Abstract:
The general-purpose nature of AI technologies means that it has cross-industry effects; that is, it not only reshapes prevailing economic logic and business models but also potentially configures how particular industries are organised. This means the success of India’s national AI priorities depends critically on a federated strategy that leverages industrial and sectoral strength across its top regional innovation hubs of Bengaluru, Delhi NCR, Hyderabad, Mumbai-Pune, and Chennai. Each of these tech hubs are co-
located with industrial clusters such as automobile and electronic manufacturing, biopharma, and defence, with high AI innovation imperatives. These offer substantial opportunities for demand aggregation with the government playing a key role in creating
policy and platform for discovery and innovation alignment. This paper unpacks these distributed innovation dynamics and suggests how effective institutional design, targeted incentive structures, and interdisciplinary research and talent development
could not only help India unlock economic value from AI adoption but also create comparative advantage to secure strategic autonomy through differentiation and deep industrial and sectoral expertise.