Economic Survey 2026: Why India is betting on AI Small Language Models (SLMs) over LLMs

In the Economic Survey 2026, the government has stated that India has adopted a ‘bottom-up approach’ to Artificial Intelligence (AI), prioritising Small Language Models (SLMs) over the “frontier model supremacy” (or LLMs) pursued by the West. This strategy is essentially a cleverly thought-out response to India’s unique resource constraints in the AI space and a strategic move to ensure technological autonomy under the ‘Atmanirbhar Bharat’ initiative.

The report states that by focusing on application-specific, efficient models, India aims to transform its role from a passive consumer of technology into a source of global reliability and value.