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AI Is the New Oil, and India Risks Falling Behind, Economic Survey Warns

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India faces a narrowing opportunity to secure its place in an economy increasingly shaped by artificial intelligence, advanced computing, and control over critical technologies, according to the Economic Survey 2025–26. The report cautions that without swift and strategic action, the country risks remaining a peripheral player while global power structures are rewritten around AI capabilities.

The Survey argues that just as oil and steel underpinned economic dominance in the last century, the defining resource of the 21st century is “compute.” This includes not only high-end processors and graphics chips, but also the energy systems, data centres, and critical minerals required to sustain them. Nations that control these assets, the report notes, are gaining disproportionate influence over trade, innovation, and geopolitics.

Technology Rivalries Reshaping Global Power

The warning comes at a time of escalating competition between the United States and China, where technological leadership is increasingly outweighing traditional military strength. In this environment, the Survey says, economic resilience alone is no longer enough. Instead, India must aim for “strategic indispensability” — a position where it becomes so integral to global technology value chains that it cannot be easily excluded or replaced.

The report points to the United States’ active role in reshaping global tech ecosystems through export controls, licensing rules, selective alliances, and trade agreements. Washington-led efforts to build a trusted AI supply chain — spanning chips, energy, advanced manufacturing, data infrastructure, and critical minerals — are already redirecting global investment and innovation flows.

At the same time, the Survey highlights risks for emerging economies stemming from changes in global financial regulation and digital finance frameworks. These shifts could influence cross-border capital movement just as AI-driven investment becomes increasingly concentrated in a handful of technology-dominant regions.

Two Competing Models in the AI Race

According to the Survey, the global AI landscape is being shaped by two contrasting approaches. Advanced Western economies largely follow a top-down model dominated by a small number of hyperscale firms, frontier AI models, and heavily concentrated intellectual property backed by massive private capital. While powerful, this model is expensive and increasingly closed to late entrants.

By contrast, many developing and middle-income countries are pursuing a bottom-up strategy that emphasises decentralised innovation, strong public-sector coordination, and sector-specific AI applications built on public digital infrastructure. The Survey concludes that attempting to mirror the US or Chinese model would be unrealistic for India and could divert resources away from more effective pathways.

Instead, it describes a bottom-up approach as essential for India’s circumstances. This would prioritise practical AI use cases in healthcare, agriculture, education, finance, logistics, climate adaptation, and governance. Open-source technologies, shared public datasets, and domestic innovation networks should take precedence over reliance on large, proprietary AI systems.

India’s Untapped Advantages

Despite the risks, the Survey underscores that India enters the AI era with significant strengths. The country is among the world’s leading contributors to AI research and possesses one of the largest pools of technical talent globally. Recent international assessments rank India just behind the United States in workforce readiness and AI literacy.

Another key advantage lies in India’s vast and diverse data ecosystem. Its linguistic, geographic, and socio-economic diversity generates rich datasets with high potential value across sectors such as public health, agriculture, urban planning, and disaster resilience. With appropriate safeguards and governance, this data could become a powerful competitive asset.

A Narrow Window for Action

The Survey, however, is clear that these advantages will not translate into leadership without coordinated policy execution. It calls for accelerated investment in computing infrastructure, secure access to critical minerals, robust data governance frameworks, and institutions capable of supporting sustained innovation.

Failure to act decisively, the report warns, could leave India structurally dependent on foreign technology platforms for decades to come. The message is unambiguous: the window to shape India’s role in the AI-driven global economy is limited, and delay could carry long-term consequences.

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Business & Economy

YouTube Is Now a ₹18,000 Crore Economic Engine in India

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India’s YouTube creator economy has grown into a significant digital business ecosystem, contributing an estimated ₹18,000 crore to the country’s GDP in 2025 and supporting approximately 9.6 lakh jobs, according to a new report.

The figures highlight how online video has evolved beyond entertainment and personal content. Creators now operate businesses that depend on advertising, brand partnerships, production services, digital marketing and other parts of the wider online economy.

More Than 20,000 Indian Channels Have Over 1 Million Subscribers

The scale of India’s YouTube ecosystem has expanded rapidly. According to the report, more than 20,000 channels in India had crossed the one-million-subscriber mark by June 2026.

