REGULATION OF AI IN INDIA: LEGAL CHALLENGES AND THE ROAD AHEAD

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Published on: 23rd January 2026

Authored by: Keerthana N
Christ (deemed to be) University

Abstract

India​‍​‌‍​‍‌ witnesses an escalating use of artificial intelligence (AI) across various sectors that include healthcare, finance, and governance. Nevertheless, the Indian judicial system relies on fragmented sector-specific regulations rather than a comprehensive AI law. This research paper examines the various challenges the Indian government faces in regulating AI, including constitutional concerns, algorithmic accountability, privacy, liability, intellectual property, and enforcement gaps. The article compares international policies and argues for the necessity of an adaptable, domain-agnostic regulatory framework as a matter of urgency. The future journey is characterised by the challenge of maintaining a balance between innovation and the protection of rights, ethical principles, and public welfare.​

Keywords: Artificial Intelligence, Legal Regulation, India, Data Privacy, Algorithmic Accountability

Introduction

Artificial Intelligence (AI) is reshaping the Indian economy, administration, and society at a breathtaking pace. The use of AI for personalised medicine, as well as for instant loans and automated legal advice, is just the beginning. AI systems are now at the core of decision-making processes that significantly change the way we live. However, the current legal framework is insufficient in addressing the problems arising specifically from the risks associated with the autonomous decisions of AI, the processing of vast amounts of data, and AI-generated content. The recognition of these problems is evident in recent policy advisories and court interventions, but the legislative and regulatory responses are still at the nascent stage and lack ​‍​‌‍​‍‌coordination.[1]

1.​‍​‌‍​‍‌ Legal Perspectives on AI Regulation

Existing Legal Frameworks

The foremost laws of India that apply to AI are the Information Technology Act, 2000, and the Digital Personal Data Protection Act, 2023 (DPDP Act). Both laws establish digital infrastructure and data privacy as their main topics. However, they do not contain detailed measures regarding algorithmic governance, the accountability of autonomous systems, or the ethical standards of AI development. The RBI, SEBI, and ICMR are sectoral agencies that have issued AI-related guidelines for banking, securities, and health, respectively, but the regulatory silos have been maintained.[2]

Constitutional Dimensions

One of the most significant legal questions is whether AI conforms to the constitutional rights, especially those related to privacy, equality, and non-discrimination. In K.S. Puttaswamy v. Union of India (2017), the Supreme Court made the landmark ruling that privacy is a fundamental right guaranteed under Article 21. At the same time, the use of AI for unrestricted observation and data collection conflicts with these rights, which often do not include proportionate and explicit consent mechanisms. Discrimination in the algorithmic treatment of certain groups of people is also a violation of Articles 14, 15, and 16, which provide for equality and fair treatment under the law. Algorithms should not discriminate against groups protected under the law since this would infringe upon the constitutional rights of privacy, equality, and non-discrimination put forward in the case of K.S. Puttaswamy v. Union of India (2017). The court hereby established the constitutional right to privacy, which is very important for AI systems that handle sensitive personal data. In the case of Anil Kapoor v. Unknown (Delhi High Court, 2023), the Court granted protection against AI-based deepfakes for image and personality rights and thereby established a legal framework against the misuse of one’s likeness and the commercial exploitation of it. OpenAI Copyright Infringement Case (2025) dealt with the issue of the unauthorised use of copyrighted materials for AI training, thereby making intellectual property rights the foreground for future changes in that regard.[3]

Challenges in Admissibility

The Indian Evidence Act, 1872, has not yet defined the conditions under which evidence produced by AI can be accepted. This lack of definition results in issues being raised in judicial proceedings with regard to the authenticity and reliability of data when such is ​‍​‌‍​‍‌challenged.

2.​‍​‌‍​‍‌ Key Legal Challenges

Absence of Specialised Legislation

India does not have one single unified law that applies to all domains and is solely meant for the regulation of AI. Theme-wise laws create different frameworks, and the law enforcement agencies have little knowledge about the proper implementation of these frameworks. The DPDP Act and IT Act are pieces of legislation that only marginally and partially regulate the area; they do not cover autonomous decision-making, algorithmic explainability, or the attribution of responsibility in AI mistakes.[4]

Liability and Responsibility

Generally, the main ideas of traditional tort law, such as indirect and strict liability, cannot be convincingly applied in the case of damage caused by autonomous systems. In the situation of injury or an error in the algorithm, considerable ambiguity exists concerning the assignment of AI developers, operators, or end-users as the party responsible for the incident.[5]

