India’s AI Governance Framework; A Neo-Realist Approach or a Liberal Regulatory Model

Introduction

Artificial intelligence (AI) is the term used to describe the simulation of human intellect in robots that are designed to mimic human cognitive abilities and think like humans. Any machine that demonstrates characteristics of a human mind, like learning and problem-solving, can also be referred to as artificial intelligence. [1] Artificial intelligence (AI) has the potential to disrupt nearly every area of human existence by replicating the cognitive processes of the human mind in order to solve problems or simply learn. This intelligence component is sometimes aptly referred to as "machine intelligence," wherein a machine is designed to exhibit human intellect in contrast.[2]

Artificial intelligence (AI) has advanced significantly in India and is not a recent phenomenon. Many computer scientists like Alan Turing, Marvin Minsky, and John McCarthy have built much of its theoretical and technological foundation over the previous 70 years. It is transforming critical infrastructure like the industries including healthcare, agriculture, banking, and education. AI is developing quickly due to rise in the number of government programs like the National Strategy for AI and a booming startup community. In the AI ecosystem, India is establishing itself as a worldwide leader. However, a number of crucial requirements must be fulfilled before implementing AI solutions on a large scale, especially in crucial industries like agriculture. To ensure smooth data collection and processing, a strong digital infrastructure must first be developed throughout rural areas. This entails making sure that everyone has access to smart devices, ensuring that the internet is widely available, and giving people the training they need to use AI tools efficiently.[3] 

Economic Significance of AI and AI Policies Worldwide

With over USD 31 billion invested globally in over 3,600 announced deals over the last five years, AI continues to be the most active sector vertical in the VC investing landscape. With USD 2.5 billion in venture capital investments over the past five years, primarily from medical imaging and diagnostics firms, healthcare has been the most popular sector for AI startup funding. Clinical trials, medication research, insights, and risk analytics are further active healthcare subsectors. Strong public partnerships in diagnostics, such as those between VIDIA and GE, Google Deep Mind and NHS, and Ali Health and AstraZeneca, have also dominated the healthcare AI field.[4]

As nations throughout the world strike a balance between the need to manage heightened competition and past pledges to promote international alignment and cooperation on AI governance and safety, the global AI governance environment continues to change. Accelerated investment in domestic AI infrastructure has started to create a more competitive international environment as many governments have recognized the strategic implications of AI for both economic growth and national security. However, realizing the economic benefits of AI while successfully managing the technology's hazards still depends heavily on international trade and worldwide cooperation. Jurisdictions are handling the conflicts between competitive and cooperative agendas as high-level AI principles are translated into specific policies and regulatory frameworks. The AI governance throughout the world project tracks primary source policy initiatives over the last ten years, providing insight into evolving national AI goals, cooperative and competitive dynamics, and possible areas of international alignment.[5]

For budgetary planning of AI interventions, strategy formulation, and policy drafting, the majority of governments have created or made use of an already-existing centralized umbrella agency. The Strategic Council for AI Technologies in Japan, the National Science and Technology Council in the United States, and the AI Council in the United Kingdom are nodal organizations for organizing and creating AI projects. Ministers, business representatives, and academic nominees usually make up these central bodies; for example, the UAE has a Minister of State for AI. Likewise, in regard to the execution and provision of AI projects.[6]

Realism and AI Governance in India

Competition and conflict are intrinsic to the interstate system, according to realist foreign policy, which places a high priority on national security and the protection of national interests. Realists frequently distinguish between the ideals of idealism and the application of hard power, such as military and political domination. They also hold that nation states are independent entities with the only right and authority to employ force in situations that are primarily characterized by chaos on a global scale. Realist theory holds that sovereign states, each acting in their own rational self-interest within this anarchic context, are the main actors in the international arena. In the ongoing struggle for power and dominance in world politics, political leaders and policymakers, driven by the pursuit of national interest, employ rational tools such as diplomacy and economic power and, ultimately, resort to military intervention to achieve the objectives of power politics and strategic dominance.[7]

