Experts at the India AI Impact Summit 2026 warned that market concentration in artificial intelligence could undermine India’s digital sovereignty. While domestic startups excel in sector-specific applications, upstream layers like data and compute remain dominated by global players. Regulators, including the Competition Commission of India (CCI), are exploring frameworks to ensure fair competition.
India’s AI ecosystem is gaining global recognition, but experts caution that market concentration poses a serious risk. At the India AI Impact Summit 2026, analysts noted that while Indian startups are strong in downstream applications such as fine-tuning AI models for healthcare, finance, and education the upstream layers of data access, compute power, and talent remain controlled by a handful of global giants.
The Competition Commission of India (CCI) has also flagged concerns, warning that AI-driven markets could lead to algorithmic collusion, ecosystem lock-ins, and reduced competition. To address these challenges, CCI is setting up a digital markets division to monitor AI-related competition issues and ensure consumer protection.
Experts argue that without proactive regulation and investment in domestic infrastructure, India risks dependency on external players, limiting innovation and sovereignty in its AI journey.
Key Highlights
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Summit Warning: Market concentration could harm India’s AI ecosystem.
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Domestic Strengths: Startups excel in downstream applications.
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Global Dominance: Upstream layers (data, compute, talent) controlled by few global firms.
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CCI Action: New digital markets division to tackle AI-driven competition challenges.
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Risk Outlook: Potential ecosystem lock-ins and reduced digital sovereignty.
Sources: Fortune India, Financial Express, Competition Commission of India Reports