NASSCOM Urges Government to Review AI Public Procurement Processes
India's IT industry body, NASSCOM, has asked the government to review its public procurement processes to favor domestic AI models over global tech giants.
NASSCOM, the National Association of Software and Service Companies in India, has urged the government to review its public procurement processes. The aim is to provide preferential treatment to domestic AI foundation models over global Big Tech companies such as Google and Meta.
The call follows a September 2026 report from the parliamentary Committee on External Affairs. The report highlighted concerns that India's own AI developers, like Sarvam AI, face challenges competing with international giants due to lowest-bidder tender processes that disadvantage local innovation, despite government investments in the sector.
NASSCOM drew a comparison to China's approach, where the government has reportedly created a protected domestic market for its AI models to foster growth. The industry body suggests India needs similar measures to ensure its AI startups can mature and compete effectively without facing constant price competition from entities with vastly larger resources.
The parliamentary committee acknowledged the structural bottleneck highlighted by NASSCOM, noting that India's success in AI depends on strategic clarity, adoption pathways, and the pace of development, not just resources and talent. The committee stressed that the opportunity AI presents for India's development must be pursued deliberately, not left to chance.