🤖 Agentic AI: India’s Double-Edged Sword

Good morning. It’s going to be a great week - let’s go after it 💪 

Ruchirr Sharma & Shatakshi Sharmaa  

TABLE OF CONTENTS

• 🍌 Google’s “Nano Banana” Takes on the AI Big Leagues

• 🤖 Agentic AI: India’s Double-Edged Sword

• Bite-sized summaries

  • 🇺🇸 IMF flags U.S. strains

  • 🇪🇺 EU Trade Pact boost for autos

• 🧑‍🍳 What else is cookin’?

MARKETS

🇮🇳 India

• Indian equities extended their rally for an eighth straight session. Auto, metal, pharma, and telecom sectors outperformed, while FMCG and PSU banks lagged. Midcap and smallcap indices remained flat; market breadth was moderately negative due to heavy FII selling.

🌍️ International

• US stocks ended mixed after a week of record highs. Data showed rising consumer caution and mixed inflation signals ahead of next week’s expected Fed rate cut. Tech and select consumer names continued to rally.

ARTIFICIAL INTELLIGENCE

🍌 Google’s “Nano Banana” Takes on the AI Big Leagues

Until now, the generative AI race has mostly been about video. OpenAI’s Sora wowed the world in late 2024 by turning text prompts into up to 60 seconds of lifelike video—far longer than rivals like Runway or Pika, which max out at four seconds. Adobe and Canva quickly jumped in with their own short-form video tools.

But Google just flipped the script. On August 26, it dropped Nano Banana—an AI tool baked into the Gemini app that specializes in image generation and editing. Think less “make me a movie” and more “erase that photobomber, fix the lighting, or mash two photos into one seamless shot.” In just days, it crossed 10 million downloads and powered over 200 million edits.

Why it matters: For years, photo editing tools were clunky, manual, and lived inside apps like Photoshop. Nano Banana shifts that to natural language—tell it what you want, and it does the heavy lifting. That lowers the barrier for brands, creators, and even classrooms to churn out slick visuals instantly. Google has already roped in Coca-Cola India and Boat for campaigns, while educators are using it to turn hand-drawn sketches into interactive lessons.

The bigger picture: While Sora, Firefly, and Canva chase video dominance, Google is betting on owning the photo and design layer. If it sticks, Nano Banana could become the go-to creative Swiss army knife—wedged between Photoshop for pros and TikTok filters for everyone else.

Read more: Economic Times

AMAZON

🤖 Agentic AI: India’s Double-Edged Sword

AI just leveled up. Enter agentic AI—smarter systems that don’t just answer prompts but can plan, execute, and manage tasks like a digital co-worker. Think of it as moving from “chatbot” to “colleague.”

For India, the implications are huge. Our $824B export engine runs on sectors like IT, textiles, and pharmaceuticals. If rivals adopt agentic AI faster, they’ll cut costs, boost productivity, and undercut us. That could mean erosion of exports and, worse, job losses in IT—an industry employing 5M people.

But here’s the kicker: even if India goes all-in on AI, the story isn’t rosy. Unlike past tech shifts that complemented workers (machines + humans = more output), agentic AI might outright replace them. That could lead to “jobless growth”—exports stay strong, but GDP lags and wealth flows westward, since India’s homegrown AI ecosystem still trails global players.

We’re already seeing early signals. Salesforce and Oracle cut jobs citing AI efficiency, while Walmart is betting on reskilling workers for higher-tech roles. The path India chooses—defensive (slow adoption) or aggressive (embrace and risk displacement)—will shape its growth model for the next decade.

The bottom line: India is at a crossroads. Shun AI, and we risk falling behind. Embrace it blindly, and we risk hollowing out jobs. The challenge isn’t whether to adopt, but how—balancing competitiveness with inclusion, and ensuring AI augments workers instead of replacing them wholesale.

Read more: Economic Times

GENERAL OVERVIEW

🗞️ Bite-sized summaries

🧑‍💻 IT hiring slows - India’s IT hiring outlook has weakened as tariff uncertainty and slowing global demand hit outsourcing. IT firms have trimmed July–December hiring projections to 1–3%, down from 3–5%, leaving the industry short by nearly 150,000 hires compared to earlier expectations. Recruitment demand for software engineers has contracted, with growth limited to AI, GenAI, cybersecurity, and data science roles. The Trump administration’s HIRE Act and unresolved U.S.-India trade tensions are making clients cautious about tech spending. While a mild recovery of 2–4% is expected in Q4, firms like TCS are cutting jobs, reflecting a shift toward niche digital talent over bulk hiring.

💰️ CSR for Ideas - India’s ₹34,900 crore CSR pool has transformed education, health, and rural development, but barely touches policy research—a critical gap for Aatmanirbhar Bharat. With R&D spending stuck at 0.64% of GDP and foreign funding shrinking under tighter FCRA norms, Indian think tanks remain under-resourced. Yet they are vital for shaping policies on AI, green hydrogen, MSMEs, and governance reforms. The law already permits CSR funding for R&D, but companies rarely use it. Even diverting 5–10% of CSR funds could create a ₹1,700–3,500 crore annual research pool, strengthening India’s intellectual backbone and ensuring true self-reliance.

HEADLINES

🧑‍🍳 What else is cookin’?

What’s happening in India (and around the world 🌍️)

• Reliance Consumer to invest Rs 1,500 cr to set up manufacturing facility in Nagpur.

• Adani stops accepting sanctioned vessels at its ports.

• India is one of the top relationships US has in world today: US Secretary of State Marco Rubio.

• Dream11, three other startups off unicorn list after online gaming law.