Lucknow Ushers in India's AI City Era

🔍Insights

Nadeesh Kareemdathil, Apoorva Bajj

Jan 29, 2024 — 4 min read

Lucknow Ushers in India's AI City Era

In a groundbreaking move, the state of Uttar Pradesh, India's most populous, is embarking on the ambitious project of building the nation's first AI city in Lucknow. This initiative aims to propel India to the forefront of artificial intelligence adoption and foster a thriving AI ecosystem.

Fueling this ambition is the rapidly expanding global AI market, estimated to reach a staggering $137 billion in 2022 and projected to climb by a colossal 37.3% annually until 2030, according to Grand View Research.

Lucknow itself presents a fertile ground for this project. The city boasts established Centres of Excellence in AI and MedTech, where AI finds extensive integration. Notably, the AI Centre of Excellence at IIIT Lucknow nurtures a vibrant community of over 15 AI/ML startups, fostering a spirit of innovation and entrepreneurialism that perfectly aligns with the AI city vision.

The ideal partner will leverage cutting-edge technology, prestigious research centers, and leading educational institutions to create a fertile ground for innovation. This AI city aspires to be a vibrant hub where groundbreaking ideas flourish and the next generation of AI talent is nurtured, shaping the future of the workforce.

To achieve this vision, the developer will play a crucial role in constructing state-of-the-art infrastructure. This includes building plug-and-play office spaces ready for immediate occupation, alongside a dedicated tower equipped with Grade A office facilities. By catering to incubators, startups, and established corporations, this ecosystem will foster collaboration and drive the city's growth.

The government is set to allocate 40 acres in the Nadarganj Industrial Area for the AI City project in Uttar Pradesh, offering unencumbered land with backing for land acquisition, zoning regulations, and necessary clearances. Fueling investor interest, the AI City project boasts substantial financial benefits for the chosen developer. A generous 25% one-time Capex subsidy, capped at ₹20 crore, will be provided for IT Park development. Moreover, the project itself stands to receive a substantial one-time Capex infusion of ₹100 crore. To further incentivize participation, the government offers a 100% stamp duty exemption, as per the IT and ITeS Policy, 2022.

UP Electronics Corporation Ltd. (UPECL), the project's nodal agency, highlighted in the Expression of Interest (EoI) that the AI City should feature a blend of luxury and affordable housing complexes, fostering a walk-to-work model. Dedicated spaces for leading engineering and management institutes will be provided to encourage industry-academic collaboration, alongside AI-enabled internal transportation modes.

In pursuit of becoming a $1 trillion economy within the next 5 years, the UP government identifies IT and ITeS as pivotal sectors for driving economic growth. As the sixth-largest state in terms of the IT ecosystem and home to a substantial number of startups, UP aims to enhance its global IT and ITeS footprint by promoting emerging technology hubs like Lucknow, complementing Noida's status as a key IT and ITeS hub.

Recognizing AI's potential as a global growth driver for IT and ITeS, the state plans to capitalize on this trend. Noida, already home to major IT players such as HCL and TCS, is enriched by a skilled workforce comprising over 75,000 tech professionals, 23,000 STEM graduates, and collaboration with renowned institutions like IIM-Lucknow, IIIT-Lucknow, BBDU, and Amity, as outlined in the EoI document.

Further fostering the city's collaborative spirit, a dedicated space will be reserved for top engineering and management institutes. This proximity between academia and industry will facilitate dynamic interactions, drive research, and nurture future AI talent.

Sustainability and efficiency are also key priorities, with AI-powered internal transport systems planned to seamlessly navigate the city. This smart infrastructure aligns with Uttar Pradesh's ambitious goal of becoming a $1 trillion economy within the next five years.

In a signal of India's growing commitment to artificial intelligence, the central government also has begun crafting a comprehensive regulatory framework for the technology. This initiative, spearheaded by IT Secretary S Krishnan, aims to nurture AI's responsible development, protecting both user interests and fostering the innovation potential.

This focus on AI aligns with the technology's meteoric rise on the global stage. Recognizing its transformative potential, Minister of State for Information Technology Rajeev Chandrasekhar recently announced plans to actively support and fund Indian AI startups, providing them with vital resources to fuel their growth.