Govt body plans legal framework for AI companies

India's newly constituted Artificial Intelligence Governance and Economic Group is poised to introduce a unified legal framework for AI companies, including developers of large language models and chatbot systems, aiming to establish clear regulatory boundaries and foster responsible AI development across key sectors.

The government's newly constituted Artificial Intelligence Governance and Economic Group (AIGEG) is expected to push for a unified legal framework governing companies operating in the artificial intelligence space, including developers of large and small language models and chatbot systems, alongside broader rules defining how such technologies should function, senior officials have said.

The proposed framework would establish clearer boundaries and regulatory sandboxes that AI products and services must not overstep, according to an official familiar with the discussions.

The framework will be applicable to all such companies operating or offering their AI tools and services in India.

Establishing Accountability and Compliance

"While rules exist for internet company governance, AI presents a different set of challenges.

"Companies developing and offering AI tools must be held accountable and comply with domestic laws," the official said.

Besides regulatory measures, the AIGEG is also expected to sharpen India's broader AI strategy by funnelling the bulk of funding into a limited number of use cases capable of delivering measurable outcomes within the next 12 to 18 months.

Priority sectors are likely to include health care, agriculture and education, another official said.

"Reskilling and upskilling will also be a focus to contain potential job losses as much as possible.

"We will soon start broader consultations with industry groups and companies to study which job profiles are most impacted and the best way to retrain people in those departments," the official added.

Formation and Concerns Over AI Advancement

Earlier this month, the Ministry of Electronics and Information Technology (Meity) announced the formation of the 10-member AIGEG, to be chaired by the Union minister for electronics and information technology.

The need for an apex AI governance body in India follows growing concern among experts over the rapid advancement of large language models (LLMs) and tools such as Claude Mythos, which have demonstrated the ability to penetrate legacy software systems and existing digital defences.

"There needs to be a coordinated government-wide effort to tackle potential problems from such LLMs and tools.

This (Claude Mythos) is just the start. We believe all companies in this space will develop similar or better capabilities within the next two to three years," an official said.

Composition of AIGEG and Expert Committee

The AIGEG also includes the minister of state for electronics and information technology as vice-chairperson, alongside the principal scientific adviser to the government, the chief economic adviser, the chief executive of NITI Aayog, and secretaries from key departments including telecommunications, economic affairs, science and technology, and information technology.

Also, a separate Technology and Policy Expert Committee has been established, comprising B Ravindran of Indian Institute of Technology Madras, Rajat Moona, director of Indian Institute of Technology Gandhinagar, and representatives from industry bodies including Nasscom, the Data Security Council of India and the Manufacturers' Association for Information Technology.

Headed by the IT ministry secretary, the committee will support the AIGEG by providing technical and policy expertise, briefing it on matters of national importance related to AI governance.

It will also assess emerging capabilities, identify potential risks and regulatory gaps, and help shape India's policy response to emerging technologies, officials said.