Centre seeks proposals from states for setting up of AI centres
ET Bureau January 14, 2026 11:38 PM
Synopsis

MeitY is urging state governments to submit proposals for establishing AI centers of excellence to bolster India's leadership in the Global South. This initiative, part of the ₹10,371.92 crore IndiaAI Mission, aims to transform R&D and benefit startups by expanding computing infrastructure and fostering inclusive AI deployment.

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The Ministry of Electronics & IT (MeitY) has asked state governments to come up with proposals for establishing centres of excellence for artificial intelligence (AI), as a part of efforts to strengthen the country's leadership in the Global South.

"We have said that we will set up these AI centers of excellence across the country. So we have asked states to come up with their proposals so that we can release funds for them," S Krishnan, secretary, Ministry of Electronics & IT (MeitY) told ET.

Further, the top official said that the fund utilization is an ongoing process.


"Most of it (fund) is meant for AI computing that has been provided. So, we are releasing funds as we go along." Krishnan said.

In March last year, the Union Cabinet, headed by Prime Minister Narendra Modi approved the IndiaAI Mission, with a budget outlay of ₹10,371.92 crore over five years. With the rapid expansion of the country’s computing infrastructure, the initiative is aimed towards making India a Global South leader in AI.

Setting up of centres of excellence (CoE) for AI in multiple states is expected to transform the research and development (R&D) activities with startups directly benefiting from the burgeoning infrastructure.

The government statistics reveals that India has close to 1.8 lakh startups, with nearly 89% of new startups launched in 2024, using AI as a part of their product or solution portfolio.

The government sought proposals for putting up sector-specific centres in multiple states that can align with the IndiaAI Mission, facilitating inclusive AI deployment, foundational models, and entrepreneurship.

Krishnan said that the AI-led activities are picking up in India in tandem with the developments worldwide.

In October 2024, the government had separately set up three centres at IIT Delhi, IIT Ropar, and IIT Kanpur, with an expenditure of Rs 990-crore, as a part of the Union Budget 2023-24 allocation.

In a bid to meet the rising requirement, the ministry has also shifted from a tender-based process to the empanelment system.

"There will be other demands which will keep coming up and we will keep allocating. It is like a marketplace," the official added.

Currently, India has a 38,000 graphics processing unit (GPU) capacity, and through the ongoing third phase of the tender, the ministry is expected to add 3,850 more units.

These processors are available at a subsidized rate of ₹65 per hour.

Experts say that AI could add $1.7 trillion to India’s economy by 2035.

Some of the industry verticals such as automotive, retail, banking, healthcare, and financial services and insurance are leading in AI adoption, contributing nearly 60 percent of the AI’s total value.
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