AI Legislative Guide |
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India |
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(Asia Pacific)
Firm
Shardul Amarchand Mangaldas & Co
Contributors
Shahana Chatterji |
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| Has specific legislation, final regulations or other formal regulatory guidance addressing the use of AI in your jurisdiction been implemented (vs reliance on existing legislation around IP, cyber, data privacy, etc.)? | Yes. |
| Please provide a short summary of the legislation/regulations/guidance and explain how legislators aim to strike the balance between innovation and regulation. | The Indian Government is aiming to strike a balance between innovation and regulation in the AI sector by undertaking measures such as: i. Principle-based policies: Principle-based policies have been developed to avoid over-regulation of AI and ensure that only principle-based requirements are laid down, such as:
ii. Disclosure-based regulation: As mentioned above, SEBI has adopted a disclosure-based regime for the use of AI solutions instead of laying down limitations towards their usage in the securities sector. Such a regime promotes innovation while also ensuring that necessary safeguards for end-users are in place (e.g., refer to the SEBI AI/ML Circulars). iii. Regulatory Sandboxes: Sectoral regulators such as the RBI and the Pension Fund Regulatory and Development Authority have implemented regulatory sandboxes to foster the development of technology-based initiatives which also include, among other things, AI/ML solutions within their respective sectors. iv. Usage of AI to aid regulation: Sectoral regulators such as the Insurance Regulatory and Development Authority of India ("IRDAI") have taken initiatives to promote the usage of AI, for instance, to aid in risk and fraud detection by insurers for underwriting purposes. The InsurTech Working Group on Innovations in Insurance involving Wearable/Portable Devices has recommended that such usage of AI should be subject to (a) human supervision to ensure transparency regarding the factors considered in making such risk/fraud detection, and (b) minimum product specifications to keep up with the growing technical advancement of AI solutions. |
| Which agency regulates the use of AI in your jurisdiction? | MEITY is the technology regulator in India that regulates the usage of technology solutions and has held consultations for the development of consolidated legislation for the regulation of AI and other emerging technologies. In addition, sectoral regulators can regulate the usage of AI in their respective sectors. As noted above, SEBI has introduced rules to enforce disclosure and transparency in the use of AI. Other regulators, such as, IRDAI are looking at ways in which AI can aid in regulation. |
AI Legislative Guide
India
(Asia Pacific) Firm Shardul Amarchand Mangaldas & CoContributors Shahana Chatterji
Updated 06 May 2024Yes.
The Indian Government is aiming to strike a balance between innovation and regulation in the AI sector by undertaking measures such as:
i. Principle-based policies: Principle-based policies have been developed to avoid over-regulation of AI and ensure that only principle-based requirements are laid down, such as:
- The National Strategy for AI developed by Niti Aayog (the apex policy think tank under the Government of India) has encouraged the growth of a Responsible AI model for use in various sectors, wherein principles such as transparency, explainability, auditability, etc. are recommended to be adopted.
- The Reserve Bank of India's ("RBI") Report on Digital Lending Including Lending Through Online Platforms And Mobile Apps, 2021 recommends the usage of an ethical AI design by RBI-regulated entities wherein algorithms of the AI software: (a) be auditable, (b) be explainable in nature (c) have necessary transparency features and privacy protection, and (d) ensure that lenders use the AI tools in a non-discriminatory manner by eliminating biases in training datasets.
ii. Disclosure-based regulation: As mentioned above, SEBI has adopted a disclosure-based regime for the use of AI solutions instead of laying down limitations towards their usage in the securities sector. Such a regime promotes innovation while also ensuring that necessary safeguards for end-users are in place (e.g., refer to the SEBI AI/ML Circulars).
iii. Regulatory Sandboxes: Sectoral regulators such as the RBI and the Pension Fund Regulatory and Development Authority have implemented regulatory sandboxes to foster the development of technology-based initiatives which also include, among other things, AI/ML solutions within their respective sectors.
iv. Usage of AI to aid regulation: Sectoral regulators such as the Insurance Regulatory and Development Authority of India ("IRDAI") have taken initiatives to promote the usage of AI, for instance, to aid in risk and fraud detection by insurers for underwriting purposes. The InsurTech Working Group on Innovations in Insurance involving Wearable/Portable Devices has recommended that such usage of AI should be subject to (a) human supervision to ensure transparency regarding the factors considered in making such risk/fraud detection, and (b) minimum product specifications to keep up with the growing technical advancement of AI solutions.
MEITY is the technology regulator in India that regulates the usage of technology solutions and has held consultations for the development of consolidated legislation for the regulation of AI and other emerging technologies. In addition, sectoral regulators can regulate the usage of AI in their respective sectors. As noted above, SEBI has introduced rules to enforce disclosure and transparency in the use of AI. Other regulators, such as, IRDAI are looking at ways in which AI can aid in regulation.