Model Conduct: Regulating Artificial Intelligence Without Stifling Innovation

Context:
As Artificial Intelligence (AI) technologies advance rapidly, India faces the challenge of designing an AI regulatory framework that balances innovation, consumer protection, and ethical safeguards. An editorial contrasts India’s light-touch, reactive approach with China’s stringent AI rules, underscoring the need for a context-sensitive and risk-based regulatory strategy.

Key Highlights:

India’s Current AI Regulatory Framework

• AI regulation in India is indirect and fragmented, governed through:

  • Information Technology (IT) Act, 2000

  • IT Rules (intermediary obligations)

  • Data protection regulations

  • Sector-specific rules in finance and securities

• No standalone AI law or explicit duty of care for AI product safety, especially for psychological and emotional harms.

China’s Regulatory Approach

• China has proposed stringent rules for emotionally interactive AI services.

• Mandates:

  • User warnings against excessive emotional reliance

  • Intervention mechanisms for users exhibiting extreme emotional states

• Reflects a preventive and intrusive regulatory model prioritising social stability.

India’s Sectoral & Reactive Measures

• MeitY has acted against deepfakes, mandating:

  • Labelling of “synthetically generated” content

  • Takedown obligations under IT Rules

• Financial regulators (RBI, SEBI) have issued expectations on:

  • Model risk management

  • Accountability in AI tool deployment

Innovation & Strategic Concerns

• India trails the U.S. and China in frontier AI model development.

• Over-regulation at this stage could stifle domestic innovation and investment.

• Need to focus on capability-building rather than restrictive controls.

Relevant Prelims Points:

• Issue: Absence of a comprehensive AI-specific regulatory framework in India.

• Key Institutions:

  • MeitY – AI governance and IT Rules

  • RBI & SEBI – sectoral AI oversight

• Key Concepts:

  • Deepfakes – AI-generated synthetic media

  • Duty of Care – legal obligation to prevent foreseeable harm

• Impact:

  • Gaps in consumer protection, especially mental and emotional well-being

Relevant Mains Points:

• Governance Perspective:

  • India’s approach is reactive, responding to harms after occurrence.

  • Lacks explicit AI product safety and accountability standards.

• Comparative International Models:

  • China: Preventive, state-centric, intrusive regulation

  • India: Innovation-friendly but under-regulated

• Science & Technology Angle:

  • AI risks are context-specific, requiring downstream regulation.

• Balanced Regulatory Path:

  • Regulate high-risk applications, not general-purpose AI.

  • Mandate incident reporting for AI-related harms.

  • Introduce a duty of care for AI developers and deployers.

  • Use public procurement to support indigenous AI development.

UPSC Relevance (GS-wise):

• GS 2: Governance, Digital Regulation, Global Norms

• GS 3: Science & Technology, Emerging Technologies

• GS 2: International Relations – Comparative Regulatory Models