Algorithmic Bias and Discrimination

If the data used for the training of AI models is biased and the models are used in a completely black-box manner, then discrimination may be reinforced, and this is particularly the case if the models are implemented in such fields as employment, lending, and criminal justice. India doesn’t have laws or regulations that would require auditing of algorithmic processes or remediation of biases induced by AI.[6]

Data Protection and Privacy

Most of the time, AIs work with enormous amounts of data, which are not only personal but also behavioural in nature, raising the possibility of privacy intrusions. Although the DPDP Act provides certain safeguards, it struggles with enforcement and scope, while government exemptions have provoked criticism that they erode the most fundamental of rights.[7]

Intellectual Property Concerns

Issues about who will own AI-generated content and whether it is legal to use copyright-protected material for AI training still lurk in the background. The OpenAI case has brought these debates to the forefront, but the statutory norms are still not clear.[8]

Personality Rights and Deepfakes

The ability of AI to generate hyper-realistic deepfakes brings new problems in the area of personality rights and image protection. Court intervention, like in the case of Anil Kapoor v. Unknown, serves as a safeguard for people against non-consented commercial use; nonetheless, legislation has yet to come up with the answer.

Enforcement and Institutional Capacity

The regulatory bodies that are supposed to enforce AI-related laws do not have enough skilled personnel and money to competently carry out tasks such as monitoring, auditing, and enforcing. At present, the speed at which innovations appear is beyond the institutional capacity for ​‍​‌‍​‍‌supervision.[9]

3.​‍​‌‍​‍‌ Comparative and International Approaches

Around the world, regulatory frameworks are changing to handle the risks of AI. The artificial intelligence legislation of the European Union implements a risk-based regime with compulsory inspections, openness norms, and prohibition of certain sectors for specific high-risk usage. The UK and the US are inclined towards industry self-regulation and governance based on principles, whereas China is moving towards a combination of legal and state control. India has to coordinate its internal regulations with the standard global standards to be compatible with the rest of the world and to be able to ​‍​‌‍​‍‌compete.​

4.​‍​‌‍​‍‌ Recommendations and Suggestions

Comprehensive AI Legislation

Such a response from the legislature at the central level is non-negotiable: a single law on AI needs to be passed by India. This legislation should recognise that AI risks are varied and that the obligations imposed should be graded. The Government should make legislative interventions in the following areas:

  • Defining the use of AI by identifying AI applications that pose the most risk.
  • Requiring algorithmic transparency and regular audits for systems that are considered high-risk.
  • Developing explainability methods that will enable users to challenge automated decision-making.
  • Identification of changes in the forms of AI designers, deployers, and users to whom the AI liability will be ascribed.
  • Measures aimed at providing support to those who suffer from the negative consequences of AI.
  • Measures that aim to harmonise the integration of privacy-by-design, right to erasure, and correction for AI data processing according to DPDP with existing legislation provisions.[10]

Regulatory Institution Building

A national AI regulator (for instance, AI Ethics and Governance Authority) with extensive technical and legal knowledge should be established. This will facilitate the consistent interpretation of rules and enforcement of the law. The regulator should collaborate with other agencies that are responsible for different sectors, facilitate standardisation of the implementation of the law, and help in increasing the technical capacities of organisations.[11]

Ethical Guidelines and Stakeholder Participation

Among others, ethical AI principles based on justice, transparency, respect for human autonomy, and non-discrimination should be at the core. Reform in law should be the result of consultations with the public, which also includes participation of the industry and engagement of the civil society. This way, trust will be gained between the regulator and regulatees, and it will be easier to implement the ​‍​‌‍​‍‌law.[12]

Intellectual Property Reform

There is an urgent need to clarify legal standards around AI-generated works, use of copyrighted data in model training, and liability for violations. India should look to international best practices, consider moral rights, and adapt copyright protection analytically to new technological contexts.​[13]

Deepfake and Personality Rights Legislation

Parliament should codify remedies against unauthorised use of likeness and deepfake creation, consolidating privacy, reputation, and commercial interests.​

Judicial Education and Evidence Standards

Courts must be trained to engage with AI-generated evidence and develop evolving standards for admissibility and reliability, referencing both scientific and global legal precedent.​

International Engagement

India should collaborate with global standards bodies such as OECD, IEEE, and UN platforms to harmonise AI governance, encourage innovation, and protect stakeholder interests.[14]​

Conclusion

India’s regulatory landscape for AI remains fragmented and reactive, challenged by rapid technological change and expanding application domains. Current statutes and sectoral advisories offer limited and piecemeal solutions, largely inadequate for the scale or complexity of emerging AI risks. Legal reform is urgently needed, enacting a comprehensive AI law, a specialised regulator, robust privacy and fairness safeguards, and mechanisms for accountability and compensation. Broad, participatory approaches rooted in ethics, constitutional values, and international cooperation will define India’s success in balancing innovation with rights protection and public welfare. The future of AI regulation hinges on translating legal recognition into effective remedies and adapting dynamically to evolving risks and opportunities.​[15]

References

 

[1]  “Legal Challenges In Regulating Artificial Intelligence In India” Lawful Legal (2025) https://lawfullegal.in/legal-challenges-in-regulating-artificial-intelligence-in-india/ accessed 16 November 2025.

