India is assembling an industrial-policy toolkit that includes
production-linked incentives, the IndiaAI Mission, semiconductor subsidies, and
lessons drawn from global innovation systems. The instinct is understandable.
Governments want to compress technological catch-up through coordination and
capital. Yet the lesson India appears to be drawing is more complicated than
either its admirers or critics suggest.
The most consequential Chinese technology outcome of this decade was not
produced by the Chinese state in the way it is often assumed. DeepSeek, the AI
firm whose low-cost frontier models unsettled Silicon Valley and reshaped
assumptions about the price of intelligence, did not emerge from a national
champion program. It was not a state-picked winner under a five-year plan. It
did not originate inside China’s formal industrial policy machinery.
India’s Innovation Strategy and the China Misread
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