(Bloomberg) — Six months ago, Indian Prime Minister Narendra Modi was fending off verbal attacks from US President Donald Trump, trying to regain the upper hand over Pakistan after an armed conflict, and facing questions about his economy’s prospects.

Two months into the new year, he’s secured major trade pacts with the European Union and the US, will host several foreign leaders in the coming weeks who want to clinch their own deals, is riding a wave of popular support following key state elections, and his top officials expect economic growth will beat the government’s own forecasts.

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This week, Modi will have an opportunity to showcase not only India’s global ambitions but also his own resurgence when he takes the stage at a high profile artificial intelligence summit in New Delhi. In attendance at the India AI Impact Summit will be more than a dozen heads of state, including from France and Brazil, and some of the most influential leaders in the tech world — from OpenAI’s Sam Altman to Sundar Pichai of Alphabet Inc. to Anthropic PBC’s Dario Amodei.

For Modi, the summit is a chance to gain a stronger foothold in the AI race as well as channel the global spotlight on the country as it seeks to shake off a turbulent year. Nearly two years into his third term as prime minister, Modi is looking for a reset politically and to reassert India’s position as a rising economic power.

The AI conference “provides a great stage for the prime minister to project his image as a developer or a modernizer — someone who has a vision of future for India,” said Swaran Singh, professor at the School of International Studies at Jawaharlal Nehru University in New Delhi. “And he’s good at utilizing such opportunities.”

For much of last year, Modi appeared on the back foot. Tensions with nuclear-armed neighbor Pakistan came to a head in May in an armed clash. Trump complicated matters when he claimed he halted the conflict, an assertion Modi and his officials strongly rejected but Pakistan welcomed. Months later, Trump slapped 50% tariffs on Indian goods and slammed the country for its trade barriers and ties with Russia.

India’s global reputation was also tarnished by investigations in Canada and the US into allegations that Indian officials were involved in targeted assassinations of Modi’s opponents in those countries.

Stronger Ties

Fast-forward to 2026, and India’s relations with the US appears to be back on track. Trump cut tariffs on Indian goods to 18% earlier this month, lower than most of the country’s Asian peers. Modi is making renewed efforts to strengthen trade ties with other countries as well: In January, European Commission President Ursula von der Leyen signed a free trade pact with India after almost two decades of talks.

Canadian Prime Minister Mark Carney is also looking to move beyond the diplomatic crisis sparked by New Delhi’s alleged links to the killing of a Sikh activist in that country in 2023. Driven by Trump’s tariffs, Carney is due to visit India in coming weeks to get a trade deal back on track. In the US, the case of a separate murder plot of a Sikh activist also effectively came to an end after an Indian national pled guilty in a New York court to his role.

Given the challenges Modi faced last year, “the business community considers him to have come out with a big win,” said Pranav Pai, founding partner at Bangalore-based venture firm 3One4 Capital, who’s invested in startups including tech companies.

Domestically, Modi has moved to shore up support with voters and boost domestic spending as a bulwark against Trump’s tariffs. He rolled out long-sought reforms, including implementing new labor rules and a sweeping consumption tax overhaul. The government is predicting growth of as much as 7.2% in the fiscal year starting April 1, although officials are optimistic the economy may even exceed that pace now that the US trade agreement has been secured.

Modi also won landslide victories in key regional elections in Bihar and Delhi last year. That’s a stark contrast to his setback in the national elections in 2024, when he failed to secure a majority in the parliament for the first time since he took office.

For the Indian leader, the AI gathering offers a chance to showcase the country’s vast, tech-savvy population and deep engineering talent as forces that could tilt the next phase of the global AI race in its favor.

India has drawn over $50 billion in fresh investments from Amazon.com Inc. and Microsoft Corp, underscoring the country’s rising status as a key growth market for AI, cloud services and online retail. Companies such as OpenAI and Google are offering their AI assistants for free to users in India, as it offers an unmatched combination of scale and a relatively forgiving regulatory stance. India’s appeal is boosted by the fact that China, one of the world’s most promising internet markets, is effectively sealed off for US Big Tech.

“India’s workforce gives the country a long-term structural strength that many advanced economies cannot replicate,” S. Krishnan, secretary at the Ministry of Electronics and Information Technology, which is helping organize the summit, wrote recently in the Indian Express newspaper.

He added that Indian firms are building AI tools ranging from health diagnostics and crop advisory systems to digital tutors and governance platforms serving millions, drawing interest from countries in Southeast Asia, Africa and Middle East facing similar challenges.

“Through this summit, Modi is looking to focus on the Global South,” said Nidhi Singh, a senior research analyst at Carnegie India. “This in itself will put India on an elevated platform, cementing Modi as the voice of the developing world.”

AI Risks

For India, AI also poses significant economic risks, particularly for its expanding labor force. Software companies like Infosys Ltd. and Tata Consultancy Services Ltd., which employ millions, have fallen out of favor with investors amid mounting concerns that AI could disrupt their traditional business models. Automation fears have weighed on IT stocks this month, pushing the Nifty IT Index to its worst week since April.

V. Anantha Nageswaran, India’s chief economic adviser, addressed some of the job concerns at the summit on Monday, calling AI a “stress test of our state capacity” and underscoring the urgent need to generate employment. “Every year of delay compounds the pressure. Every year of drift narrows our options,” he said.

The upheaval comes at a time when Modi is already struggling to create enough jobs for the millions of young people entering the workforce each year. Despite its world-beating growth rate, economists say India must expand even faster to generate sufficient employment for the world’s most populous nation.

“Modi is in a strong position for now, but much will depend on the pushback from those who are not benefiting in the current economy,” said Nilanjan Mukhopadhyay, who wrote a biography of the prime minister.

–With assistance from Sankalp Phartiyal and Dan Strumpf.

(Adds comments from India’s CEA in the 19th paragraph.)

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