India’s Role In The AI Arms Race
Around 10 years ago, in 2014, at the MIT’s AeroAstro Centennial Symposium, Tesla and Twitter boss Elon Musk said,
“I’m increasingly inclined to think that there should be some regulatory oversight, maybe at the national and international level, just to make sure that we don’t do something very foolish. I mean with artificial intelligence we’re summoning the demon.”
A decade after Musk said this, we are no closer to what AI really means to all of us, nations and individuals included. Yet, it is terribly important that we understand the implications of AI in strategic terms.
In his latest column for First Post, Takshashila’s Arindam Goswami tackles one such issue: the AI arms race, and India’s role in it.
A new battleground has emerged in the AI race, Arindam informs us, and it involves the all-important Graphics Processing Units (GPUs). The catalyst for this global GPU grab was the US government’s October 2023 export controls on advanced AI chips to China, which have now been tightened further in April 2024. These restrictions, aimed at curbing China’s AI capabilities, have had far-reaching consequences, sparking a worldwide rush to secure these critical components.
Arindam elaborates:
“Countries worldwide are now recognising GPUs as strategic assets crucial for technological and economic competitiveness. The European Union, through its European Chips Act, has pledged €43 billion to double its global semiconductor market share to 20 per cent by 2030. Japan has earmarked $6.8 billion for domestic semiconductor development, while South Korea plans to invest $450 billion in its chip industry over the next decade.
This GPU arms race is more than a tech industry trend; it’s a microcosm of the broader geopolitical struggles in the AI era. The concentration of AI compute power is stark: a recent study by Stanford University’s Human-Centred AI Institute found that just 15 companies control 95 per cent of the world’s AI compute resources. This imbalance has profound implications for global AI development and deployment.”
What exactly is India’s role in this fast-changing world?
“While India may not currently be at the forefront of hardware manufacturing, its strengths in software development and IT services present significant opportunities in the AI and GPU space.India’s software industry, valued at $227 billion in FY2022 and expected to reach $350 billion by 2026, forms the backbone of its technological capabilities. The country produces 1.5 million engineering graduates annually, creating a vast talent pool for AI and machine learning development. This human capital is India’s key advantage in the global AI race.”
You can read Arindam’s full piece here.
India to China Via Germany
Why is India’s EV push ironically encouraging China to increase its base in the subcontinent? In a piece for Outlook Business, Rakshith Shetty writes that India's ambitious push for electric vehicles (EVs) to combat pollution and reduce fossil fuel dependence may inadvertently lead to a large-scale entry of Chinese firms into the domestic market.
“A Global Trade Research Initiative (GTRI) report warns that China's automotive industry, buoyed by substantial state support, has rapidly advanced in EV technology, making it a leading exporter of EVs and related components. In 2022-23, India's auto component imports stood at $20.3 billion, with 30 per cent originating from China.”
No surprises, therefore, that India’s dependence on China may actually go up, given the latter’s dominance in the market, both in terms of critical components as well as finished goods. In fact, a Global Trade Research Initiative (GTRI) report says that, soon, one-third of all Indian EV sales could be from China.
Rakshith writes:
“While India has seen a surge in EV imports, mainly from Germany, a closer look reveals a concerning trend - a significant portion of these imports may inadvertently increase India's dependence on China. Several prominent German automotive brands producing EVs are now under Chinese ownership or have substantial Chinese investments, meaning that even when India imports EVs from Germany, a notable part of the value chain is likely controlled by Chinese entities. This hidden reliance on China, compounded by the lack of a dedicated Harmonized System (HS) code in India to track EV imports and exports accurately, raises important questions about the long-term sustainability and strategic implications of India's EV strategy.”
Several German EV giants are now owned by the Chinese, and more and more Chinese EV brands have invaded the competitive German market.
In his piece, Rakshith prescribes several commonsense solutions to overcome the Chinese dominance. For that, you have to head over here to read his full piece.
The Constitution at the Centre of a National Discourse
In his latest column for Mint, Takshashila co-founder Nitin Pai posits that though the Constitution is perhaps the most important book we could have, it is dangerous to uphold it for all the wrong reasons.
The pre-election discourse specifically focused on, among other things, the Constitution. Nitin writes:
“In some places at least, the Constitution was conflated with India’s policy of reservations and people voted to preserve it. Now there is nothing wrong in voting for reservations. It is the equation of the Constitution with a specific policy—in this case education and job quotas—that ought to worry us. Social justice is one of the first objectives of the Indian republic.”
He reminds us how, in 1949, when Dr Babasahed Ambedkar was asked why the word ‘Socialism’ was not included in the Constitution, he replied, that it would be unwise to commit future generations to a particular policy, however desirable it might seem at the time. The same goes for reservations.
For good measure, he tells us that it is wrong to call the Constitution a “Holy” book.
