping the AI ecosystem, the complexities of open-source models, the expanding network of partnerships between global technology companies, AI startups, and domestic IT incumbents, and the creation of new dependencies. Drawing on global best practices, the report emphasizes the need for a nuanced mix of competition and industrial policies, including a Digital Public Infrastructure paradigm, to foster a competitive, inclusive, and innovative AI ecosystem in India. It also highlights India's push for technological sovereignty through initiatives like the IndiaAI Mission and investments in indigenous AI models and supercomputing capabilities. The recommendations proposed in the report include promoting interoperability, enhancing access to computing resources, strengthening data-governance frameworks while facilitating access to high-quality open datasets, and leveraging public-private partnerships to support emerging AI startups.

Keywords: Artificial Intelligence; Competition Policy; Generative AI; Digital Public Infrastructure; Data Governance; AI Regulation; Prosus; icrier (search for similar items in EconPapers)
Pages: 77 page
Date: 2025-01
New Economics Papers: this item is included in nep-ain, nep-com, nep-cse, nep-ict, nep-ino and nep-sbm
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