The India Advantage: Ethical AI and inclusive innovation

India’s emerging AI leadership comes from a radically different playbook.

By Vidisha Suman and Manish Bindal  

The global AI race is usually framed as a contest between America’s innovation speed and China’s state-backed scale. Yet this binary misses the quiet rise of a third force: India, constructing the world’s first AI foundation built for a billion diverse users. Rather than chasing raw computational supremacy, India is laying the groundwork for a radically different form of leadership, one rooted in a principle the rest of the world has yet to master.

An Incomplete Narrative

For decades, three levers have defined AI competitiveness: compute, data, and algorithms. The USA leads through market-driven innovation, while China excels at state-coordinated deployment—each delivering remarkable advances. But this framework leaves out a critical dimension: equitability—the ability to distribute AI’s benefits at massive scale, across deeply diverse populations.

India’s emerging AI leadership comes from a radically different playbook: instead of competing solely on the traditional three levers, it is pioneering a fourth. India has built what can be called the Digital Sovereignty Stack: open, population-scale ecosystems like UPI, Aadhaar, and ONDC that make inclusion the default, not the afterthought. By aligning corporate strategy with these national assets, Indian companies can export the blueprint for inclusive innovation—transforming the IndiaAI mission from policy aspiration into market reality.

Activating 4th Lever of India’s Digital Sovereignty Stack

Equitability in India’s AI journey is not accidental—it’s the result of a decade of deliberate design choices. The Digital Sovereignty Stack embeds four core principles—universal access, inclusive design, fair competition, and exportable solutions—turning population-scale infrastructure into an engine for equitable AI.

1) Scale for All: Aadhaar and UPI form a low-cost, open highway for identity and payments. As of mid-2025, UPI processes over 18 billion transactions monthly, with an annualized value nearing $3 trillion and ~20% year-on-year growth. Even street vendors receive nearly half their payments digitally, creating public rails where AI inherits inclusive DNA from day one.

2) AI for Billions Mindset: India’s diversity creates a complexity advantage: models that work across 22 official languages and hundreds of dialects are more robust and less biased. Initiatives like Project Jugalbandi close last-mile information gaps, shifting the focus from “AI for the few who can afford it” to “AI that works for billions because it must

3) Social Inclusion by Design: Rather than regulating monopolies after they form, India architects open networks that prevent exclusion from the outset. ONDC—a protocol, not a platform—unbundles the e-commerce value chain. By Q1 2025, it had ~760,000 sellers and ~200 million transactions, structurally enabling a level playing field that accelerates SME participation. Companies such as Plotch.ai exemplify this model: instead of transacting, they enable others to integrate and scale on the network.

4) Global South Blueprint: By solving for scale and diversity under constraints, India produces replicable solutions for emerging markets often overlooked by expensive AI systems. The IndiaAI mission’s “Make AI in India and Make AI for India” becomes a template for ethical deployment that other nations can adapt.

Strategic imperatives for CXOs

India’s Digital Sovereignty Stack is more than infrastructure—it’s a competitive advantage. These four pillars unlock three revenue strategies that work in India’s vast domestic market and can be exported globally. Corporate leaders should focus on:

1. Design DPI-Native Revenue Models: Build products and services around DPI’s reach and cost advantages. Aadhaar enables instant KYC; UPI makes payments frictionless—slashing acquisition costs and opening new customer segments beyond premium urban markets. Manufacturers can instantly authenticate suppliers; mobility players can onboard drivers in hours, not weeks.

2. Build Vernacular-First, Edge-Deployed AI: Prioritise local languages and offline-capable AI from day one. Deploy lightweight models at the edge—health consult bots, agri-advice tools, vehicle diagnostics that work with intermittent connectivity. This offline-first approach unlocks adoption in Tier-2/3/4 cities where cloud-dependent solutions fail, creating durable moats in the vast Bharat market.

3. Monetize Open Network Orchestration: In open networks like ONDC, the real value is in enabling others. Become the infrastructure provider, data orchestrator, or AI-powered matchmaker. Companies like Plotch.ai exemplify this—supplying the tech stack that lets others transact and scale, rather than competing as a single platform.

From National Asset to Global Leadership

By embedding equitability into its digital foundations, India has created an AI model that serves billions—scalable, ethical, and exportable. The Digital Sovereignty Stack and IndiaAI mission give leaders a rare opening: align strategy with national assets to build inclusive innovations that compete globally. Acting now means tapping a domestic growth engine and positioning India as the Global South’s AI architect for the next decade.

(Vidisha Suman, Partner and Manish Bindal, Principal, Kearney.)

Views are personal and do not represent the stand of this publication.