India must bet on frugal innovation and vertical AI, not foundation models: IGIC 2026
New Delhi, June 10
India has the firepower to become an AI powerhouse, but winning the global race means skipping the foundation model sprint and doubling down on frugal innovation and vertical AI. That was the dominant message on Day 1 of the 5th India Global Innovation Connect 2026, which opened in New Delhi today under the theme "India in the Age of AI".
Organised by Smadja & Smadja Strategic Advisory, the two-day summit brought together policymakers, technologists and investors to map India's strategic choices. With over US$20 billion committed to AI, nearly 2,200 Global Capability Centres employing 2.5 million professionals, and advanced digital public infrastructure, the foundations are in place. The bottleneck now is procurement, financing and deep-tech commercialisation.
The opening plenary set the tone for where India should compete and where it should leapfrog. V Kamakoti, Director, IIT Madras, stressed that AI development must be guided by "ethics, accountability and sustainability."
Sanjeev Sanyal, Member of PM Modi's Economic Advisory Council, argued for regulating AI like financial markets treat non-deterministic systems: "AI is a non-deterministic complex system -- and we need to regulate it like one. What works is skin in the game: clear accountability, identifiable actors who bear the consequences of failure... Ultimately, we will need a global governance architecture for AI -- not unlike what SWIFT or the IMF represent for finance."
Claude Smadja, Co-founder of IGIC and Chairman, Smadja & Smadja, framed India's advantage as its ability to "achieve more with less". "India's strength has always been its ability to achieve more with less. Just as frugal innovation enabled remarkable achievements in sectors like space technology, the AI era presents a similar opportunity. Through strategic partnerships, leveraging open innovation platforms and focusing on strategic sectors, India can accelerate innovation while overcoming resource constraints," he said.
Investors echoed the vertical focus. Will Poole, Co-Founder and Managing Partner, Capria Ventures, said: "The opportunity is not to chase foundation models, but to build vertically focused AI solutions that solve real-world problems at scale and can be exported globally." Padmaja Ruparel, Founding Partner, Indian Angel Network, highlighted founder ambition but called for "patient capital and stronger funding mechanisms for deep-tech ventures".
Sessions throughout the day covered semiconductor innovation, biotech and healthtech. Ruchir Dixit, Vice President & Country Manager, Siemens EDA, said India can "not only participate in the global technology ecosystem but help shape it", driven by engineering talent and closer industry-academia-government collaboration.
Over the next two days, IGIC 2026 will dive into startup funding, digital sovereignty, defence innovation and sustainability tech as India charts its own path in the AI order.
— ANI
Reader Comments
"Skin in the game" is exactly what's missing from most AI discourse. It's all hype and no accountability right now. But I worry—will our policymakers actually create enforceable regulations or just more paperwork that slows down startups? The balance between innovation and ethics is crucial, and I'm not sure we've cracked it yet.
Interesting to see India take this contrarian position. As someone who's worked in Silicon Valley, I've seen the mad rush for foundation models. India's approach makes business sense—vertical AI can deliver ROI faster. But 'patient capital' is easier said than done. Most VCs want hockey-stick growth, not steady progress. Can India's ecosystem support this long-term view?
All this is great, but let's be real—our education system is still churning out rote learners, not problem solvers. You can't build an AI powerhouse without reforming how we teach critical thinking and interdisciplinary skills. That's the real bottleneck, not procurement. Otherwise, we'll just end up with more GCCs doing low-value work instead of true innovation.
IIM and IIT grads already get it—they're building AI for dairy farming, for predicting crop yields, for diagnosing diseases from mobile photos. That's the "jugaad" mindset at scale. But we need proper funding for deep-tech, not just fintech. Padmaja Ruparel's point about "patient capital" hits the nail on the head. Our startups need runway, not quick exits.
20 billion dollars committed, but how
We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.