The ongoing oil and gas supply shock has brought renewed focus on the question of economic sovereignty. From pandemic-era shortages to the latest disruption, countries are once again rediscovering the risks of relying too heavily on external supplies for critical inputs. In sector after sector, building capacity at home is increasingly seen as essential for national security.
It is in this context that Sarvam AI, an artificial intelligence (AI) start-up founded in 2023, assumes significance. Today, foundational AI models are dominated by companies in the United States, with China being another major force, and most countries depend on these systems. Sarvam has developed two large language models entirely in India, built from scratch using computing resources provided by the IndiaAI Mission, a central government initiative aimed at creating a sovereign AI ecosystem.
In many ways, Sarvam reflects the idea of technology made in India, for India, by an Indian company. This is why the cover story in this edition focuses on the company and what it has done. As Palak Agarwal writes, the founders believe that domestic capability in foundational AI will matter increasingly in the years ahead.
Yet the lesson about sovereignty extends far beyond AI. The conflict in West Asia has once again exposed how fragile global supply chains can be. The near-complete closure of shipping through the Strait of Hormuz has triggered a massive disruption in global oil and gas markets. For a country like India, which imports a large share of its energy requirements, the episode is proving to be a painful reminder of how quickly global shocks can ripple through the domestic economy.
The crisis also highlights the importance of strategic buffers. India’s strategic petroleum reserves stand at just over 5.33 million tonnes, a relatively modest cushion for an economy of its size. The disruption has shown that a gas supply shortage poses a bigger risk for the economy, since natural gas storage is limited and a supply shock spreads fast.
This is not the first reminder of the need for an aatmanirbhar economy. The Covid-19 pandemic delivered a similar shock, exposing shortages across industries, from masks and medical oxygen to semiconductors.
This logic is especially relevant in advanced technologies. As AI becomes central to economic productivity and national security (witness the tensions between companies such as Anthropic and the US Department of War), the question of who builds and controls the models and data would be key.
However, a sovereign AI model alone would not be enough. Domestic capabilities across the wider technology ecosystem, from semiconductor chips to data infrastructure and software, are also essential. As Nidhi Singal explains in another story, several Indian companies are making a push into the semiconductor space, with an eye on reducing dependence on imports of this critical component.
The bottom line: sovereignty matters and buffers count. And it ultimately rests on building capability at home.
@szarabi
