Deloitte India Demands Government, Companies Act Now on Artificial Intelligence

July 5, 2026 6 min read

Venkatram, a senior leader at Deloitte India, told executives and policymakers gathered in New Delhi this week that the window for adopting artificial intelligence is closing. His remarks signal a growing sense of urgency among consulting firms that India must accelerate its AI deployment or risk losing competitive ground to faster-moving economies across Asia.

The Case for Immediate Action

Deloitte India's position rests on straightforward economics. Companies that delay AI integration face higher costs when they eventually catch up, while those that move early capture market share in sectors ranging from financial services to manufacturing. Venkatram pointed to productivity gains already visible in neighbouring markets where AI adoption has moved beyond pilot programmes into full operations. The message landed with particular force given ongoing concerns about India's pace of digital transformation compared with China, Singapore, and South Korea.

The consulting firm has been tracking AI implementation across South and Southeast Asia for three years. Its research shows companies in early-adopting markets report efficiency improvements between 15 and 30 percent within 18 months of deployment. Venkatram argued Indian businesses cannot afford to wait for perfect conditions before acting. "The technology is mature enough now," he told the audience, according to notes from the event. "What is missing is the willingness to commit resources at scale."

Government's Role in the AI Transition

The call for government involvement marks a notable shift in how major consulting firms frame AI strategy. Rather than treating adoption as a purely private-sector matter, Deloitte India's analysis emphasises the need for supportive policy frameworks, infrastructure investment, and workforce retraining programmes funded at the national level. Venkatram specifically urged New Delhi to consider tax incentives for AI research and development, faster clearance for technology partnerships with foreign firms, and expanded digital literacy programmes in secondary schools.

This push comes as the Indian government finalises its national AI strategy, a document expected to outline funding commitments and regulatory approaches for the sector. Officials have previously indicated that AI could contribute up to $500 billion to India's economy by 2025, a figure that assumes significant acceleration in current adoption rates. Whether that target is realistic depends largely on whether businesses and government agencies begin large-scale implementation within the next 12 to 18 months.

Regulatory Clarity Remains Elusive

One obstacle Venkatram flagged is the absence of clear rules around data privacy and AI liability. Companies hesitate to deploy AI systems at scale when the legal consequences of algorithmic errors remain undefined. The Ministry of Electronics and Information Technology has been working on AI governance frameworks, but industry groups say concrete legislation remains months away. That regulatory uncertainty creates a risk-averse environment where conservative firms choose to wait rather than invest.

The implications for foreign investors are significant. Multinational companies considering AI-related investments in India point to regulatory clarity as a key factor in their decision-making. Venkatram suggested that without clearer rules, India could see capital flow toward Singapore, Malaysia, and Vietnam, where technology regulations are more developed.

What This Means for Indian Businesses

For Indian companies, the Deloitte India assessment carries immediate practical implications. Firms in the banking and financial services sector are already using AI for fraud detection, customer service automation, and credit scoring. Those that have not yet deployed machine learning tools face a narrowing window before competitors establish advantages that are difficult to overturn. In retail and e-commerce, AI-driven inventory management and personalised marketing are becoming standard features rather than differentiators.

Smaller businesses face a tougher calculus. Enterprise-grade AI solutions require upfront investment that many mid-sized firms struggle to justify. Venkatram acknowledged this tension, arguing that the government should create subsidy programmes or low-interest financing mechanisms to help smaller companies access AI tools. Without such support, the productivity gains Deloitte India envisions could accrue primarily to large corporations, widening the gap between India's digital leaders and the rest of the economy.

The Talent Dimension

Any mass AI adoption effort runs into the same bottleneck: skilled workers. India produces a large number of engineering graduates each year, but the curriculum at most universities lags behind the skills needed to build and maintain production AI systems. Deloitte India has recommended that the government partner with private training providers to create rapid upskilling programmes focused on machine learning, data engineering, and AI system management. Venkatram suggested a target of training 500,000 workers within two years, though he acknowledged achieving that number would require unprecedented coordination between industry and academia.

The talent gap also shapes where AI investment flows. Bangalore, Hyderabad, and Pune remain the primary destinations for AI-related spending because those cities have the concentration of skilled workers that companies need. Regions outside these technology hubs face a chicken-and-egg problem: companies hesitate to locate AI operations there because talent is scarce, and talent remains scarce because companies do not locate there. Breaking this cycle requires deliberate policy intervention, Venkatram argued.

Regional Competition Intensifies

Deloitte India's push comes as other Asian economies move aggressively to capture AI-related investment. Singapore has positioned itself as a regional hub for AI research and development, offering generous research grants and streamlined visa processes for technology workers. Malaysia launched its National AI Roadmap last year, targeting specific sectors including healthcare, agriculture, and financial services. China continues to pour resources into AI, despite geopolitical headwinds that complicate some international partnerships.

For India, the competitive pressure is real. If the country fails to build a robust AI ecosystem within the next few years, multinational firms seeking to establish or expand Asian operations will likely choose locations with stronger infrastructure and clearer regulations. Venkatram framed this as an economic security issue as much as a technology question. "Countries that lead in AI over the next decade will set the standards and capture the value," he said. "Those that follow will be dependent on others for the tools their economies need."

What Happens Next

The Indian government's response to calls like Deloitte India's will become clearer in the coming months. The national AI strategy is expected to be released before the end of the current parliamentary session, and industry groups are pushing for specific commitments on funding and regulatory timelines. Meanwhile, the private sector continues to make its own calculations. Major technology firms, including several based in the United States and Europe, are watching India's policy environment closely before committing to larger AI-related investments in the country.

Whether India can close the gap with regional leaders will depend on whether the urgency expressed at events like this one translates into concrete action. Venkatram left the gathering in New Delhi with a clear message: the time for discussion has passed. The next 18 months will determine whether India becomes a significant AI player or remains a large market where others supply the technology it needs.