Global financial services firm Bernstein has warned that Chinese tech companies could soon regain access to the Indian digital market as relations between India and China show signs of improvement.

Bernstein Report Highlights Risks for Indian Creators

In its latest report titled “OpenAI, Perplexity’s India Push — A Wake-Up Call for Indian AI” (dated September 4), Bernstein cautioned that the re-entry of Chinese firms would shrink the already limited space for Indian digital creators and startups.

The report stressed that predatory capital and import dependency on digital hardware could push India into becoming “a digital marketplace, not a creator.”

Foreign Tech Dominance in India

Bernstein highlighted the strong dominance of US tech companies in India, particularly in the artificial intelligence (AI) sector. With aggressive pricing strategies, global giants are making it harder for Indian firms to scale up.

“Every major digital platform in India — from search and social media to messaging and e-commerce — is already under US control,” the report noted.

Lessons From TikTok Ban

Referring to India’s ban on Chinese app TikTok, Bernstein pointed out that it wasn’t an Indian alternative that replaced it but Instagram, a US-based platform, which gained millions of users. This shows the absence of strong homegrown platforms in the Indian ecosystem.

India’s AI Investments Lagging

The report also criticized the low funding for indigenous AI projects in India compared to the US and China. Even smaller economies, it said, are investing more aggressively in AI than India.

Bernstein suggested that India needs greater investments and regulatory support to strengthen its own digital platforms.

Policy Suggestions for India

To counter foreign dominance, Bernstein recommended bold steps, including:

• Mandating at least 51% Indian ownership in key AI platforms.

• Enforcing data protection and localization policies to ensure global tech firms set up data centres in India.

• Supporting homegrown AI startups with funding and infrastructure.

The report urged Indian policymakers to focus on long-term national interests rather than short-term excitement over free or cheap foreign platforms.