“The risk of deifying or sanctifying a book is that it becomes possible to worship it while ignoring its content. Indian society has successfully raised the Buddha, Rabindranath Tagore, M. K. Gandhi and Ambedkar onto pedestals while forgetting the principles they advocated. The Buddha, it is often forgotten and records show, had a non-theistic religious persuasion. Tagore is included in the nationalist pantheon despite his rejection of the idea. Gandhi is frequently a statue, road or a pretext for prohibition. Ambedkar, who warned against hero worship, seems to be worshipped as a statue even as his ideas on constitutionalism and building a casteless society are ignored. We must not allow the Constitution to go the same way. In any case, a holy book for a secular state is a contradiction in terms.”
You can read his full piece here.
An all-new video version of All Things Policy
Takshashila’s Anupam Manur and Manoj Kewalramani seem to be having some serious fun in this deep and illuminating discussion on the politics of labour in India.
With geopolitical competition bearing heavy on economic globalisation, the past few years have seen a lot of talk about the politicisation of capital. But what is less talked about is the politics of labour. How is geopolitical competition reshaping the discourse around migration and talent acquisition? Is there brewing nativism and sub-nationalism that threatens labour mobility? Can new ideas of inclusivity enhance labour welfare?
Deep, yet relevant and important questions.
Watch their interaction here.
Why the CCP’s Third Plenum is Important
Against the backdrop of economic challenges and shaken confidence of Chinese citizens, entrepreneurs and international investors, the leadership of the Chinese Communist Party gathered from July 15 to 18 in Beijing for the Third Plenum. After the meeting, the CCP presented a 60-page document outlining its plans for reform and modernization.
Takshashia’s Manoj Kewalramani joined experts from around the world in the China Spektrum Online Discussion to talk about this document threadbare. Panelists included Jude Blanchette (CSIS), Katja Drinhausen (MERICS) and Kristin Shi-Kupfer (University of Trier), apart from Manoj. They discussed the outcomes of the Third Plenum and the implications for international stakeholders. The session was moderated by Claudia Wessling, Director Communications & Publications at MERICS.
What is the China Spektrum? It is a collaborative research project by MERICS and the China Institute of the University of Trier that analyses public debates in China.
Watch their panel here.
Reimagining Social Security for the 21st Century
India’s social security system suffers from inadequate coverage and financing, necessitating an urgent reimagining to broaden its reach and diversify its funding sources. A significant challenge lies in effectively connecting potential contributors with those in need of a social security safety net.
To that end, Takshashila’s Arindam Goswami has authored a paper that proposes a Multi-Contributor Social Security system (MCSS). In this system, individuals can designate a bank account for MCSS contributions, which can come from various entities, including governments, employers, employees, philanthropists, individuals, and companies under CSR, with tax benefits for contributors. A key feature of this system is that contributors can search for and select recipients based on criteria such as age, income, and specific needs, and can specify the purpose of their contributions. Account holders can also broadcast the categories of their needs.
Read the full paper here.
The India-Bhutan Paradigm and a Delicate Balance
India's new foreign secretary Vikram Misri completed his maiden official visit to Bhutan in the third week of July, where he met the Prime Minister, foreign minister and foreign secretary. He also co-chaired the third Bhutan-India Development Cooperation Talks of the 13th Five Year Plan along with his counterpart Pema Choden. The visit was a perfect fit for Bhutan, which received crucial financial support for a range of projects as part of the 13th Five-Year Plan. It appears that India has achieved a closer and stronger relationship with its neighbour.
In his latest analytical piece for The New Indian Express, Prof Y Nithiyanandanam of Takshashila explores the delicate balance in the Himalayan kingdom of Bhutan vis-à-vis India and China. He writes:
“Given its future requirements and aspirations, Bhutan will probably go beyond India and interact, to some degree, with other countries, including China. But it won't happen right away since Bhutan mostly depends on India's financial backing.”
He adds:
“Bhutan aims to resolve the conflict with China amicably and continue following the MoU on the three-stage road map developed in October 2021. Held on the margins of the 13th Expert Group Meeting (EGM) in August 2023, the Joint Technical Team on the Delimitation of Bhutan-China Boundary attended its first meeting. The impact of this meeting and the subsequent 25th Round of China-Bhutan Boundary Talks held in October 2023 remains to be seen. Progressive measures have, however, been taken to define the line between the two nations.”
Read his full piece here.
Will the ICE age last?
In his latest piece for Mint, Takshashila co-founder Narayan Ramachandran writes on how the road to a full-EV transport ecosystem has progressively become bumpier rather than smooth. He reminds us:
“In 2023, EV sales neared 14 million, meaning that 1 in 5 cars sold was electric. Of these, 60% were in China, 25% in Europe and 10% in the US, with three markets adding up to 95% of the total. According to Climate Action Tracker, an independent organization, EVs need to reach 75-95% of all passenger vehicle sales for consistency with international climate goals by 2030.”
It is not all doom and gloom, of course. In India, for instance, EV sales crossed 1% in 2022 and are now approaching 2%. India’s EV growth rate is about three times the global growth rate now. Similarly, Israel jumped from under 1% to over 8% in a span of just two years.
Yet, there are more challenges than earlier. Read Narayan’s piece in Mint to understand where we stand on the EV vs ICE battle.