Punnam Raju Manthena, Cofounder & CEO at Tekskills Inc. Partnering with clients across the globe in their digital transformation journeys.
India is not merely catching up with the AI and IoT revolution, but is actually home to where the evolution is happening. This is a scenario that may sound far-fetched to start with. As an IT industry watcher, you might rave about a typical Silicon Valley lab but are not greatly impressed with Indian infrastructure in comparison.
Look a bit deeper, and you will see that the Indian environment is coming up with battle-tested solutions that actually solve problems, be it in manufacturing, finance, banking, agriculture, rural healthcare and more. Despite the inherent constraints relating to infrastructure, budgets and connectivity, they are developing high-quality solutions, so much so that the next time you want an AI-based solution, you may want to look at India seriously.
Compared to an Indian lab, a Silicon Valley tech lab is well-funded and so has access to the latest technologies, resources and a great talent pool. It can focus on research without worrying so much about investment returns or technology failures. Importantly, it doesn’t have to make money from the start to survive, and it can create a buzz in the market long before the product actually rolls out.
An Indian AI development facility focuses on real-world applications that solve problems. It works with all the constraints imaginable, be it hardware, software, internet access, infrastructure and marketability. Also, it has to worry about earning money from day one to survive and can’t afford to spend a great deal of time on research and development.
Now, why and how are such constraints valuable for AI development? First, they bring out creativity, since you can come up with ingenious work-arounds instead of depending on the “set” options. Also, you can avoid “choice paralysis” and work within known boundaries and bottlenecks. You avoid overengineering and work on only what genuinely adds value, since you are always aware of your time and resource cap. You learn to live with unreliable connectivity, limited hardware, cost sensitivity and highly variable users from the very start. Rather, you factor in these constraints and develop your solutions.
For many years, India was seen as a huge provider of affordable outsourced talent for software coding and IT services, rather than original and innovative product design. Silicon Valley generally worked on original research, created products and services and steered market trends (e.g., smartphones and internet search engines), while India focused more on coding, testing, deployment and other related IT services. So, India was viewed as a low-cost labor house rather than an independent or autonomous center of technological breakthroughs.
But things have changed. Today, India doesn’t just provide inexpensive, outsourced human resources, but designs and develops globally accepted products, services and technologies. No longer just a back office to Silicon Valley, India has progressed from a worker to a possessor. The adage “West designs, India develops” has now changed to “India architects, develops and scales globally.”
Leveraging their indigenous design and development models, low-code infrastructure and vast human resource pool, Indian businesses are now making proven software products and services comparable to what Silicon Valley does. It’s no longer moving along a path drawn by Silicon Valley, but is actually creating its own path—despite the most imperfect conditions, uncertainties and connectivity gaps.
So, what makes India an important development or testing environment? India is seeing massive infrastructure growth—from $190 billion in 2025 to $205 billion in 2026 and expected to reach $302 billion by 2031, as per Mordor Intelligence. How does improved infrastructure impact AI development? It ensures there is adequate electrical power to meet the massive electricity demands of data centers, as well as the huge demand for evaporative cooling.
The Indian AI market is expected to reach $20 billion by 2027, growing at a CAGR of 30%, as per Deloitte. Another report sees the Indian AI infrastructure market at $7.62 billion in 2024, projected to reach $21.142 billion by 2029. So, the ecosystem is there.
Some specific characteristics that make India valuable as a development and testing environment relate to the Indian workforce and the cost advantage that the Indian environment can bring. The big plus with India is that it has about 4 million working software professionals plus about 700,000 techies graduating every year, making it one of the largest tech manpower sources alongside the U.S.
About 65% of India’s population is under the age of 35, the age group that’s likely to be open to learning and adapting to new technologies. There’s a cost advantage, too, since development and testing operations in India tend to be lower compared to the U.S. Also, India offers a 24/7 development cycle, which enables round-the-clock testing and quicker time to market. Added to all this, the complicated real-life conditions that India offers can really test the developed solution and move it toward maturity.
India offers a positive development environment, but what can global technology leaders learn from a typical Indian environment? The first thing is not to get bogged down by constraints but to work around them. Next is to develop real-world applications that actually solve grassroots problems. Importantly, development is to be directed at what adds functionality, value and cost advantage. They need to incorporate these aspects into their own AI development strategies.
To sum it all up, India is no longer a destination for technology. India is producing AI and IoT solutions that are technically strong, mature and globally relevant. The India AI Impact Summit 2026, with the summit mantra, “From Vision to Action: India Leading the AI Impact Movement!” has highlighted the growing importance of India. Global leaders may well stop sending solutions to India, and instead take them from India, where constraint is not a bug, but a welcome feature.
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