India faces significant challenges in developing large-scale artificial intelligence (AI) models and remains heavily dependent on foreign technology, according to a report by Motilal Oswal. The report highlighted key hurdles such as a shortage of high-end AI hardware, limited access to advanced GPUs and cloud computing, and insufficient funding for research and development. These factors hinder India's ability to create cutting-edge AI systems that can compete globally.

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It said "India faces challenges such as a lack of homegrown large-scale AI models, dependence on foreign technology, and limited AI hardware infrastructure". One of the major barriers to AI development in India is the high cost associated with building large-scale models. The report pointed out that India has a low risk appetite when it comes to AI research and innovation. Limited financial support and infrastructure gaps further slowdown progress in the sector.

However, the emergence of DeepSeek offers a potential solution for India. DeepSeek has shown that high-quality AI models can be developed at a fraction of the cost, making it a viable model for India.

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Its open-source nature allows developers and researchers to freely inspect, modify, and use the technology, reducing financial barriers and encouraging community-driven development.

Additionally, DeepSeek focuses on efficiency and algorithmic optimization, meaning it does not require the most advanced and expensive hardware to deliver strong performance. This could be particularly beneficial for India, where access to high-end computing resources remains limited.

Moreover, the ability to customize AI models based on country's diverse linguistic and cultural landscape makes this approach even more relevant. Recognizing these challenges, the government has announced budgetary initiatives to strengthen the country's AI ecosystem. Under the IndiaAI Mission, an allocation of Rs 2,000 crore has been made to develop India's foundational AI models, establish data centers, and improve AI infrastructure.

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Additionally, Rs 500 crore has been set aside for setting up Centers of Excellence (CoE) in AI for education. This will also expand existing AI centers in agriculture, healthcare, and urban planning.

The report highlights that while India is making efforts to boost AI development through budgetary support, a stronger focus on research, innovation, and infrastructure is necessary.

By leveraging cost-effective and efficient AI models like DeepSeek, India has an opportunity to reduce dependency on foreign technology and drive self-reliance in AI advancements.

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