Unlocking potential: GenAI regulation and India’s economic growth

By Ayan Sharma, Head of Public Policy and Advocacy, BTG Advaya

Generative AI (“Gen AI”), is at the cusp of reshaping industries globally. It has begun revolutionising operating models, transforming value chains and altering economic dynamics The potential economic benefits of generative AI are vast, offering increased productivity, automation, and enhanced decision-making capabilities, ultimately driving growth in numerous sectors of the economy.

India, today, is in a unique and powerful position to set the agenda and guide the narrative as the world begins to leverage an explosion of AI capabilities. While 2023 was the year of meteoric innovation, the coming years will see Gen AI break out from the labs and proofs of concept and into the wide plains of consumer and enterprise applications. Millions of Indian citizens stand to benefit from next-gen scaled AI applications with the most active sectors being healthcare, drug discovery, financial services, education and entertainment.

India will soon be one of the largest markets in the world and hence an ideal breeding ground for AI applications to drive the growth and productivity of enterprises. Investments, in the next leg of consumer-facing technology, next-generation supply chains and intelligent automation platforms for straight-through processing of entire processes have the potential to lead with an AI-first approach to build new tech, thus leap-frogging legacy paradigms. India has also emerged as the second-largest generator of digital data, behind only China, which gives it a massive advantage when it comes to training Gen AI models that need vast amounts of data for learning purposes. India’s historical STEM talent base and vibrant start-up ecosystem that has been nurtured to innovate faster using Gen AI further enhance this potential.

This positive prospective impact of Gen AI on economic activities and growth has led to a plethora of AI regulations taking fruit across the globe. While all countries seem to sing the same refrain of AI regulation having to strike a balance between fostering innovation while minimising harms and risks, their approaches and emphasis differ widely and have been evolving with time. Certain countries such as China and the USA are focusing on promotion and development while others such as those part of the EU are focusing on mitigating the risks posed by the implementation of this technology. The role adopted by the government in these scenarios also differs greatly.

The Indian government through Niti Aayog, its apex public policy think tank, in 2018 released the National Strategy for Artificial Intelligence #AIForAll strategy , which featured AI research and development guidelines focused on healthcare, agriculture, education, “smart” cities and infrastructure, and smart mobility and transformation. In February 2021, the NITI Aayog released Part 1 – Principles for Responsible AI , an approach paper that explores the various ethical considerations of deploying AI solutions in India, divided into system considerations and societal considerations. The system considerations deal with overall principles behind decision making and the social considerations focus on the impact of automation and job creation and employment.

Thereafter, in August 2021 Niti Ayog came out with Part 2 – Operationalizing Principles for Responsible AI , which focuses on operationalizing principles for responsible AI. The report breaks down the actions that need to be taken by both the government and the private sector, in partnership with research institutes, to cover regulatory and policy interventions, capacity building, incentivizing ethics by design, and creating frameworks for compliance with relevant AI standards.

The recent advisory from the Indian government emphasizes the need for explicit authorization from the Ministry of Electronics and Information Technology (MeitY) before deploying any unreliable Large Language Models (LLM)/Generative AI, and, measures to prevent bias and discrimination in AI deployment, marking a crucial step towards building a responsible AI ecosystem in India. Additionally, The new Digital Personal Data Protection Act, 2023 governs the processing of digital personal data in India, irrespective of its original format, and can also be utilized to tackle some of the privacy issues related to AI platforms.

Additionally, India is also a member of the Global Partnership on Artificial Intelligence (GPAI). The 2023 GPAI Summit was recently held in New Delhi, where GPAI experts presented their work on responsible AI, data governance, and the future of work, innovation, and commercialization. The partnership seeks to create deliverables that can be integrated into the national AI strategies of member states to ensure inclusive and sustainable development of such technologies. Other Indian ministries and government agencies such as the Ministry of Electronics and Information Technology, which has created committees on AI that have submitted reports on the development, safety and ethical issues related to AI . The Bureau of Indian Standards, the national standards body in February this year has released draft AI standards for public comment as well.

Despite the evolving nature of the Indian AI landscape, it has seen both local and international interest and growth in this space. An entity looking to enter the AI space in India should carefully consider the best legal route for such entry. This is particularly important in a dynamic space like AI, where regulation is constantly evolving. Issues such as liability for harm caused, rights to intellectual property for AI systems, and privacy and data protection have not been fully fleshed out in regulations.

The Central Government’s steps to regulate AI have been pro-innovation in character while developing policies and guidelines that acknowledge the ethical concerns and risks surrounding AI use and deployment and which may require the adoption of best practices. Given India’s advantage of having a robust software development industry, this is a sound approach until the government formally enacts AI regulations. India’s multifaceted initiatives signify a concerted effort to foster responsible AI deployment, marking crucial steps towards unlocking the full potential of Generative AI for economic growth.

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