India’s AI growth needs strategic roadmap and stronger regulations

Artificial intelligence (AI) is transforming industries across the globe, and India is no exception. As the world’s fifth-largest economy and home to a burgeoning tech industry, India has embraced AI with remarkable enthusiasm, swiftly transforming industries at an unprecedented pace. 

From financial services leveraging AI-driven risk assessment models to healthcare providers utilizing machine learning for diagnostics, the technology is making inroads into every sector. Manufacturing firms are adopting AI-powered automation to enhance efficiency, while retail companies are using AI for personalized customer experiences.

According to estimates, India’s AI market is expected to grow significantly, reaching US$8.30bn this year. The rapid adoption is fueled by multiple factors, including government initiatives such as the National AI Strategy, which aims to position India as a global AI powerhouse. The rise of AI startups, investment from tech giants, increasing computing capabilities and a young, tech-savvy workforce have contributed to this growth. 

However, with great power comes great responsibility, and ensuring AI is deployed ethically and securely remains a major challenge. Without strong regulations and a well-defined policy framework, AI’s unchecked expansion could lead to privacy breaches, algorithmic biases, and socio-economic disruptions.

Regulatory challenges in AI adoption
Data Privacy and Security: AI-driven solutions rely on vast datasets, making data protection and cybersecurity crucial. While India’s Digital Personal Data Protection (DPDP) Act governs data privacy, it does not specifically regulate AI risks. 

Developing AI-specific data governance frameworks will be essential to mitigate algorithmic vulnerabilities and ensure trust in digital ecosystems.

Enhancing Algorithmic Transparency: AI models influence critical decision-making processes across sectors, necessitating increased interpretability and accountability. Developing industry-backed Explainable AI (XAI) guidelines can enhance transparency, helping businesses and regulators understand AI-driven decisions, particularly in sensitive sectors like healthcare, finance, and law enforcement.

Promoting Fairness and Inclusivity: Ensuring fairness in AI involves not only training on diverse and representative datasets but also deploying bias detection methodologies, regulatory oversight, and algorithmic auditing. Establishing clear ethical guidelines for AI decision-making in hiring, lending, law enforcement, and public services will be crucial to preventing discrimination.

Developing Industry-Specific AI Guidelines: AI applications vary widely across industries, necessitating sector-specific regulatory frameworks. Tailoring AI governance models to industries like healthcare, finance, and manufacturing can maximize benefits while ensuring responsible AI usage.

Clarifying AI and Intellectual Property Rights: With AI playing a growing role in content creation and innovation, clarifying legal frameworks around AI-generated content ownership will help businesses navigate copyright, intellectual property rights, and liability concerns.

Building future-ready AI ecosystem
Investing in AI Research and Development: Strengthening industry-academia collaborations, increasing AI R&D funding, and establishing AI innovation hubs will drive technological breakthroughs and position India as a global AI leader.

Bridging the AI Talent Gap: India’s tech talent pool is rapidly expanding, but structured AI-focused education, upskilling programs, and industry certifications are needed to equip professionals with the expertise required for AI-driven advancements.

Driving Industry-Specific AI Adoption: AI has the potential to revolutionize key sectors such as healthcare, agriculture, and smart infrastructure. A targeted approach aligned with sectoral needs and regulatory compliance will drive sustainable AI integration across industries.

Encouraging Public-Private Collaboration: Partnerships between government bodies, ICT firms, AI startups, and research institutions will be crucial in accelerating responsible AI adoption, fostering innovation, and ensuring AI benefits society at large.

By addressing these key areas, India can harness AI’s transformative power while ensuring ethical, secure, and industry-aligned implementation.

Global AI regulations: Lessons for India
Countries, such as the European Union, the United States, and China have already taken proactive steps in AI regulation. The EU’s proposed AI Act classifies AI applications based on risk levels, imposing strict compliance requirements on high-risk AI systems. 

Similarly, the US has focused on AI governance through executive orders and industry-led guidelines. Meanwhile, China has introduced stringent regulations around AI-generated content and algorithmic decision-making. India can draw valuable lessons from these global approaches by developing a balanced regulatory framework that encourages innovation while mitigating risks.

ICT companies provide the foundational infrastructure, cloud computing capabilities, and data analytics necessary for AI applications to scale. They facilitate AI-driven innovations across industries by offering robust digital platforms, ensuring seamless data connectivity, and driving the adoption of emerging technologies, such as 5G and IoT (Internet of Things). 

Next in line, they are instrumental in driving AI research, enabling businesses to leverage AI for enhanced operational efficiency, and supporting the government in implementing AI-driven governance and smart city initiatives.

Charting path for India’s AI leadership
India stands at the crossroads of an AI-powered future. While the rapid adoption of AI presents immense opportunities, it also necessitates a well-defined regulatory roadmap to address ethical, legal, and economic challenges. By learning from global best practices and implementing a balanced approach, India can harness AI’s potential responsibly while safeguarding societal and economic interests. 

A strategic regulatory framework will not only ensure ethical AI deployment but also position India as a global leader in AI innovation.

-- Pinkesh Kotecha, Chairman & MD, Ishan Technologies.