Industries adopting AI to play a big role in India becoming 3rd largest economy, says FM Nirmala Sitharaman
Industries which have adopted artificial intelligence will be instrumental in making India the third-largest economy in the world, Finance Minister Nirmala Sitharaman said on Thursday, adding that productivity gains are faster when technology is adopted.
'The kind of industries which are going to play a big role in speeding up India getting to the third position will largely depend on those which adopted AI. So, there is no 'India' industry or 'Bharat' industry, meaning new-age industry versus the traditional, old-fashioned industry,' the Finance Minister said in response to a question at a discussion with students of University of Delhi at the Institute of Economic Growth.
India, currently the fifth-largest economy in the world when the GDP is measured in terms of current prices, is projected by the International Monetary Fund to become larger than Japan in the current fiscal ending March 2026.
The Finance Minister noted that productivity has not risen in India as rapidly as the ambition to grow fast. To change that trend, attempts have been made to identify sectors where funds can be invested by both the government as well as the private sector. The adoption of technology, Sitharaman said, was another factor. 'Technology being adopted could have multiplied your productivity faster than otherwise… Today, the rapidity with which some sectors are showing drastic change, I find the feature defining that drastic change is the adoption of technology,' she said.
Cost of climate transition
In response to a question on the transition to green energy, the Finance Minister said that while the issue has not changed in the last couple of years, the answer has become more difficult as many countries have understood the 'true cost of having to move from fossil fuel to renewable'. At the same time, some countries decided to impose tariffs on 'not-so-green products', the Finance Minister added, putting pressure on countries such as India who were already making the move to renewable sources of energy.
'So, if you were to ask me what are you doing about it, we are only making sure that globally we are negotiating to make sure that the global multilateral institutions will have that kind of leverage with their funds so that they can fund for common cause public goods,' Sitharaman said, pointing to NK Singh – Chairman of the 15th Finance Commission and the moderator for the session — and citing the expert group he co-chaired with former US Treasury Secretary Larry Summers during India's G20 presidency to suggest ways to strengthen multilateral developments so that they can meet global challenges such as climate change.
Singh, in his opening remarks, said India was at a 'unique moment' as it sought to balance security and development. 'Is it possible to be a self-subsistence, secure economy and yet seek high rates of economic development? What about its economic and fiscal consequences?' Singh said.
Defence tech integration
Commenting on India's defence capabilities, the Finance Minister said the 'mastery in technology integration' across the three arms of defence forces shown by India during Operation Sindoor could be studied by defence experts.
'Your systems in defence today are able to integrate equipments coming in from elsewhere. They can talk to our operational systems and our operational systems are capable of functioning on their own and between the three forces: air force, army, and navy. There is that interoperability.'
On defence production, Sitharaman – who has previously served as the defence minister – said that while India does import certain components, 'largely you are producing that which you need for your precision operations'.
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Also read: What Ashoka University founder wrote to ex-student on the Ali Khan Mahmudabad issue An arrest and a message In May 2025, Professor Ali Khan Mahmudabad, Chair of the Political Science Department, was arrested over a Facebook post that raised critical questions about militaristic nationalism in the wake of the terrorist attack in Pahalgam. It is worth noting that Prof. Mahmudabad did not speak against India's military response to Pakistan. Rather, he questioned the political framing of the event and voiced concerns on behalf of Indian Muslims. The questions were political because he is a political scientist studying those very groups. His detention has sparked outrage among hundreds of students and alumni, but Ashoka University has remained silent, refusing to publicly support him. Mr. Sanjeev Bikhchandani, one of the key founders of Ashoka, recently responded to an alumnus who had criticized the institution's silence following the arrest of Professor Ali Khan Mahmudabad. 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And in the absence of any meaningful affirmative action, universities everywhere largely recycle elites rather than produce them from scratch. For the most part, this has also been true at Ashoka. But exceptions are truly exceptional, and I affirm this by experience. Dichotomy In liberal societies governed by liberal regimes, social progressivism often becomes the etiquette of the elite. Since World War II, many liberal norms have globalized. Whether it's Sciences Po in France, Ashoka in India, or Harvard in the U.S., these institutions produce graduates who are largely ideologically aligned—often embracing values like diversity, inclusion, and civic responsibility. And when liberal regimes come under challenge, universities with contrasting or critical scholarship often bear the brunt. Historical moments may sometimes bring this tension to the fore and sometimes not, but such is the pattern. 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He is being asked about moral courage, about the university's role in moments of political repression—and instead he answers a question that was not asked: whether all liberal arts institutions are, by definition, activist. What is the syllogism here? Even if activism and liberal arts are not synonymous, they are hardly unrelated. Liberal arts education—by its very structure—cultivates critical thinking, dissent, and moral inquiry. So yes, activism may not be mandatory, but it is certainly not alien to the tradition. 