Reaching such an audience can turn a YouTube channel into a substantial commercial operation. Large channels can generate revenue through advertising while also attracting sponsorships, brand collaborations and other business opportunities.

The growth is not restricted to a handful of entertainment channels. Creators are producing content across education, technology, gaming, food, travel, fitness, news, lifestyle and regional culture.

Regional Content Helps Expand YouTube’s Reach

India’s diverse language landscape has played an important role in the expansion of online video.

Creators from smaller cities and towns are increasingly producing content in regional languages, allowing them to connect with audiences that may not primarily consume English-language videos.

Improved internet access and widespread smartphone use have also lowered the barriers to becoming a content creator. A person can now build an audience without the traditional infrastructure associated with television or other mainstream media.

High-Earning YouTube Channels Are Increasing

The report also points to growth in the number of Indian YouTube channels generating substantial revenue.

The number of channels earning ₹10 lakh or more annually increased by more than 20% in a year, according to the report. The increase suggests that monetisation opportunities are expanding as more creators build sizable audiences and develop multiple income streams.

Advertising remains an important source of revenue, but creators can also earn through sponsored campaigns, brand partnerships and other commercial arrangements connected to their audiences.

YouTube Supports Jobs Beyond Content Creation

The economic impact of YouTube extends well beyond the creators appearing on camera.

A successful channel can require video editors, graphic designers, camera operators, sound specialists, writers, social media managers, digital marketers and administrative staff. Businesses working with creators also contribute to advertising, production, equipment and brand-management activities.

Taking this broader ecosystem into account, the report estimates that YouTube’s creator economy supported approximately 9.6 lakh jobs in India during 2025.

This means the platform’s economic footprint includes both direct creator-related work and employment generated by businesses serving the growing digital-content industry.

From YouTube Channels to Digital Businesses

For many creators, a channel is no longer simply a place to upload videos. It can function as a digital business built around a specific audience and subject.

Creators can use their reach to work with brands, promote products and services, develop partnerships and create additional commercial opportunities. This has encouraged an expanding network of agencies and freelancers specializing in editing, design, marketing, sponsorship management and other creator services.

However, revenue remains uneven across the industry. Subscriber numbers alone do not guarantee a particular income level, as earnings can vary according to audience engagement, content category, advertising demand, geography and the creator’s monetisation strategy.

India’s Creator Economy Continues to Expand

The latest figures demonstrate the growing economic importance of online video in India. The reported ₹18,000 crore GDP contribution and 9.6 lakh jobs supported by the YouTube creator ecosystem illustrate how digital content has developed into a broader commercial sector.

With thousands of channels reaching million-subscriber audiences and the number of higher-earning creators continuing to increase, YouTube is becoming an important part of India’s digital economy.

The expansion also shows how content creation is generating opportunities across a much wider network of professionals, from editors and designers to marketers, advertisers and production specialists.

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Business & Economy

GST Enters AI Era as Government Unveils Next Big Compliance Push

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India’s Goods and Services Tax (GST) framework is entering a new phase of technology-led reform as authorities increasingly adopt artificial intelligence, advanced analytics, and digital verification systems to improve compliance and streamline tax administration.

As the indirect tax regime completes nearly a decade since its launch, policymakers are focusing on reducing manual intervention, enhancing transparency, and improving efficiency across the taxation ecosystem.

Government Shifts Focus to AI-Based Compliance Systems

Officials say the next phase of GST reforms will prioritise artificial intelligence-driven monitoring tools, faster refund processing, and automated data validation rather than a sole focus on tax rate adjustments.

The objective is to simplify compliance for businesses—especially micro, small and medium enterprises (MSMEs)—while strengthening the government’s ability to detect tax irregularities through integrated data systems.

Authorities are also working toward deeper coordination between GST, income tax, and customs databases. This integration is expected to enable real-time identification of inconsistencies and improve enforcement efficiency using data-driven insights.

GST’s Journey From Tax Reform to Digital Ecosystem

Introduced on July 1, 2017, GST replaced a complex structure of multiple indirect taxes with a unified national framework aimed at creating a “One Nation, One Tax” system.

Since its rollout, the number of registered taxpayers has grown significantly—from about 66.5 lakh in 2017 to nearly 1.6 crore in 2026—reflecting wider adoption and formalisation of the tax base.

