OPINION | Frugal, not second-best: How Indian B-schools can lead on AI

India’s business school classrooms are being judged by a market that has already moved on. Several industry reports point to changing job roles because of AI, and to the expectation that graduates demonstrate AI skills alongside management skills. The debate is no longer whether to use AI in business schools, but how to use it responsibly to drive learning and skill development, and how to develop industry-ready graduates through frugal innovation in pedagogy.

In a research study published this year in the Journal of International Education in Business, “Evaluating generative artificial intelligence adoption in management education using AI–human augmentation and expectation confirmation theory”, the authors found some interesting insights on AI use and challenges in Indian business schools.

Students described real gains: faster case preparation, a teaching assistant available at midnight, better writing, and work that resembled what they saw on internships. Faculty were using it to design assignments and assessments. Neither group lacked enthusiasm. What they lacked was training and rules. One business school faculty member put the principle better than any framework: AI is for “augmenting our thinking and not substituting our mind for the AI.”

Students need a protocol, not a ban

Take case preparation. The rule we can teach is simple: AI is a springboard after they have worked on the case themselves. Students write their own summary, define the problem, and set the criteria to solve it. Only then do they run the PACADI sequence—problem, alternatives, criteria, analysis, decision, implementation—past the AI, and treat what comes back as a challenge to their thinking rather than a substitute for it. Many of the world’s leading business schools encourage the use of AI before class and after class, but in class, students use what is in their heads.

Indian business schools also need to address faculty readiness and students' responsible use of AI. Without this, the learning and skill gains from AI will be diminished. Training faculty to improve pedagogy requires more will and ways than money. More indigenous and open-source AI is expected to be available in the future. There are ways to make AI resources available to Indian business schools at low cost. For instance, China is deploying many open-source AI models to deliver the gains from AI development, while closed models are reachable only through the developer’s interface or an approved API, and access is metered and paid for.

Open models can be downloaded, adapted, and run by anyone without licensing fees. For a resource-constrained institution, that difference is not academic. A research paper from March 2026 by the US-China Economic and Security Review Commission records that a leading Chinese open model cost four times less than a comparable American closed model in January 2026 while scoring identically on a widely used capability index. China’s state-backed push on open models is a geopolitical story, but its by-product is a cheap, adaptable technical commons that Indian institutions can build on now.

Generative AI offers business schools an opportunity to develop cost-effective, interactive simulations that bring management concepts to life. In one such simulation, students competed in groups, making strategic decisions and receiving real-time updates after each round. An anonymous internal survey of participants indicated strong engagement and perceived learning benefits: 93 per cent reported being fully absorbed in the exercise, 92 per cent said it improved their understanding of pricing and positioning, and 85 per cent felt they could apply the learning to real-world decisions. 

Furthermore, 95 per cent rated their likelihood of recommending the simulation to other students at eight or above on a ten-point scale. However, only 81 per cent felt the post-round reflections clearly explained why their decisions had succeeded or failed. This finding highlights a critical consideration in AI-enabled pedagogy: while AI can make learning more interactive and accessible, faculty guidance remains essential to help students interpret outcomes, challenge assumptions, and translate experience into meaningful managerial insights.

Past experiences with educational technology have taught a consistent lesson: tools raise learning outcomes when embedded in instructional design and disappoint when bolted on. AI now puts simulation and case creation for learning delivery within reach at a fraction of the cost of commercial products. The path ahead for Indian business schools is to equip faculty and students to use AI to augment critical thinking rather than outsource it. On that condition, Indian business schools can emerge as global leaders in integrating AI skills and building frugal innovations for AI-enabled pedagogy.

(The author is the Associate Professor of Marketing at Great Lakes Gurgaon)

 

(The opinions expressed in this article are those of the author and do not purport to reflect the opinions or views of THE WEEK.)