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​​DeepSeek Breakthrough: A Wake-Up Call for India’s AI Strategy?
DeepSeek is more than an AI breakthrough– it is a critical geopolitical inflection point: China's technological resilience transcending Western containment strategies. It signals a seismic shift in the US-China tech rivalry, challenging semiconductor export controls and democratizing AI development.
DeepSeek upends the idea that cutting-edge AI requires massive capital. This shift has sent shockwaves through financial markets, contributing to NVIDIA's staggering $600 billion drop in market value, reflecting broader concerns about U.S. competitiveness in AI.
Its success also highlights the potential for Chinese models to influence global narratives. As concerns mount over national security and data privacy, parallels are drawn to the TikTok debate, suggesting that DeepSeek could be leveraged for espionage, data collection, and influence campaigns. Deepseek’s chatbot, for example, avoids answering questions on Taiwan, Tibet, Tiananmen Square, Arunachal Pradesh, Ladakh—adhering to China’s strict internet regulations. However, when DeepSeek R1 runs on AI-powered search engines like Perplexity, hosted on U.S. servers, these restrictions do not apply.
For India, this underscores an urgent need to recalibrate strategy. Experts say that funding constraints can no longer be an excuse, and India has already proven capabilities in frugal engineering (evidenced by India’s space missions). They criticise arguments advocating for India to focus solely on practical applications of American models rather than invest in training its own large language models. India must prepare for the ‘post-IT’ era, where AI could upend the country’s IT and outsourcing industry.
On 30 January, the Indian government announced that it has decided to build a domestic large language model of its own as part of the IndiaAI Mission.
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India’s Critical Minerals Push
The recently approved ₹16,300-crore (approximately $1.95 billion) National Critical Minerals Mission (NCMM) represents a strategic effort to secure essential minerals for clean energy and technology. By focusing on domestic exploration and global asset acquisition, India aims to reduce its dependence on China, which dominates rare earth processing. China continues to leverage its critical mineral exports as a geopolitical tool, particularly in high-tech sectors like semiconductors, aerospace, and batteries. India’s initiative aligns with global efforts to counter Beijing’s dominance and bolster self-reliance in critical minerals. However, it remains to be seen how the mission tackles challenges such as regulatory hurdles and the need for robust infrastructure.
India-China: Engagement Amid Uncertainty
During Foreign Secretary Vikram Misri's visit to China on January 26-27, both sides agreed to resume the Kailash Mansarovar pilgrimage, and in principle agreed to resume direct flights and visas. They also agreed to conduct talks to discuss cross-border rivers cooperation– this comes as India remains concerned as a lower riparian country about the impact of a mega dam being built on the Yarlung Tsangpo in Tibet. Misri’s trip follows National Security Adviser Ajit Doval’s visit to Beijing last month. These meetings, set in motion after the troop disengagement announcement, come as geopolitical uncertainty grows—especially around President Trump’s China policy.
Shipbuilding and Strategic Autonomy
A US government investigation found that Chinese subsidies give its shipbuilding industry an unfair advantage, undercutting American competitors. Shipbuilding is expected to be a Trump administration priority to counter China’s maritime dominance. Experts have stressed on the need for budget discipline, partnerships with Japan and South Korea, and workforce modernization. India faces its own reckoning, with shipbuilding ambitions constrained by high financing costs, import dependence for critical components, outdated technology, and regulatory bottlenecks. With China controlling 40% of global shipbuilding and India at <1% market share, New Delhi’s reliance on imports exposes its strategic vulnerabilities.
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