India’s AI future: Four shifts to watch in 2026

In Silicon Valley, investors are whispering about an AI bubble.

But in India, AI founders, investors, and experts are seeing something else: headroom.

“If the US falls 50%, India can still grow 10%,” Tracxn co-founder Abhishek Goyal tells Tech in Asia. India accounts for a tiny part of global AI funding today, “maybe 1%” by Goyal’s estimate.

This is similar to the dotcom era, when the US market meltdown barely grazed India, simply because there wasn’t much to burst, he says.

AI could still reshape India, he notes, but 2026 will be less about frothy valuations and more about what actually gets built and deployed.

Tech in Asia’s conversations with founders, investors, and AI engineers suggest four big shifts: a push for local AI (digital sovereignty), the importance of voice AI, the tech moving from pilot stages to production inside enterprises, and the early rise of physical AI.

Made-in-India AI

If 2025 were the year of ChatGPT and Claude, 2026 will be when India starts insisting on using its own models.

One of the proposals included in the IndiaAI Mission, the government’s flagship AI program, is the development of indigenous foundational AI models that can run under local rules and data regimes.

Sarvam AI, for instance, is “building the first sovereign model for India,” says Aalekh Sharan, who leads agentic AI and public sector at the firm. Its model, he says, is being trained on “sovereign, verifiable data” from India and is slated to launch around the IndiaAI Impact Summit in February 2026.

The idea isn’t to outscore frontier models on benchmarks but to help India learn how to build AI applications, boost local capability, and become self-reliant on a critical technology.

Sarvam AI is also building an agentic AI system for enterprises, where NITI Aayog, the government’s public policy think tank, will analyze large amounts of data and help make policy decisions.

Voice AI gets louder

From pilots to production

AI steps out of the computer