From User Base to Power Base: India’s AI Crossroads

OpenAI’s decision to establish its first Indian office in New Delhi and roll out ChatGPT Go at INR 399 a month is more than a symbolic gesture. It signals that India is no longer a peripheral market but a center stage in the global race for AI adoption. With the country now being the second largest market for OpenAI, and ranking among the top five developer markets, India has become indispensable to OpenAI’s future.

On the surface, the story is one of accessibility. Advanced AI tools - once priced out of reach - are now within the grasp of millions. UPI integration, Indic language support, and dedicated education features show how quickly global firms are tailoring their products to Indian realities.

But beneath the surface, the strategy raises deeper questions: will India become a hub of AI creation, or remain primarily a consumer base for global firms?

Beyond Accessibility: Strategic Intent

The expansion is happening fast. OpenAI has incorporated a legal entity, begun hiring local talent, and announced an Education Summit and Developer Day. Its OpenAI Academy, run in partnership with the government, ties neatly into the IndiaAI Mission. These moves aren’t just about growth - they’re about embedding OpenAI into India’s policy and innovation landscape for the long term.

The strategic bet is clear: India offers the largest youth population in the world, a thriving developer community, and a digitally savvy, price-sensitive consumer base. By investing early, OpenAI positions itself to shape habits, talent, and ecosystems for the next decade.

A Crowded, High-Stakes Market

India, however, is no open field. Google’s Gemini, Microsoft’s Copilot, Perplexity’s Airtel partnership, and xAI’s SuperGrok have all launched aggressively here, often at heavily discounted rates. A price war is already underway, and for users this means unprecedented access to frontier AI at some of the lowest prices globally.

But for India’s homegrown startups - Krutrim, Sarvam AI, BharatGPT, and others - the challenge is stark. Building foundational models is capital-intensive and competing with global firms that can subsidize prices while leveraging global revenues is a steep climb. Collaboration, niches, or domain-specific focus may become survival strategies.

The Quiet Risk: Dependence Over Innovation

This is where the concern lies. India is being positioned as a proving ground for AI adoption, but the long-term risk is dependency. By locking in students, developers, and enterprises early, global firms can capture not just market share but also talent pipelines and data flows.

If India is primarily a consumer market for foreign-built models, the promise of “AI for India, with India” could be undercut. The danger is not of a dramatic takeover, but of a gradual hollowing out of domestic capacity - a future where Indian innovation is reduced to applications built on top of global platforms, rather than original contributions at the foundational level.

Policy Choices Ahead

India has been clear about its ambitions through the IndiaAI Mission, framing AI as both a growth driver and a tool for inclusion. But intent must now translate into sharper instruments: patient capital for domestic AI model development, public procurement preferences for India-first models, Guardrails against predatory pricing.

The EU has moved decisively on digital sovereignty. The US is investing billions in chips and research hubs. China has ringfenced its AI ecosystem entirely. India, too, must decide whether to play only as an open market, or to put weight behind cultivating its own champions.

India at the Crossroads

The benefits of OpenAI’s entry are real: wider access, faster adoption, more jobs, and sharper skills. The risks are equally real: overdependence on global platforms and erosion of domestic innovation capacity.

India’s choice is not whether to welcome global AI players - that is already happening. The choice is whether to complement that with a serious push for indigenous capacity, ensuring the country is not just the world’s largest AI user base, but also a co-author of the technologies that will shape this century.

Bottom line: The arrival of OpenAI’s office in New Delhi is a milestone. But the milestone should mark the beginning of India’s journey as a creator in AI, not the endpoint of its role as a consumer.