India’s AI policy: As the global battle for artificial intelligence leadership intensifies — with the US, and China positioning themselves as dominant players — India finds itself at a tricky situation. The promise of AI is not merely about enhanced efficiencies; it carries the potential to democratise knowledge, fortify national security, and transform economic structures. Yet, to truly seize this opportunity, India must craft an independent AI strategy that goes beyond being a passive adopter of foreign technology. While government initiatives signal intent, execution remains the real challenge.
The government’s recent call for proposals from over 50 companies to develop India-specific AI foundation models, including small language models (SLMs) and large language models (LLMs), reflects its ambition to create an indigenous AI ecosystem. Nearly a dozen firms have expressed readiness to contribute. If implemented effectively, this move could transition India from a consumer to a creator of AI technology. However, while Union Minister Ashwini Vaishnaw’s projection of an operational sovereign AI foundation model within months is an optimistic assertion, questions linger over execution capacity and long-term sustainability.
A critical element missing from India’s AI policy is a clear mechanism to address ethical risks, misinformation, and job displacement. The government has introduced regulatory frameworks such as the Information Technology (IT) Rules, 2021, and the Digital Personal Data Protection (DPDP) Act, 2023 to prevent AI misuse. These measures focus more on content control rather than deeper systemic risks of manipulation and privacy violations. Without a holistic framework that includes robust enforcement mechanisms, India risks building an AI ecosystem that is neither accountable nor truly sovereign.
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Democratising knowledge
AI has the power to unlock vast repositories of knowledge, making information accessible across linguistic and socio-economic divides. India’s AI for All vision has led to initiatives such as E-Jadui Pitara and Krishi Mitra, which empower teachers and farmers with AI-driven insights. Yet, the broader concern remains: who controls the data? The expansion of AI in India depends on vast datasets, and while the government claims alignment with the DPDP Act, the question of data ownership and citizen privacy remains unresolved.
The establishment of an advisory group on AI regulation chaired by the principal scientific adviser is a step towards responsible AI governance. However, without clear timelines and actionable measures, the risk of data monopolisation by a few powerful players remains high. AI democratisation cannot come at the cost of citizen agency over their own data.
Investing in talent and infrastructure
A robust AI ecosystem demands both human capital and physical infrastructure. The government’s allocation of Rs 500 crore for a centre of excellence in AI for education, alongside plans to expand IIT seats and technical training, signals a commitment to skill development. However, this initiative alone will not be enough to bridge India’s AI talent gap.
India must also address its over-reliance on foreign hardware. Indigenous semiconductor manufacturing and local production of AI-driven infrastructure are critical to reducing dependence on unpredictable global supply chains. While the government has announced AI data labs in Tier 2 and Tier 3 cities to foster innovation, the success of these initiatives will depend on adequate funding and industry collaboration. Public-private partnerships must go beyond mere funding announcements and focus on long-term R&D investments that ensure India’s AI ambitions are not derailed by supply chain vulnerabilities.
AI policy — Innovation with ethical safeguards
AI is a double-edged sword. While it can drive efficiencies, it also poses serious ethical risks. The government has launched eight Responsible AI projects focusing on bias reduction, privacy safeguards, and ethical frameworks. Yet, critics highlight a fundamental gap: how will these guidelines be enforced?
The government’s AI policy—somewhere between the stringent European model and the laissez-faire American stance—aims to strike a balance between innovation and regulation. However, AI risks such as deepfakes, hallucinations, and job displacement require more than just reactive policy measures. If India wants to lead in AI, it must also lead in ethical AI governance. This means ensuring tech companies are held accountable for algorithmic biases and misinformation, not merely enforcing content moderation laws.
Creator of jobs or destroyer
One of the most pressing concerns surrounding AI is its impact on employment. Automation threatens jobs across manufacturing, customer service, and even white-collar professions. The government’s IndiaAI FutureSkills initiative, which offers fellowships and skill-training programs, acknowledges this challenge but stops short of addressing the fundamental question: what happens to workers whose jobs are permanently displaced by AI?
Rather than focusing solely on upskilling, India must craft policies that ensure AI augments human labour rather than replacing it outright. This requires a paradigm shift in labour policy, ensuring that automation does not exacerbate inequalities but instead fosters new employment avenues.
Despite its digital prowess, India’s AI policy remains fragmented. If the country is to avoid being relegated to the role of a mere outsourcing hub, it must forge a cohesive national AI strategy that aligns education, industry, and governance.
India’s rote-learning education system must evolve to encourage creativity and problem-solving, fostering a generation of AI researchers rather than just AI users. Private capital must flow more freely into deep-tech ventures, supporting homegrown breakthroughs instead of relying on foreign expertise. And perhaps most critically, India must shed its cautious approach and take calculated risks—because in AI, as in geopolitics, power is never given; it is taken.