In a previous article, we introduced India’s AI regulation dilemma. The Indian government has weighed a non-regulatory approach, emphasizing the need to innovate, promote, and adapt to the rapid advancement of AI technologies, with a more cautious one, focusing on the risks associated with AI, notably job displacement, misuse of data, and other unintended consequences.
We argue that this dilemma is a result of the lack of a cohesive national AI strategy in India. In this article, we examine existing AI regulation approaches from the United Kingdom, the United States, the European Union, and China, and analyze India’s current economic and geopolitical situations to develop a proposal to resolve India’s AI regulation dilemma.
With a robust university system and a talent pool, the United Kingdom has the potential to become a leading AI powerhouse. To boost domestic AI technology development, the U.K. has recently adopted a “pro-innovation” strategy toward AI regulation. This strategy offers non-legally binding guidance, assigning regulatory responsibilities to existing entities, such as the Competition and Markets Authority. It serves as a mechanism for collecting feedback and insights from various stakeholders.
U.S. technology conglomerates have already dominated the global AI market. To consolidate its advantages, the United States has adopted an “industry-specific” strategy, where the government solicited proposals from these global AI conglomerates for AI regulation. This strategy was reflected in the White House’s request for voluntary commitments from leading AI companies to manage AI risks.
The EU is a highly fragmented market, where U.S. technology companies supply most of its AI technologies and applications. To minimize risks for users, the EU has developed an AI Act and adopted a “risk-based” strategy toward AI regulation. This strategy classifies AI products into distinct categories and assesses the potential harm an AI product could cause, accordingly stipulating the necessary precautions.
With the current China-U.S. technology competition, national security has become China’s first priority when it comes to AI regulation. China is adopting a “state-control” strategy toward AI regulation, This strategy essentially means that the government’s active involvement in AI development and deployment will uphold safety, ensure responsible use, and align the technology’s progression with the nation’s strategic objectives.
Returning to India, which path should the country take?
Should India adopt a “pro-innovation” policy like the United Kingdom? Compared to the U.K., India lacks the necessary digital infrastructure for AI foundation model development. Nonetheless, India possesses an enormous talent pool for software development as well as a booming consumer market. We project that India will become a major supplier of AI applications, not only serving its booming domestic market but the global market as well. Therefore, at this stage, we recommend India to adopt a “pro-innovation” approach toward its AI application developments.
Should India adopt a “risk-based” policy like the European Union? Like the EU, India has a fragmented market and also partners with the U.S. technology conglomerates for most of its AI foundation technologies. However, unlike the EU, where strict data protection laws have been enforced, India lacked comprehensive data protection legislation until the introduction of the Digital Personal Data Protection Act 2023. Since India partners on foreign AI foundation technologies, we recommend India to refine its data protection laws adopt a “risk-based” approach toward foreign AI foundation models.
Should India adopt a “industry-specific” policy like the United States? If India is going to partner with foreign technologies conglomerates for their AI foundation models in the foreseeable future, it would be best for the Indian government to work closely with these foreign technology partners to draft its data protection and AI regulation policies. It is interesting to note that Microsoft has already made a move to develop an AI regulation proposal for India.
Should India adopt a “state-control” policy like China? We argue against this approach, unless there is an abrupt change in India’s geopolitical stance. First, as mentioned above, India currently lacks the digital infrastructure to solely develop world-leading AI foundation models. Second, in the foreseeable future, we project that India will remain an ally of the United States, and it is highly unlikely that Washington will restrict India’s access to U.S. AI technologies. Instead, at this stage, India should focus on developing AI applications on top of AI foundation models from its technology partners to sustain its economic growth.
In summary, to resolve India’s AI regulation dilemma, we make the following recommendations: First, India should leverage its advantage in software development and adopt a “pro-innovation” approach to boost domestic AI applications. Second, India should refine its data protection laws and adopt a “risk-based” approach toward foreign AI foundation models. Third, India should work closely with major foreign technology partners to evolve its AI regulation policy.