Written by Srinath Sridharan and Shailesh Haribhakti
The first chapter of India’s global rise during the liberalisation era began with IT-enabled services and business process outsourcing. It matured into knowledge process outsourcing, and today, into Global Capability Centres. Yet, beneath this perceived success lies an uncomfortable truth: Their economic value is derived more from labour cost and currency arbitrage than from intellectual property control.
Meanwhile, the world has moved beyond digitisation to augmented intelligence. The architecture of global production is being rewired by AI, automation, and agentic workflows. Human-led services are rapidly being replaced by human–AI co-creation, soon to be followed by AI-first delivery models. If we cannot own what the world wants — and will soon be hooked to — we cannot claim supremacy, as the Western tech giants have shown.
But time is not on our side. The world’s major powers are racing ahead to dominate the new industrial order.
The United States is building an industrial AI backbone at a pace unseen since the Cold War. From hyperscale data centres to onshore chip fabrication, from embodied robotics to algorithmic reasoning, it is reconstructing the hardware and software of modern industry. Its AI race is about context, cognition, and control.
China, in contrast, has married power with production. It has built terawatt-scale energy capacity, fused robotics into its manufacturing lines, and created a design-to-scale pipeline unmatched anywhere. Its goal is not cost arbitrage but full-stack sovereignty — from silicon to supply chains. Europe, caught in its regulatory overhang, and Japan, tentatively reawakening through smart production, are also repositioning.
If the last century was defined by physical wars and the fever of globalisation, this one will be marked by digital wars, algorithmic power, and the contest for AI supremacy. The theatres of conflict are shifting from borders to bandwidths, from territory to technology.
The future of jobs — and the jobs of the future — looks bleaker by the day. The very nature of what constitutes “human work” is already changing, and drastically. Nations will compete for control over data, design, and decision-making intelligence. Multilateral institutions, already eroded in moral and structural authority, risk fading further into irrelevance. Their paralysis already exposes a future where sanctions and coercive regimes — economic, political, or technological — may become the new instruments of global (dis)order.
Here lies India’s last chance — with one foot in the old economy of process and the other in the emerging economy of intelligence. We are the world’s third-largest economy by purchasing power. Yet these mean little if material progress does not translate into lived daily realities for all our people. We have a strong domestic market, a robust digital public infrastructure, and a demographic window that is still open — barely.
Yet the structure of our growth is dangerously shallow. Private-sector-led capital expenditure is narrow, and R&D investment remains abysmally low. We risk remaining the world’s dependable support function — efficient, reliable, replaceable — rather than its indispensable leader.
Two-thirds of our population is under 35 years. That is both our promise and our pressure. To them, we owe not just jobs but dignity, purpose, and the opportunity to build a better India than the one they will inherit. Our major cities — the engines of our GDP — are unlivable for many, and yet, politically, we remain in denial.
Our approach to emerging technologies reveals a worrying pattern. Announcements around AI, quantum computing, or frontier technologies are frequent, but too often half-designed. They address fragments of the challenge — a funding window here, a grant there, a task force somewhere — without a national vision that binds industry, academia, and state capacity into one coherent push. The sensationalist narrative in some quarters that the global AI party is over — gleefully shared through memes and potshots — is unbecoming of the Viksit Bharat journey.
Indian industry, too, must recognise that the age of jugaad has ended. We cannot improvise our way to the frontlines of the Fourth Industrial Revolution. This reset must begin early, from how our schools teach curiosity to how our universities cultivate experimentation. It demands nothing less than a national reimagining — an industrial and AI strategy for the next two decades. Alongside larger sovereign capital, long-term domestic savings, incentivised domestic pools of capital, sovereign participation, and pension-led innovation funds can fuel India’s next growth engine.
Manufacturing must scale in depth, not just breadth. We need China’s scale, Germany’s precision, and America’s automation. Power must be affordable, logistics frictionless, and industrial corridors truly business-ready. For small and medium enterprises, regulation must become an enabler. Unless Indian states align their vision with the national focus, these aspirations will remain rhetorical.
The world we are entering is not one of scarcity but of regenerative abundance, where sustainability and artificial intelligence no longer stand apart but converge. Productivity will no longer be measured merely by speed or scale but by the quality of impact — on people, on the planet, and on the purpose that drives progress.
If India is to lead this transition, it must embrace what we call the SAGE mindset — one that treats sustainability as strategy, not compliance; makes AI-led productivity intrinsic to every workflow; enforces governance that values transparency and speed; and places empathy at the very heart of growth.
But before all this, we must confront what has not worked. Our industrial policy remains a patchwork of incentives, not a national design for the future. Toward Viksit Bharat, we need a fix-it.
Sridharan is a corporate advisor and author of Family and Dhanda. Haribhakti is an independent director on corporate boards
