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India just hosted global AI leaders for its flagship Delhi AI summit. We explain more in today’s deep dive.
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Macro
India solved one of the IMF's concerns by revamping data collection for CPI. There is a revised 2024 base along with changes in how CPI is calculated to better reflect modern India spending. GDP data will also have a base year of 2022-23 now.
Expect the yuan to extend its surge against the rupee from differing amounts of inflation.The Indian economy continues to inflate while China is experiencing deflation and a growth in capital inflows. The rupee will also face a gradual unwind of the RBI short-dollar book and the central bank will eventually have to build its FX reserves as well.
Equities
Reliance got a US general license to buy Venezuelan crude directly. In the past, Reliance used to import 25 percent of Venezuela’s total exports until its license was suspended in 2019. It also had a smaller license in 2024 which got canceled quickly.
Portfolio managers believe the sell-off in tech stocks, particularly Infosys and Tech Mahindra is overblown.Large cash piles should fund companies shifting business models with AI and the relatively young Indian workforce means companies can adapt much more quickly. Valuations are also at 10-year lows and firms still have resilient order flows.
Alts
Morgan Stanley asset management arm is creating an Indian continuation-vehicle for its existing $500 million (₹45.4 billion) fund. The continuation-vehicle is a way to continue investing and exit without using an IPO for its assets or creating mergers. Main investments include Omega Hospitals and RG Scientific Purposes.
Luxury suites were going for over $30,000 (₹2.7 million) per night for the AI summit in Delhi.In general, demand from travelers is pushing up prices across India and there has been double-digit revenue growth for India’s hotel industry in the last 3 years; the growth has been widespread and tier-2 and 3 cities are also benefitting right now.
Policy
India approved $40 billion (₹3.6 trillion) of defense deals with France including 114 jets and missiles. This is one of the largest airforce upgrades India has ever announced but is actually diminished compared to pre-US-India FTA discussions. A previous 2015 deal to buy 126 jets was cancelled for quality reasons.
Modi's farming ally has raised concerns about cheaper GM soybean oil and animal feed processed with GM corn. The government is trying to minimize concerns by emphasizing that sensitive agricultural products like dairy and poultry are being excluded by the deal. The BKS ally is sticking with Modi for now.
Bangladesh elected the Nationalist Party, a win for India and a setback for the student protests that rocked the country since 2024. The BNP is likely to rebuild ties with India which were fractured when previous Nationalist PM Hasina was ousted in 2024. It also has to worry about its $5.5 billion (₹498.9 billion) IMF program and growing ties with China.
The National Congress Party called for the resignation of Modi's oil minister in relation to Epstein ties.Puri had emails relating to arranging meetings in NYC but denied material, improper relations with the late financier. The Party also called on Modi to explain his trips to Israel in 2017 where he sought advice from Epstein.
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Delhi’s Flagship AI Summit Starts Up
The contrasting fortunes of artificial intelligence ventures in India were on display as the AI Summit in Delhi started up. Fractal Analytics fell 5 percent on its IPO debut even after raising $313 million (₹28.4 billion); right next door, a consortium led by Blackstone prepared a $600 million (₹54.4 billion) investment in cloud startup Neysa. The divergence highlights a broader tension shaping India’s AI economy, where private capital continues to chase infrastructure and compute while public markets remain cautious about near term profitability and crowded service models.
Hosted by the Indian government, the AI Summit aimed to highlight India’s start-up ecosystem and showcase it for global investment. Held on Monday, Feb 16th, the event hosted Microsoft president Brad Smith, ScaleAI co-founder Alexandr Wang, and other global leaders.
Other interesting developments from the summit was the introduction of sovereign AI models similar to DeepSeek as competitors to traditional American LLMs. Domestic efforts, including sovereign language systems from BharatGen and Sarvam AI, aim to close the gap by focusing on multilingual and voice driven use cases tailored to local demand. Advocates argue that without indigenous models India risks becoming dependent on foreign digital infrastructure even as adoption accelerates across business functions.
Adoption from AI is another topic, though Indian firms are moving slowly. Nearly half of the 200 firms surveyed by EY said they have AI live use cases and Agentic AI deployment but 95 percent of them allocate less than 20 percent of their IT budget to AI. Productivity gains and layoffs are still a time away. TCS is the only notable counterexample — cutting 3 percent of its global workforce — but most other firms like Air India and Cognizant are leveraging AI to scale.
The biggest takeaway from the summit so far has been the global desire to implement more AI systems in India. There have been $70 billion (₹6.3 trillion) of investment deals announced prior to the conference, a number that will surely grow. Around 15 heads of state and 100+ tech executives are all in attendance. The BJP’s predictions are that over 200 new, homegrown AI models aimed at different industries will be announced with a cumulative total of $140 billion (₹12.7 trillion) in AI investments.
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Written by Yash Tibrewal. Edited by Shreyas Sinha.
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Disclaimer: This is not financial advice or recommendation for any investment. The Content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice.