AI update
India is rapidly positioning itself as a global leader in Artificial Intelligence (AI), with projections indicating that AI adoption across industries could contribute between $500–600 billion to the country’s GDP by 2035. Globally, AI is expected to add $17–26 trillion to the economy, and India is poised to harness this transformative technology as a strategic lever for accelerated growth.
The government’s policy think-tank. Niti Aayog, has developed an AI vision roadmap that outlines a focused approach across four key sectors—financial services, pharmaceuticals, manufacturing, and automobiles—emphasising initiatives such as explainable credit systems, smart factory corridors, biotechnology parks, and real-time smart car infrastructure. Union Finance Minister Nirmala Sitharaman has advocated a ‘soft-touch’ regulatory approach, while also acknowledging the need for AI-driven upskilling to mitigate job displacement.
The upcoming AI Summit 2026 in New Delhi, to be inaugurated by Prime Minister Narendra Modi, will spotlight India’s commitment to responsible AI development. Ahead of the summit, the government is set to release a robust AI governance framework developed by the National Cyber and AI Centre. This framework introduces a structured taxonomy for AI risks, lifecycle controls, and assurance systems aligned with global standards, ensuring safety and accountability. With India projected to become one of the largest adopters and exporters of AI-enabled solutions, governance is rightly being positioned as a prerequisite for safe and scalable deployment.
Environment and sustainability update
India is accelerating its clean energy transition through strategic policy reforms and resource mobilisation, including the launch of its first national geothermal energy policy. This initiative places India among a growing number of countries exploring subterranean heat as a renewable energy source. The policy encourages joint ventures between geothermal developers and oil, gas, and mineral companies, and introduces incentives such as tax exemptions and viability gap funding. It also supports the repurposing of abandoned wells, with 381 hot springs identified across ten geothermal provinces as potential sites for development.
Simultaneously, India is pushing for domestic production of critical minerals essential for clean energy and advanced manufacturing. At the CII Mining Summit 2025, industry leaders highlighted the role of AI-driven exploration, private sector participation, and sustainability-focused reforms. Minerals like lithium, cobalt, and rare earths are central to India’s ambitions in electric vehicles, solar energy, and electronics, with the National Critical Minerals Mission aiming to reduce import dependence.
Looking ahead, experts forecast that renewables could comprise 13% of India’s energy mix by 2050 under a ‘green scenario’. Achieving this will require structural reforms, grid expansion, and robust state-level implementation. These developments underscore India’s commitment to building a resilient, low-carbon energy future.
Trade & policy update
UK-India Free Trade Agreement (FTA)
The UK Parliament’s International Agreements Committee has launched a call for evidence on the UK-India FTA, inviting stakeholders to share views by 14 October 2025. The inquiry will assess the FTA’s potential benefits and drawbacks for the UK, focusing on key sectors, bilateral relations, and the broader geopolitical context. This marks a significant step in shaping the final terms of the agreement and ensuring it aligns with national interests.
India-EU Trade Pact
Meanwhile, India and the European Union are progressing in their trade negotiations, with a particular emphasis on the automotive sector. The proposed agreement aims to eliminate tariffs on auto parts, which could enhance trade flows, introduce advanced technologies to India, and support the development of cleaner and more efficient vehicles, including electric and improved combustion engines.
Outlook
These developments reflect India’s growing role in global trade and its strategic push to modernise key industries through the adoption of AI and international collaboration. This trajectory not only strengthens India’s economic outlook but also creates fertile ground for increased foreign investment, innovation partnerships, and long-term growth opportunities across sectors.
Looking forward
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