The Hindu (Mumbai)

Cabinet approves ₹10,372 cr. AI corpus


With imports from China and Vietnam rising since last October, India is likely to be a net finishedst­eel importer in 202324 after a gap of five years, and is likely to remain so in the coming year as well unless the external demand environmen­t improves meaningful­ly, rating agency ICRA has said.

Moreover, domestic steel consumptio­n growth is expected to slide to 7%8% after three years of doubledigi­t growth, down from about 12%13% this year, while higher input costs and soft steel prices will squeeze operating profit for margins for producers by 110115 basis points

The Union Cabinet on Thursday approved a ₹10,371.92 crore corpus to fund Artificial Intelligen­ce computing infrastruc­ture and startups in the AI space. This corpus would provide viability gap funding, subsidise projects that may face steeper costs for setting up datacentre­s and other such facilities.

It will also contribute to applicatio­n developmen­t for government use.

The corpus is the Centre’s largest direct investment in AI, even as efforts to bring more semiconduc­tor fabricatio­n, design and assembly facilities are underway.

The corpus will be dis

Local demand has been slowing over December and January, growing by just 6.5%.

in 202425, according to a ICRA research note.

Domestic demand has already been slowing over December and January, when it grew just 6.5%, after six months of about 16% growth.

“While these are early bursed through the India AI Mission launched last year. “In the Artificial Intelligen­ce area, the progress and solutions from India will be strengthen­ed,” Union Commerce and Industries Minister Piyush Goyal said announcing the corpus. “Graphics Processor Units will be made in PublicPriv­ate Partnershi­p (PPP) mode,” Mr. Goyal added. trends, the numbers nonetheles­s hint at demand remaining soft over the next two quarters as the government spending moderates around the election period,” remarked Jayanta Roy, Senior VicePresid­ent and Group Head of Corporate Sector Ratings at ICRA.

On the external front, steelmaker­s remain on tenterhook­s, ICRA said, as multiple structural headwinds in China have propelled its steel exports to a sevenyear high in 2023.

“With most other large steelconsu­ming hubs globally also facing subpar economic activities in the near term, global steel trade flows have been increasing­ly redirected to highgrowth markets like India,” ICRA said.

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Piyush Goyal

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