AI in India – Defence, Smart Cities, and MSMEs

There are several sectors and domains where the time is right in India for AI and other advanced tech-based solutions.
Keywords: AI, Technology, Solution, Potential, MSME, Defence, Smart, Services, Diversity
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It is easy for anyone to speak, but difficult to execute what has been spoken. [Shri Thiruvalluvar, Kural No. 664, Thirukkural]

Recent GDP data is encouraging, with 8.2 per cent growth rate, India continues to be one of the best-performing economies in the world. 

At the same time, the successful rocket launch (with a semi-cryogenic 3D-printed engine) by a young space startup reflects the fact that public-private sector cooperation has started to yield positive results. 

‘Timing’ is a vital factor in business and technology.

When we think about timing, the first technology that comes to mind is Virtual Reality (VR). Kids watching Pro Vision’s advertisements won’t believe that, in many ways, VR as a tool is the predecessor of everything (in tech) that we see around. It has been there for more than 40 years, since the days of Jaron Lanier’s V.P.L. experiments, which resulted in VR Glove, Eye Phone and DataSuit (a full-body outfit with sensors) kind of products.

In its initial phase, despite numerous efforts, VR failed to achieve the expected level of success. There was a time in the 1980s when, despite a full demo, people often found it difficult to grasp or relate to the idea behind Virtual Reality products. The experiences which they produced appeared weird to their senses and habits. Result? None of those tools could gain the expected public acceptance  and they largely remained outside the market

For these technologies to go mainstream, more than high-speed internet, data, and technology enhancements, a ‘shift’ in behavioural patterns and human habits was needed, and that was missing at that time. Later, with the penetration of- the internet, smartphones, and social media, that shift finally occurred! Today, a 60-second commercial is enough to convey the whole message, to users of all ages, from a 5-year-old kid to an 80-year-old grandma. Nothing is unusual anymore! 

So, VR/AR products have finally started making their way, and we can see a glimpse of their acceptance in the Indian market as well. 

That’s the importance of ‘timing’ in the success of an idea or product!

Something similar is the case with India’s digitalisation drive. When it started a decade back, some crucial moves related to sectors like Smart Cities, Defence and MSMEs could not yield the desired results.  Like VR, the timing of those moves was not perfect!

It took nearly ten years of economic, infrastructural, social, and behavioural transformation to create the right environment.

India’s Handshake with Technology

India is going through a User-based transformation in Technology, and at the moment, we are importing everything to make this transformation a successful ‘Use Case’, before the world. 

Today, India has connectivity and digital infrastructure, almost seamless power supply, a decent talent pool and a rising neo-middle class (even at the village level) ready to embrace all sorts of tech products. 

In 2024, all missed opportunities/sectors of the last decade seem prepared for the next wave of Technology – AI, Deep Learning, High-Performance Computing, GPU-driven Accelerated computing, etc. 

We can say that this is the perfect ‘time’ for a technology business to thrive in India. 

But at the same time, only being here is not enough!

In this era of Transformation, as things are in the process of taking shape, it is natural that the proportion of ‘noise’ is higher than usual.

So, catching the signal from the noise can be a challenge.

India is a complex and diverse country. Through the required reforms, the government has made the entry of the businesses/investors smoother and faster. 

Nevertheless from entry to execution, there is a long road to cross, and here an understanding of the psychology, philosophy and approach of India, its market, socio-economic structure, political atmosphere and the technology ecosystem is crucial! 

Untapped Opportunities/Sectors

Every sector that demands Data, Connectivity, Simulation, Training, Visualisation, Precision, and ‘Intelligence,’ is a potential AI and machine learning opportunity.

To explore/define and leverage these untapped opportunities/sectors, a combination of conventional and non-conventional methods will be needed!

Let’s take a look at some of these sectors.

Defence Sector 

The Indian defence sector is huge, both in numbers and volume.

At this moment, the country is in the process of exploring, defining and adapting AI-based products and ideas. By convention, this sector, its activities and its stakeholders are restricted and there is a limited scope for conventional improvisations. Only a non-conventional approach, with a sense of the larger objetives, psychology, philosophy, and methodologies and its key stakeholders, can deliver some concrete results!

The user base of this sector is diverse, from startups to MSMEs to Heavy Industry, spanning geographically and culturally diverse corners of the country. 

There are two defence industrial corridors: one in Uttar Pradesh and the other in Tamil Nadu. 

