India needs an enforceable AI regime

If New Delhi anticipated a delay in the enforcement of the Digital India Act, it should have introduced an intermediate legislation to govern existing AI usage.

The quick advancement and adoption of Artificial Intelligence (AI) across the globe is significantly changing the way different sectors operate, and it reflects in our daily lives in many forms, predominantly through the plethora of apps on our smartphones —navigation assistance to booking a cab to customised feed on social media apps and entertainment apps, to image recognition, etc.

This advancement of technology has its downside as well, which is the spike in tech-related fraud. Estimates suggest that India has close to 900 million Internet users, which is expected to reach 1.2 billion by 2026. Even though Internet penetration in the country has barely touched 50 per cent, the day that this ratio significantly tips over is not far. Alarmingly, India has the second highest number of Internet users, but has a low Internet literacy rate. Evidence shows increasing online frauds keeping pace with improved technology.

Though India has taken efforts to keep up with the AI boom, the current legislation in place is scattered in the form of guidance and principes inspired or adopted from global practices, along with an Information Technology Act that is more than two decades old and fails to capture any of the digital advancements ever since. India’s attempt at regulating AI is shaping up in the form of Digital India Act, 2023 to curb the downsides of AI and digital technology, while fostering a future-ready atmosphere for digital advancements in the country. The delay in its implementation is attributed to its planned development as a robust regulation of global standards customised to Indian needs. However, deliberate procrastination in this hour of dire need, with advancements in this field happening daily, is suicidal.

On the global front, the European Union, China, Canada, the United Kingdom, the Untied States, etc. are all on the verge of introducing AI regimes customised to their specific needs. Each jurisdiction has an interesting take on the AI regime that it seeks to enforce, like Europe laying down uniform rules for civil liability for damage caused by AI involvement, the UK and Singapore refrain from a separate AI law while integrating its features to sectoral laws, the US is adopting a case-to-case approach for different elements of AI, and stricter AI regulations are proposed by Canada, Brazil, and China. Though necessary, at the moment it seems elusive to have a uniform global approach to AI regulations to address regulatory gaps.

India should have taken quicker actions from both ends of the spectrum — if it anticipated a delay in enforcement of the Digital India Act, it should have introduced an intermediate legislation to govern existing AI usage. If it is confusing to start on a setup which would ensure adequate regulation without curbing development, it could have introduced an AI regulatory sandbox, like the one introduced by the Reserve Bank of India (RBI) for testing fintechs in preventing and mitigating frauds. This tool could have been immensely helped regulators analyse the multi-fold impacts of innovations, and develop evidence-based regulations for empowering the growth of AI in India while keeping a check on its negative effects.

The other end it would have helped in creating awareness. The gap in digital literacy is mostly for the boomer generation, generation X and the millennials, who are forced to embrace technology and digital advancements. Unfortunately, it is this group which currently engages in digital transactions the most, and are, therefore, more prone to online frauds.

India is capable of seizing opportunities offered by transformation and advancements in the digital world: the IT infrastructure which focuses on creating IT professionals and providing employment opportunities for these professionals, in addition to the Digital India campaign, will work in its favour. The government, on its part, must ensure that the right environment and legislation is provided as India (as the rest of the world) prepares to integrate AI.

Ranjith Krishnan is a Thane-based sustainability consultant, E P Madhusudhanan is a Kochi-based practicing company secretary, and Anju Panicker is Director, SEP Learning and Corporate Solutions Private Limited, Kochi.

Disclaimer: The views expressed above are the authors' own. They do not necessarily reflect the views of DH.