How chinas deepseek AI affect indian IT sector industry
Biggest lesson it offers to Indian IT giants is the power of research and development
DeepSeek’s innovation
It has caught the attention of not just policymakers but also business leaders such as Mark Zuckerberg, who opened war rooms for engineers after DeepSeek’s success and who are now eager to understand its formula for disruption.
So what is DeepSeek ?
It is originally not a core AI firm but a financial trading company, create generative AI models, OpenAI’s ChatGPT, while requiring significantly lower costs for development and operations.
Placing China at an advantage
How does DeepSeek’s Innovation affect India’s dominance in IT?
Reason of DeepSeek’s success
lies in its ability to overcome the limitations of expensive computational power
We should remember India’s long-standing dominance
in the global information technology (IT) sector, which has is competitive edge through an
- abundant supply of skilled,
- English-speaking,
- and cost-effective labour.
serious threat to India’s IT dominance
However, with generative AI , low both skill and language barriers,
DeepSeek’s innovation has accelerated the rise of cheaper, more efficient alternatives that can replace low-cost IT service providers, posing a serious threat to India’s IT dominance.
DeepSeek’s breakthrough not only strengthens China’s position in AI but also opens the door for broader advancements in IT services through AI-driven automation.
Indian AI sector vs AI
The Indian IT sector, which has long thrived on cost-effective labour-led service models,
It now faces a reality where AI can easily replace
- repetitive,
- low-value tasks that were once its competitive advantage.
What can organisations learn from DeepSeek?
power of research and development (R&D)
1 The biggest lesson DeepSeek offers to Indian IT giants is the power of research and development (R&D).
2 DeepSeek treated AI product development as a “sidekick” not a core activity.
This highlights the importance of utilising surplus capital as well as idle resources, both capital and human, towards R&D not only for increasing workforce efficiency.
research, experimentation, and a tolerance
Companies should foster an environment that encourages research, experimentation, and a tolerance for failure.
Instead of focusing solely on delivering immediate business objectives.
treating AI development as a secondary initiative
DeepSeek’s approach of treating AI development as a secondary initiative reflects its willingness to take risks without expecting guaranteed returns.
For Indian IT firms, it is clear: investing in R&D, even as a secondary pursuit, can lead to game-changing breakthroughs.
Future priorities for India
India lags behind in R&D investment
It is a critical factor for sustaining long-term economic competitiveness.
India’s gross domestic expenditure on R&D (GERD) remains below 1% of GDP, far lower than that of other major economies, including China.
According to UNESCO Institute for Statistics (UIS) data, China invested around 2.43% of its GDP in R&D as of 2021, underscoring India’s need for urgent policy intervention in boosting domestic R&D in cutting-edge technologies such as AI.
A key issue is the lack of investment in
- advanced research,
- particularly in hiring top talent,
- including PhDs, who are essential for driving innovation.
to prioritise manufacturing or services ?
This false dichotomy overlooks the strong linkages between the two sectors.
Manufacturing and services complement each other and thrive together. Instead of choosing one over the other, India must adopt a balanced approach that fosters growth in both areas.
India’s dominance in IT is now under threat
The focus should shift toward building a workforce that enhances productivity through AI rather than being replaced by it.
Traditional comparative advantages such as cheap labour and English proficiency are no longer sufficient in the global AI-driven economy.
Instead, India must recognise and retain its high-skilled domestic talent to ensure innovation happens within the country rather than abroad.
Focus on quantum technology
quantum computing race में पिछड़ना नहीं है ?
India must ensure it does not fall behind in the next major technological frontier, which is the quantum computing race.
Advancements in quantum technology will be crucial for maintaining technological leadership in the coming decades.
To stay competitive, the government and private sector must significantly
- increase investments in R&D,
- particularly in quantum computing alongside AI,
- and actively recruit top researchers to drive breakthroughs in this field.
Source the hindu
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