India in the coming days plans to take up with the Trump administration the regulations, put in place by outgoing President Joe Biden, that further restrict US exports of artificial intelligence (AI) chips and technology.
Despite the worries over curbs including those on graphics processing units (GPUs), top officials said India’s ambitious plan to expand its AI programmes through 2027 will remain unaffected in the short term.
“To begin with, we don’t expect an immediate problem. The limits they have prescribed should allow us to manage for a year or two. However, it will be crucial to assess the situation when the Trump administration takes over, and we’ll need to address this with the new administration,” a senior government official told Moneycontrol on the eve of Donald Trump taking oath as the 47 US president. The official spoke on condition of anonymity.
The remarks, made on January 19, indicate cautious optimism that the restrictions will not hinder India’s immediate AI goals even as they acknowledge the need to engage with the Trump administration to mitigate the potential long-term impacts of the controls.
The government has separately started consulting with the industry to develop a GPU and has discussed this with C-DAC (Center of Development of Advanced Computing). “...we have to build our own GPUs. It is an idea but we will have to adapt and develop. We are discussing with industry and C-DAC,” the official added.
Friends, foes and the in-betweens
The US AI Diffusion Policy and Export Controls divide the world into three groups for reasons of exports.
The first, comprising 20 countries such as Australia, the UK, France, Germany, Sweden, and Switzerland, will have unrestricted access to AI chips. In contrast, 20 countries, including China, Russia, North Korea, and Iran, will have no access.
For the remaining 140 nations, including US allies such as India, Saudi Arabia, and the UAE, there will be a country-specific cap on computing power equivalent to 50,000 advanced GPUs (worth about $1 billion).
The rule, which lays out a framework to govern the export of AI technologies, from chips to artificial intelligence models, says that the cap could be doubled if these countries sign a pact with the US to uphold strict security standards.
Industry experts and stakeholders have flagged concerns about potential adverse effects starting in 2027 when India plans to scale up its AI capabilities. Restricted access to advanced AI chips could slow innovation, raise costs due to licensing requirements, and introduce operational delays.
The government is sourcing nearly 10,000 GPUs under the ambitious Rs 10,738-crore India AI Mission. The number may go up in the future.
Long-term worries
Ashok Chandak, president of the India Electronics and Semiconductors Association (IESA), stated that while the immediate impact may be limited, restricted access to GPUs could hinder India’s AI ambitions beyond 2027 as the country ramps up its AI initiatives. Additionally, uncertainties surrounding licensing and trade negotiations could pose significant challenges to India’s plans for large-scale AI hardware deployment.
Chandak also highlighted that large-scale AI data centres, which require hundreds of thousands of GPUs, may experience delays or be downsized, potentially putting global companies at a competitive advantage over Indian firms.
Industry experts said India’s strong bilateral ties with the US in critical and emerging technologies could help negotiate the curbs. They, however, warned that the Trump administration might use the regulation as leverage to secure tariff concessions or ease qualitative restrictions such as the PC import regime.
Counterpoint Research vice-president and co-founder Neil Shah said if the curbs remain, India would have to prove itself an ally to the US to ensure access to this critical technology.
"From the outset, the time it takes for a company to go to market would extend. For instance, data centres would be dependent on US-produced compute chips. However, things may look different with the Trump administration coming in post-(Jan) 20th. But, if it were to remain like this, India would have to prove herself an ally to the US to ensure access to this critical technology," Shah said.
Disclosure: Moneycontrol is a part of the Network18 group. Network18 is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.
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