India Must Boost R&D and Infrastructure to Unlock AI Potential, Says KPMG
A KPMG report highlights the need for skilled talent and robust infrastructure to unlock India's AI economic potential and social gains.
India stands at a pivotal crossroads in its technological journey. According to a comprehensive report released by KPMG on October 26, 2026, the nation must strategically enhance its India AI economic potential by strengthening its research and development (R&D) capabilities, computing infrastructure, and talent pool to turn emerging technologies into tangible social and economic victories.
While the report acknowledges that technology is a primary driver for competitiveness, productivity, and the delivery of public services, it warns that simply developing technology is not enough. The real challenge, and the key to success, lies in the capacity to deploy these advanced solutions at a massive scale across the country.
The Five Pillars of AI Transformation
To bridge the gap between innovation and implementation, the KPMG report identifies five critical building blocks that India must prioritize:
- Skilled Talent: Cultivating a workforce capable of handling complex AI systems.
- Robust R&D: Investing in research to create homegrown technological breakthroughs.
- Advanced Computing and Data Infrastructure: Building the hardware and data systems necessary to power AI.
- Scalable Enterprises: Supporting businesses that can take technology from a pilot phase to national scale.
- Digital Public Infrastructure: Leveraging open systems to ensure inclusive growth.
Learning from the UPI Success Story
The report points to the Unified Payments Interface (UPI) as a gold standard for how digital infrastructure can transform a nation. The scale of UPI's success is staggering; in FY2025-26, it processed over 24,161 crore transactions, amounting to approximately Rs 314 lakh crore. As of June 2026, the system served a massive user base of 55.49 crore people, proving that India has the appetite and the capability for large-scale digital adoption.
Government Vision and Regulatory Frameworks
The Indian government is actively aligning its national agenda with these technological shifts. Guided by Prime Minister Narendra Modi’s M.A.N.A.V. vision—which emphasizes inclusive AI development and national sovereignty—the administration is moving toward a structured regulatory environment.
Union Electronics and Information Technology Minister Ashwini Vaishnaw has announced that a consultation paper on AI regulation will be released within a month. This upcoming framework will specifically address critical concerns such as:
- AI safety protocols
- The menace of deepfakes
- Ensuring human welfare in an automated age
Regional Ambitions and Infrastructure Surge
The drive toward an AI-powered economy is also manifesting at the state level. During the UP GCC Innovation Summit in Lucknow, Alok Kumar, the Principal Secretary for IT and Electronics, revealed ambitious plans to scale Global Capability Centers (GCCs) in Uttar Pradesh to over 500 by the year 2031.
Supporting this ambition is a projected explosion in data capacity. India's operational data-centre capacity is expected to jump from 1.8 GW in early 2026 to a staggering 7-8 GW by 2030. This growth is being fueled by significant private sector investments. In a recent development, L&T Technology Services has secured a five-year contract with Nokia to push forward critical engineering and R&D projects, signaling a strong corporate commitment to India's technological future.