Indian digital content creators warned of potential return of Chinese companies by Bernstein
The global financial services firm, Bernstein, has published a report titled 'OpenAI, Perplexity's India push -- a wake-up call for Indian AI', highlighting the significant issue of US tech dominance in India. The report, dated September 4, 2025, sheds light on the current state of India's digital landscape and offers suggestions for fostering a stronger homegrown tech ecosystem.
According to the report, every major digital platform powering India – search, messaging, social media, and commerce – is already under US control. This dominance, coupled with the absence of a strong homegrown ecosystem, leaves India with little leverage to curb foreign influence in its traditional digital sectors.
The report also notes that most talent capable of building tech platforms in India prefers to work for US firms. This trend, combined with the fact that India's AI investments are significantly lower than those of the US and China, even behind some smaller economies, presents a challenge for India in building its own indigenous AI solutions.
The report further discusses the impact of US tariffs on the global fertiliser market and suggests that India should prioritise long-term national interests over short-term excitement in dealing with US tech dominance.
In an interesting turn of events, the report wonders if a Chinese offering like DeepSeek could emerge in the future, as Foreign Large Language Models (LLMs) have made inroads into India. This speculation comes at a time when the global financial services firm has observed an improvement in India-China relations.
The report proposes that if Chinese firms re-enter the Indian market, it will further erode the digital space for Indian players. To counter this, the report suggests implementing bold rules such as requiring a minimum 51% public Indian ownership to capture a fair share of AI's value creation.
The report also proposes that India can continue with Data Protection measures that will warrant data localisation for global tech giants, forcing them to move onshore and set up India offices and data centres. This move could potentially level the playing field and provide opportunities for homegrown tech companies.
However, the report sets a sobering tone by stating that the dominance of foreign tech in India and the absence of a strong homegrown ecosystem leave India with little leverage to curb foreign influence. The report warns that India risks being reduced to a mere digital marketplace, not a creator, due to the predatory capital and import dependency for digital hardware.
It is important to note that the report does not provide any specific Nifty 50 or Sensex predictions for the week 08 Sep'25 to 12 Sep'25.
The report concludes by suggesting that major Chinese technology companies like Huawei, Xiaomi, and possibly others could regain access to Indian consumers following improvements in Indo-Chinese relations, as indicated by resumed exports of critical components like rare earth magnets and easing trade tensions in 2025. The report urges India to consider these factors and take bold steps to protect its digital interests.