Over time, the tax structure has also evolved, with periodic revisions to rate slabs and classification categories. Essential goods have largely been rationalised across standardised brackets, while higher rates continue to apply to luxury and demerit items.

GST Revenues Show Strong Long-Term Growth

Government data indicates steady growth in GST collections over the past decade. Average monthly revenue, which stood at around ₹89,700 crore during the initial implementation phase, has risen to approximately ₹1.85 lakh crore in 2025–26.

Total GST collections for the financial year 2025–26 reached an estimated ₹22.27 lakh crore, marking an increase of 8.3% compared to the previous year.

However, petroleum products remain outside the GST framework due to lack of consensus between the Centre and states on inclusion within the unified tax system.

Digital Integration to Strengthen Tax Enforcement

Looking ahead, authorities plan to expand the use of AI and analytics across tax administration systems to detect evasion patterns and improve compliance accuracy.

The proposed framework aims to integrate GST with income tax and customs data, enabling a more comprehensive and automated monitoring system for financial transactions and filings.

Officials believe this shift will reduce paperwork, improve refund timelines, and create a more transparent and efficient tax environment for businesses and individuals alike.

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Business & Economy

VP Radhakrishnan Urges MSMEs to Harness AI for Viksit Bharat at the International MSME Day 2026 Event

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At the International MSME Day 2026 celebrations held at the Dr. Ambedkar International Centre, Vice President C. P. Radhakrishnan emphasized that Micro, Small, and Medium Enterprises (MSMEs) will play a defining role in achieving India’s long-term development vision of “Viksit Bharat @2047.”

Addressing the ‘MSME Day 2026–Udyami Bharat’ gathering, the Vice President described MSMEs as the backbone of India’s economy, representing the ambition of young entrepreneurs, the determination of first-generation business owners, and the resilience of small industries across the country. He noted that India’s journey toward becoming a developed nation will be strongly driven by this sector’s growth and innovation.

MSMEs urged to scale up with quality and ambition

Drawing from his experience in public service and industry leadership, Radhakrishnan encouraged entrepreneurs to stay committed to their businesses and overcome early-stage challenges with persistence. He stressed that maintaining high product and service quality is essential for survival in a competitive global marketplace.

While cost efficiency remains important, he cautioned that it should never compromise standards. He also called on enterprises to continuously expand their scale of operations, urging micro businesses to grow into small enterprises and small firms to evolve into medium-sized companies.

He highlighted the importance of supportive policies, easier access to credit, and increased investment to enable sustained growth within the MSME ecosystem.

AI and digital tools positioned as growth drivers

A major focus of the Vice President’s address was the growing importance of Artificial Intelligence (AI) and digital transformation. Aligning with the global theme “Human-Centered Entrepreneurship in an AI-Driven Future,” he encouraged MSMEs to embrace emerging technologies as opportunities rather than threats.

He compared current AI-driven changes to earlier technological shifts such as the introduction of computers, which initially raised concerns but eventually created new jobs and industries. According to him, AI can significantly enhance productivity, innovation, and global competitiveness for small businesses.

Government launches new digital platforms for MSMEs

The event also saw the unveiling of several digital initiatives aimed at strengthening India’s MSME ecosystem:

  • PMEGP 2.0 Portal: Designed to streamline beneficiary processes and integrate with Jan Samarth Portal for faster credit access.
  • SAMADHAAN 2.0 Portal: A system to track delayed payments owed to MSMEs by government departments and agencies.
  • MSME Global Mart 2.0: Integrated with the Open Network for Digital Commerce (ONDC), it aims to expand market access for small businesses across India and abroad.
  • Multilingual AI Support System: An AI-based platform offering services in 22 Indian languages, including voice-based grievance redressal and document translation to improve accessibility.

Push toward a digitally empowered MSME sector

The government’s continued rollout of digital platforms reflects a broader strategy focused on formalization, innovation, and technology adoption within the MSME sector. Officials said these initiatives are designed to improve ease of doing business, enhance transparency, and help small enterprises compete in both domestic and global markets.

With AI integration and digital infrastructure gaining momentum, policymakers believe MSMEs are well-positioned to become a central force in India’s economic transformation.

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