Artificial Intelligence (AI) has rapidly evolved from being a niche technological domain into a foundational driver of economic growth, governance transformation, labour restructuring and geopolitical competition. Across the world, governments are struggling to balance innovation with regulation, and economic competitiveness with ethical responsibility. In this context, India’s recent efforts to articulate a distinct model of AI governance have attracted significant attention. The discussions gained prominence during the AI Impact Summit 2026 hosted in New Delhi, where India projected itself as a bridge between advanced economies and the Global South in shaping inclusive and responsible AI frameworks.
India’s approach is increasingly being described as a “Third Way” in AI governance — distinct from the compliance-heavy European model and the market-first American approach. Unlike the European Union’s strict regulatory orientation, which emphasises precaution and fundamental rights safeguards, and unlike the United States’ innovation-centric strategy driven largely by private sector dominance, India is attempting to combine regulatory oversight with developmental priorities. This hybrid approach seeks to ensure that AI remains a tool for social inclusion, economic empowerment and digital sovereignty.
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The issue is particularly significant because India has become one of the world’s largest digital societies. With more than 800 million internet users and rapid digital public infrastructure expansion, the country provides a vast testbed for AI applications in governance, healthcare, agriculture, education and labour markets. The increasing integration of AI tools into public platforms such as employment exchanges, welfare delivery systems and skill development portals has made the governance question urgent rather than theoretical.
Recent amendments to the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules marked a turning point in India’s AI regulatory journey. These amendments require digital intermediaries to label AI-generated content and to comply with strict timelines for removing harmful material. By mandating disclosure norms for synthetic media and misinformation control, India has positioned itself among the early movers in operationalising AI accountability mechanisms. This regulatory move reflects growing concerns about deepfakes, misinformation campaigns and algorithmic manipulation of public discourse.
The constitutional implications of AI governance in India are profound. Article 19(1)(a) of the Constitution guarantees freedom of speech and expression, but this freedom is subject to reasonable restrictions under Article 19(2). AI-generated misinformation and automated content raise complex questions about the limits of speech, platform liability and intermediary responsibility. Additionally, Article 21, which guarantees the right to life and personal liberty, has been expansively interpreted by the judiciary to include the right to privacy, dignity and informational self-determination. Algorithmic profiling, facial recognition and predictive analytics systems must therefore operate within the bounds of constitutional morality and proportionality.
India’s data protection architecture also plays a central role in shaping AI governance. The Digital Personal Data Protection framework seeks to regulate how personal data is processed, stored and transferred. Since AI systems depend heavily on large datasets, issues of consent, purpose limitation and data minimisation become critical. The interaction between AI innovation and privacy safeguards will likely determine the credibility of India’s governance model in global forums.
The economic dimension of AI governance is equally significant. According to estimates by the International Labour Organization, a substantial proportion of global jobs will be exposed to generative AI technologies over the next decade. In India’s case, the impact is particularly complex because of the country’s demographic structure and labour composition. A large share of India’s workforce is employed in informal or semi-skilled sectors, making technological disruption both an opportunity and a threat.
On the one hand, AI-driven automation can enhance productivity, reduce transaction costs and expand digital service delivery. On the other hand, it can displace routine cognitive and clerical jobs, leading to transitional unemployment and widening skill gaps. The government has therefore integrated AI discussions with skill development initiatives and labour market reforms. Efforts to map informal workers through digital platforms aim to facilitate targeted skilling interventions and social protection coverage.
India’s AI strategy is also closely linked to its broader digital public infrastructure framework. Platforms such as Aadhaar, Unified Payments Interface (UPI) and digital identity ecosystems provide structured data environments that can enhance AI deployment in public services. However, this integration also increases the risk of surveillance concerns and centralised data vulnerabilities. Balancing efficiency gains with civil liberty safeguards remains a key governance challenge.
From a geopolitical perspective, AI has become an arena of strategic competition among major powers. The United States leads in advanced AI research and private-sector innovation, while China has invested heavily in state-directed AI expansion. The European Union has prioritised regulatory standards and ethical benchmarks. India, positioned between these blocs, seeks to assert technological autonomy while maintaining global partnerships. Its emphasis on open-source collaboration, multilingual AI models and affordable digital access reflects a developmental orientation.
The concept of digital sovereignty is central to India’s AI discourse. Dependence on foreign AI models, cloud infrastructure and semiconductor supply chains can expose national security vulnerabilities. Therefore, investments in domestic computing capacity, indigenous AI research and semiconductor fabrication are increasingly seen as strategic imperatives. AI governance, in this context, extends beyond ethics into the realm of economic security and technological independence.
Nevertheless, India’s “Third Way” is not without challenges. Enforcement capacity remains limited when compared to the scale of digital operations. Monitoring compliance by multinational technology corporations requires technical expertise, institutional coordination and cross-border regulatory cooperation. Additionally, the rapid pace of AI evolution makes static legal frameworks quickly obsolete. Policymaking must therefore be adaptive, consultative and evidence-driven.
Algorithmic bias presents another significant concern. AI systems trained on skewed or unrepresentative datasets can perpetuate social inequalities related to caste, gender, region and language. In a diverse society like India, such biases could reinforce systemic discrimination. Transparent auditing mechanisms and ethical review processes are essential to ensure fairness and inclusivity.
There is also the risk of regulatory overreach. Excessive compliance burdens could stifle innovation, discourage startups and slow down research momentum. India’s technology ecosystem has thrived partly due to regulatory flexibility and entrepreneurial dynamism. Striking the right balance between oversight and encouragement is therefore crucial.
In terms of international impact, India’s model may serve as a template for other developing countries that face similar developmental constraints. Many Global South nations lack the institutional capacity to replicate the European Union’s complex regulatory apparatus, yet they also cannot afford an entirely laissez-faire approach. India’s experiment in combining digital public infrastructure with calibrated AI oversight could offer an alternative pathway.
For UPSC aspirants, this topic is highly relevant for both Prelims and Mains. In Prelims, questions may focus on recent amendments to IT Rules, provisions of the Digital Personal Data Protection framework, or institutional mechanisms related to AI governance. In Mains, the issue can be examined under themes such as technology and governance, ethical dimensions of AI, labour market transformation, digital sovereignty and comparative regulatory models. The topic intersects with GS Paper II (governance and polity), GS Paper III (science and technology, economy, internal security) and Essay papers.
For SSC examinations, factual clarity is essential. Candidates should remember key features such as mandatory labelling of AI-generated content, India’s emphasis on inclusive AI development and the role of digital public infrastructure in governance reform.
Looking ahead, India’s AI governance journey will likely evolve through iterative policymaking rather than a single comprehensive statute. The establishment of specialised AI oversight bodies, public consultation frameworks and sector-specific guidelines may gradually shape a coherent regulatory architecture. Continuous dialogue between government, industry, academia and civil society will be essential to maintain legitimacy and adaptability.
Ultimately, AI governance is not merely about controlling technology; it is about defining the relationship between state, market and citizen in the digital age. India’s attempt to craft a “Third Way” reflects its broader developmental philosophy — one that seeks to harness technology for inclusive growth while safeguarding democratic values. Whether this model succeeds will depend on institutional maturity, enforcement credibility and the capacity to respond to technological disruption without compromising constitutional principles.
The coming decade will determine whether India can transform its demographic advantage and digital infrastructure into a globally respected AI governance framework. If managed prudently, AI could become a catalyst for productivity, employment expansion and service delivery transformation. If mishandled, it could deepen inequalities and erode trust in institutions. The stakes, therefore, extend far beyond technological innovation — they encompass the future trajectory of India’s democratic and economic evolution.