Whalesbook
West Bengal Trails India on AI Adoption
The current AI adoption gap in West Bengal signals a major economic difference compared to India's growing technology hubs. While states like Karnataka, Maharashtra, and Telangana are aggressively integrating AI and attracting significant investment, West Bengal appears to be facing slow progress. This lag risks a lasting competitive disadvantage, mirroring missed opportunities during the earlier IT revolution.
Karnataka, for example, attracted $4,496 million in FDI equity inflows by December 2024, driven by its strong IT and services sectors. Maharashtra is the nation's top FDI recipient, securing 31% of total FDI equity. Bengaluru, India's Silicon Valley, is home to many Fortune 500 R&D centers and leads in registered tech startups. In contrast, West Bengal's real Gross State Domestic Product (GSDP) grew at an average of 4.3% between 2012-13 and 2021-22, below the national average of 5.6%. Its share in the national GDP has fallen from 6.8% in 1990-91 to 5.8% in 2021-22, with per capita income remaining 20% below the national average. Historically, West Bengal's per capita income, once above the national average, has fallen to 14th place. This economic underperformance suggests underlying problems in adopting new technologies.
Key States Drive AI Growth
AI adoption and investment are heavily concentrated in India, with Bengaluru, Hyderabad, Delhi, and Chennai leading as AI hubs. These cities benefit from targeted state policies and significant investment. Karnataka has invested ₹28 crore in its AI Center of Excellence to boost development and projects 350,000 AI jobs by 2029. Gujarat is building its AI ecosystem with ₹50-200 crore allocated for AI-driven industries and an AI Center of Excellence. Telangana plans to use AI for services for over 10 million citizens by 2027.
These proactive efforts contrast sharply with West Bengal, where AI adoption is sporadic and lacks a clear strategy. Essential funding for startup growth largely goes to major cities, with Bengaluru alone attracting 35-40% of all venture capital investment, while smaller cities receive less than 10%. This concentration puts states not nurturing AI ecosystems at a disadvantage for talent and innovation.
National AI Goals Face State Hurdles
India aims to be a global AI leader, using the technology for inclusive growth and economic change. The National AI Strategy plans for computing power, data, skills, and a strong startup environment. The Indian IT sector is expected to grow strongly, with total IT spending reaching $176.3 billion in 2026, largely due to AI infrastructure. India is also a major global market for AI platforms, with ChatGPT alone recording 100 million weekly active users, making it the second-largest market after the US.
However, national ambitions face challenges in spreading evenly across states. While AI services are a growth area for top Indian IT firms like TCS and Infosys, some have issued cautious forecasts due to economic pressures and slower client spending. The global AI market is dynamic, with intense competition among major players like OpenAI, Google (Gemini), and Anthropic (Claude). This requires all regions to be agile and integrate AI quickly to benefit from the boom.
Inertia and Weaknesses Hamper West Bengal
West Bengal's main risk isn't opposition to AI, but widespread inertia and a lack of a unified strategy. The current challenge is delaying action and letting opportunities slip away. The state's historical economic trajectory shows a consistent struggle to keep pace with national growth, particularly since the 1990s. Its growth has often trailed the all-India average, pointing to underlying structural weaknesses.
Economic activity concentrated in Kolkata and its surroundings worsens this, widening income gaps and potentially weakening the broader ecosystem elsewhere in the state. This lack of distributed growth and the state's relatively lower attractiveness for FDI compared to states like Maharashtra and Karnataka suggests a weaker ability to build new tech ecosystems. Without targeted actions to create urgency and coordinated efforts, West Bengal risks falling further behind more dynamic Indian states.
Can West Bengal Catch Up?
While the chance for latecomers to benefit from the AI revolution is shrinking, it's not gone. India's fast digital transformation and evolving AI technologies offer latecomers a chance to catch up with decisive action. Small steps won't be enough.
The proposed creation of a 'Deep State' collaborative think tank of administrators, business leaders, entrepreneurs, and innovators is proposed as a radical way to boost AI adoption. This body would need to find high-impact uses, build partnerships, and speed up growth. Success depends on overcoming the state's deep inertia and showing a clear commitment to integrating AI into its economy. Failing to do so will likely widen the economic gap between West Bengal and its more progressive Indian counterparts.