[2] ‘Regulation of Artificial Intelligence in India: Legal Challenges and the Road Ahead’ SSRN https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4491771 accessed 16 November 2025.

[3] Astha Ojha, AI & Copyright in India: Law, Policy, and the Future of Creative Rights (National e-Governance Division, Ministry of Electronics & Information Technology, October 2025) https://negd.gov.in/wp-content/uploads/2025/10/Astha-Ojha-AI-Copyright-in-India-Bridging-the-Digital-Divide.pdf accessed 16 November 2025.

[4] ‘India’s Advance on AI Regulation’ Carnegie Endowment for International Peace (20 November 2024) https://carnegieendowment.org/2024/11/20/india-s-advance-on-ai-regulation-pub-92844 accessed 16 November 2025.

[5] Regulation of Artificial Intelligence in India: Legal Challenges and the Road Ahead’ SSRN https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4491771 accessed 16 November 2025.​

[6] ‘Legal Challenges In Regulating Artificial Intelligence In India’ Lawful Legal (20 June 2025) https://lawfullegal.in/legal-challenges-in-regulating-artificial-intelligence-in-india/ accessed 16 November 2025.

[7] Kshitija Kashik, Navigating the Future: India’s Strategic Approach to Artificial Intelligence Regulation (National Centre for Good Governance, Ministry of Personnel, Public Grievances & Pensions, Government of India 2023) https://ncgg.org.in/sites/default/files/lectures-document/Kshitija_Kashik__Research_Paper.pdf accessed 16 November 2025.

[8] Astha Ojha, AI & Copyright in India: Law, Policy, and the Future of Creative Rights (National e-Governance Division, Ministry of Electronics & Information Technology, October 2025) https://negd.gov.in/wp-content/uploads/2025/10/Astha-Ojha-AI-Copyright-in-India-Bridging-the-Digital-Divide.pdf accessed 16 November 2025.

[9] ‘India AI Governance Guidelines: Empowering Ethical and Responsible AI Innovation’ IndiaAI.gov.in (4 November 2025) https://indiaai.gov.in/article/india-ai-governance-guidelines-empowering-ethical-and-responsible-ai-innovation accessed 16 November 2025.​

[10] ‘India’s AI Governance Guidelines Report: A Medley of Approaches’ TechPolicy Press (15 January 2025) https://techpolicy.press/india-ai-governance-guidelines-report-a-medley-of-approaches/ accessed 16 November 2025.

[11] ‘India’s Advance on AI Regulation’ Carnegie Endowment for International Peace (20 November 2024) https://carnegieendowment.org/2024/11/20/india-s-advance-on-ai-regulation-pub-92844 accessed 16 November 2025.

[12] ‘India’s AI Governance Guidelines Report: A Medley of Approaches’ TechPolicy Press (15 January 2025) https://techpolicy.press/india-ai-governance-guidelines-report-a-medley-of-approaches/ accessed 16 November 2025.

[13] Astha Ojha, AI & Copyright in India: Law, Policy, and the Future of Creative Rights (National e-Governance Division, Ministry of Electronics & Information Technology, October 2025) https://negd.gov.in/wp-content/uploads/2025/10/Astha-Ojha-AI-Copyright-in-India-Bridging-the-Digital-Divide.pdf accessed 16 November 2025.

[14] Nayan Awasthi and Aman Pandey, ‘India’s AI Governance Gap: Risks, Remedies and the Road Ahead’ (Bharti Institute, Indian School of Business, 22 September 2025) https://blogs.isb.edu/bhartiinstitute/2025/09/22/indias-ai-governance-gap-risks-remedies-and-the-road-ahead/ accessed 16 November 2025.

[15] Harshit Bidhuri, ‘Regulating Artificial Intelligence in India: Bridging the Legal Vacuum’ (2025) 11(4) International Journal of Law 112 https://www.lawjournals.org/assets/archives/2025/vol11issue4/11086.pdf accessed 16 November 2025.

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