'The fundamental point I am making,' he continues, 'is that activism at Ashoka is a choice and it does not go with the territory. You can be a great liberal arts university and not be activist. Anyone who tells you otherwise is a liar.' Mr. Bikhchandani notably overlays his organizational analysis with that of Info Edge, the multi-sector conglomerate he founded. Since he speaks from life experience, and the experience of being a 'founder' of organizations in general, there may well be some hard-earned wisdom in his words. But drawing direct parallels between Ashoka University's obligations and those of corporations like Info Edge is a flawed analogy. Educational institutions have fundamentally different missions: they exist to foster critical inquiry, intellectual risk-taking, and societal engagement objectives that diverge sharply from corporate priorities like brand protection and regulatory compliance. Priorities may just converge on some organizational issues but Info Edge is not a university, let alone a private, liberal arts university. This is a categorical error of nearly all orders. He then continues: 'In the private sector, we generally stay away from what are termed as 'Politically Exposed Persons.' Should Ashoka have such a policy?' But the concept of 'Politically Exposed Persons' originates from financial regulation, intended to flag risks of corruption and bribery. It is not meant to refer to scholars whose entire academic compendium is devoted to the study of politics—like Professor Mahmudabad, a political scientist whose research focuses on Indian Muslims and the workings of state power. Do the founders of Ashoka not see the trap they are setting for scholars? Political science, and many other disciplines within the liberal arts, require engaging with contentious political realities. To penalize and abandon scholars for doing so is to undermine liberal arts. Ashoka University, the Enterprise I imagine the pressure to represent a university must be immense. University presidents today are being called upon to be braver—to act as a firewall between the wrath of unfavorable governments and the integrity of elite educational institutions. Obsequious behavior at the mere hint of political controversy, therefore, has not been well received by academic colleagues, alumni and students. Ramachandra Guha, who I first read at Ashoka, tweeted upon a controversy over an exit: 'In its journey thus far, Ashoka University had shown much promise. They may have frittered all that away by the spinelessness of their trustees, who have chosen to crawl when asked to bend.' And yet, given the disproportionately higher pressure placed on a small number of trustees, how can Ashoka respond tactfully and still ensure its survival? That is the real question many have asked, and few may have answered. Here, we must meet Mr. Bikhchandani with empathy, and offer him paths that do not demand heroism from him, but do insist on principle. At Harvard, I had the privilege of being Professor Steven Pinker's Teaching Fellow—an extraordinary opportunity to help teach his course Rationality, named after his bestselling book. That semester, in the wake of student protests, Dr. Pinker proposed a new policy emphasizing time, place, and manner restrictions on demonstrations. It was one of those issues I changed my mind about due to considerations of tact and respectability. It is a middle path between what many would call 'activism' and the enterprise of the university. The proposed policies were incorporated by Harvard in 2025, along with an institutional decision to not weigh in on controversial public policy matters. This, perhaps, is an option—tactful, principled, and always available to an institution like Ashoka University. Perhaps it can meet the 'activists' in the middle. Nonetheless, it is both imperative and tactful for Ashoka University The Enterprise to not hire political scientists who face ire for studying politics. Funding challenges are understandable. I have always acknowledged the quandaries and pressures that founders face. In his reply, Mr. Bikhchandani understandably emphasizes his frustrations. It takes immense effort to raise funds for a university. Critics may not fully grasp how difficult that work is and I, too, am far from ever having done it. But still, one must ask: how much money is really traded off when a few academics stand by principle? Is there some optimum point where ideals can safely be compromised? And doesn't political controversy, too, come at the cost of credibility, just a different kind of expense? Abandonment I wish to convey to Mr. Bikhchandani and the founders of Ashoka: what you have created is original, valuable, and deeply needed. Many, like me, are invested in its survival and growth. As Professor Amita Baviskar wrote of the founders and trustees: 'They failed to appreciate that the institution they started had acquired a life larger than their fears.' To articulate Ashoka's originality, one only needs to look at its name—drawn from Ashoka the Great, the Mauryan ruler. After witnessing the devastation of war, Emperor Ashoka turned toward non-violence, tolerance, and the pursuit of knowledge. A university bearing his name ought to have imagined itself as embodying that same spirit of inquiry, moral reckoning, and commitment to the greater good. My year at Ashoka was, in every way, exceptional—intellectually rigorous, emotionally expansive, and, at times, almost caricaturally enjoyable. What we are witnessing now is willful abandonment. And so I put the word abandonment next to the university I once graduated from—not because I abandoned it, but because it abandoned itself. It has strayed too far from the ideals it once aspired to, creating in the process an awkward, uncertain middle, neither brave enough to protect its scholars, nor honest enough to say it won't. In saying that Ashoka has abandoned itself, perhaps I am indulging in activism. I don't know if it was liberal arts or activism—those two things that are not joined at the hip. But I do know there was once a place where I studied Ambedkar, Hegel, Keynes, de Beauvoir, Gandhi, and Arendt. I made friends for life in a year that felt magical. I did not abandon it. It abandoned itself. This article was originally published on Kartikeya Bhatotia's Substack. The author is an alumnus of Ashoka University who writes on public policy. He tweets @bhatoti. Views are personal.
