India's AI Governance Strategy Needs a New Paradigm: Balancing Regulations with Resilience

India Grapples with AI Governance: A Call for Broader Conversation

Key Developments:

• The Indian government has introduced draft amendments to the IT Rules 2021, which propose regulations for Synthetically Generated Information (SGI).
• The proposed framework focuses on user safety, platform responsibility, and labelling, traceability, and accountability related to SGI.
• However, the approach is largely confined to intermediary liability, raising questions about its sufficiency in addressing the complexities of generative AI systems.

Misaligned Liability in a Fragmented AI Value Chain

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• Traditional internet regulation is being challenged by the rise of generative AI, which complicates the clear roles of users, platforms, and the law.
• The Principal Scientific Advisor's report on India's AI Governance Guidelines noted that existing legal categories do not adequately reflect the structure of modern AI systems.
• A more resilient governance approach is needed, recognizing differentiated responsibility among AI developers, creators, publishers, and platforms.

Responsibility Assignment and Institutional Responses

• The framing of obligations under the law shapes institutional responses, with broad obligations and high uncertainty leading to conservative enforcement practices.
• In the context of generative AI, responsibility design is crucial in determining how speech is governed in practice.
• Over-compliance can result in a general tightening of content controls, rather than targeted intervention against harmful deepfakes.

Protecting Innovation and India's Creator Economy

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• India's creator economy has emerged as a significant driver of digital inclusion, employment, and cultural expression.
• Millions of Indians rely on digital platforms to create content, educate audiences, and build sustainable livelihoods, often using AI-enabled tools.
• Treating all AI-enabled content as inherently suspicious may impose disproportionate compliance burdens on smaller creators and MSMEs.

Key Recommendations:

• Consider a more resilient governance approach that recognizes differentiated responsibility among AI developers, creators, publishers, and platforms.
• Focus on enabling transparency tools and responding to substantiated complaints.
• Account for formal legal responsibility and behavioural incentives that regulations may create.
• Protect innovation and India's creator economy by avoiding disproportionate compliance burdens on smaller creators and MSMEs.