Government has a focus on building AI-enabled autonomous weapons and VR/AR-based solutions, with an emphasis on the following research areas: AI Platform Automation, Autonomous/Unmanned/Robotics systems, Block Chain-based Automation, Command, Control, Communication, Computer & Intelligence, Surveillance & Reconnaissance, Cyber Security, Human Behavioural Analysis, Intelligent Monitoring Systems, Lethal Autonomous Weapon Systems, Logistics and Supply Chain Management, Operational Data Analytics, Manufacturing and Maintenance, Simulators/Test Equipment and speech/voice analysis using Natural Language Processing.

Over the last few years, the sector has witnessed some reforms at the level of organisation, operation, policy and EODB parameters. The emphasis is on enhancing the indigenous elements in the defence supply chain. 

The transformation has opened up new avenues for private sector participation and public-private partnership, with enormous opportunities to dive in!

Smart Cities

As in VR, in the underperformance of the Smart Cities Mission, the ‘Timing’  was a factor. 

India’s Smart City Mission started in 2015 with a target to achieve 100 Smart cities on a mission mode. It was a transformative move from the Indian government to develop the cities that provide core infrastructure, clean energy, a sustainable environment, and Ease of Living through the applications of Smart and Advanced tech solutions and for the success of that vision, both Highways and I-ways were needed. The Smart Cities mission attracted good investment and a Big Infrastructure push. 

The mission was promoted on a large scale, but to turn those moves into a success, over and above investment and infrastructure, a shift in the behavioural patterns of the people was needed.  Initially, people were not prepared to accept and adapt what was being offered to them, and the word ‘smart’ itself was not a part of their routine vocabulary. 

Today, a decade  later, after the success of Digital Public Infrastructure (DPI) and Digital Governance, we can say that this is the right time to revive and reimagine the Smart Cities Mission with a fresh approach. And here, AI can play a part!

Be it managing movement/transit of people/goods and services or building safer buildings, developing public spaces, or efficient utilisation of public amenities (water, electricity, etc.), waste management and recycling, all demand advanced AI-driven scalable solutions at every stage, from planning to execution to monitoring. 

There was a time when even home appliances used to be a BIG thing for the average household but nowadays the same people and income groups are leveraging multiple interconnected smart devices in their everyday tasks. It’s a huge change! Smart homes equipped with IoT devices, automation systems, and AI-powered assistants have a growing market in India (expected to reach US$6.5 bn in 2024). 

We can say that the Time to tap this opportunity has arrived.

MSME Sector

MSMEs are the backbone of the Indian economy. These MSMEs produce millions of jobs, billions of dollars of exports, and a contribution of approximately . 29% to India’s GDP. 

If there is one sector where AI-based solutions and their upskilling demand is enormous, it is the MSME sector. Hoerver the right time has not yet come! 

Due to their complexity and diversity, these MSMEs largely remained out of focus. To leverage business opportunities in this sector a non-conventional approach with lots of creative improvisations and a big promotional push will be required with an understanding of the psychology/philosophy and socio-economic dynamics of those million companies.

In India, the MSMEs are broadly divided into two categories: Manufacturing and Service Enterprises, and both have a thriving track record. 

The top ten states which together account for a share of 74 per cent of the total MSMEs in India are Uttar Pradesh, West Bengal, Tamil Nadu, Karnataka, Bihar, Andhra Pradesh, Gujarat, Rajasthan, and Madhya Pradesh.

Few people would know that there are, not only industry or state-specific MSMS but also hundreds of caste and communities-based industrial clusters that spread across India. 

The MSME sector of India is made up of hard-working and risk-taking entrepreneurs and their skilled teams but most of them have not yet explored the advantage of advanced tech solutions like IoT, AI, Robotics, industrial automation, precision tech, engineering simulation, accelerated and high-performance computing, etc. 

Although some moves have been taken in this direction by the government and research institutions in the context of global developments, it seems that India has only scratched the surface! 

Still, a lot needs to be done.

India, being a young country, harnesses the power of its youth for the MSMEs too. Once these young minds start enjoying a taste of these Advanced Technologies and Tools, they will learn to integrate these capabilities into their commercial cycles and start leveraging them for profit and returns and will thus get empowered to contribute more effectively in the larger market and economy.  

And we must remember that for an MSME entrepreneur tools and tech are a part of routine life. 

There are several other sectors and domains where the time is right in India for AI and other advanced tech-based solutions.

The need is to throw a spotlight on their potential!

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Devsena Mishra

Devsena Mishra promotes advanced technologies, startup ecosystems and Indian government’s business and technology related initiatives like Digital India, Make in India and Startup India etc. through her portals, articles, videos, and books.

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