Zerodha founder and CEO Nithin Kamath isn't mincing words — India is falling behind China in tech and AI innovation, and the reasons go far beyond funding. "In the 1960s-1970s, India and China had roughly the same per capita GDP. They started their reforms in the 1980s, and by 1990, they had overtaken our per capita GDP," Kamath said in a post on Wednesday. "Say what you will about the differences in our worldviews and economic models, but their scientific and technological progress is undeniable across disciplines—DeepSeek is just the latest example."
China’s latest AI breakthrough, DeepSeek, has outperformed OpenAI models, topped the iOS App Store, and displaced Meta in the open-source AI space—all while supposedly costing just $6 million to train. The success has forced Indian tech leaders to confront a difficult question: Why isn’t India leading in AI?
Kamath shared his perspective: "I think the problem that has always plagued India is short-termism. Problems are typically addressed through a patchwork or the Jugaad mentality. This is true when it comes to business, politics, regulatory approaches, etc. Many problems that require focused long-term thinking instead get band-aid fixes."
Tech founders in India are increasingly asking whether the problem is the lack of funding, lack of bold investors, or absence of deep-tech startups. Kamath points to something deeper. "For example, you can’t just buy GPUs and expect Indians to create groundbreaking AI applications. Without the right talent and an enabling ecosystem that facilitates innovation, all the GPUs in the world will be pointless," he explained.
Kamath argues that India doesn’t provide the right environment for researchers, which is why the best talent moves to the US. "We need to seriously start building our research capabilities. While India does produce great researchers, we don’t seem to offer a conducive environment for them, which is why the majority of them go to the US," he said.
He stressed that research takes time. "Again, this is not something that will show results instantly. In the case of China, it was 2 decades at the bare minimum focusing just on research. If we start focusing on building our research and scientific capabilities, we will hopefully see results in 5 to 10 years."
With AI set to reshape the world, Kamath warned, "Being mediocre won't be an option."