In the context of artificial intelligence governance, our nation is clearly enforcing its national interest and moving away from the traditional canons of idealism. Vice President Jagdeep Dhankhar has emphasized that global politics is driven by realism rather than morality, which is reflected in India’s regulatory approach to AI. Instead of adopting a strict risk-mitigation framework such as the one followed by the European Union, India has developed its own pro-innovation framework but with certain regulatory guardrails, which establishes the presence of global competition and a form of cold conflict. Furthermore, state-led governance rather than voluntary cooperation or self-regulation also inclines towards realism. This is clearly visible in India’s Techno-Legal Approach wherein India is leveraging conventional laws like the IT Act, 2000 (This Act provides key tools for governing online content, including AI generated deepfakes and misinformation) , the DPDP Act and Rules  (this act governs how entities handle personal data, which directly impacts AI systems that process such data), AISI (A technical body tasked with risk assessment, research, and developing safety standards, which effectively become the compliance baseline for entities involved in the government's "India AI Mission") and AIGG (Coordinates national AI policy across various ministries). 

Liberalism and AI Governance in India

A fundamental tenet of market liberalism is that all interactions between individuals should be consented to. In a regime of freedom, each person is free to pursue their own pleasure, subject only to the equal liberty and rights of others.  Value-for-value trading is the ideal form of economic engagement. Property rights, equality of rights before the law, and depoliticized markets characterize the economy of a properly liberal society. The only system that permits pluralism, or people pursuing opposing sets of ideals, is liberalism. The role of the state is to permit the free flow of products, services, and ideas rather than to impose a single set of values on everyone. Every group in society is equally protected, but no group's values are elevated above those of the others. The most fundamental right, the freedom to think for oneself, is respected by liberalism. Instead of trying to manipulate the mind, it lets people make the most of their capacity for reason.[8]

Although one may contest against the argument of realist inclined governance, claiming that the basis of India AI Governance Guidelines (Nov 2025) is public welfare, because of it being based on seven sutras of Trust, People First, Innovation over restraint, fairness, equity, accountability, design understanding and safety. The guidelines were announced ahead of the India-AI Impact Summit 2026 as India strengthens its leadership in responsible AI governance. The India AI Governance Guidelines are comprised of four key Components which are the seven guiding principles (Sutras) for ethical and responsible AI, key recommendations across six pillars of AI governance, an action plan mapped to short, medium, and long-term timelines, practical guidelines for industry, developers, and regulators to ensure transparent and accountable AI deployment. Thence, one may say that India has followed a liberal regulatory model which is indicated by promotion of market capitalism in AI Industry carried on by the Indian government. The framework strongly encourages industry-led self-regulation and utilizes "regulatory sandboxes" where companies can test innovative solutions in a live environment with reduced regulatory oversight.

Conclusion

Taking into account, the aforesaid factors, it is impractical to put Indian framework in either the bucket of realism or a liberalism driven move, unless a standalone statute is enacted for the same. Untill then, it can be understood as a hybrid model, in order to test possibilities in this field and understand what suits best in a democracy like India. This hybrid framework is either anticipated to serve as the very foundation of AI Industry’s boom in India’s global market  or it may hamper development and drafting of a much awaited fruitful legislation by creating confusion or division of opinion amongst the legislators.

The lack of a singular comprehensive framework is also a challenge to existing liability and governance regime in this field in India. This is giving rise to disputes in various sectors. For instance, in the case of ANI Media (P) Ltd. v. OpenAI Inc (Delhi HC) the court noted that Indian copyright law does not currently offer explicit exemptions for commercial AI training. The government's Department for Promotion of Industry and Internal Trade (DPIIT) has clarified that developers must seek authorization to use copyrighted content for commercial AI training. A more comprehensive law, the proposed Digital India Act, is expected around 2026 and aims to modernize the entire digital governance framework, likely providing a clearer, more robust legal basis for AI regulation down the line.[9]

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 This blog has been authored by Kashish Khanna, a student of PG Diploma at National Law University, Delhi.

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REFERENCES

[1] Telecommunication Engineering Centre, Artificial Intelligence (AI) Policies in India – A Status Paper 3 (Aug. 2020), https://www.tec.gov.in/pdf/Studypaper/AI%20Policies%20in%20India%20A%20status%20Paper%20final.pdf

[2] Supra Note 1.

[3] Sauradeep Bag, Balancing Ambition With Realism: The Role of AI in Development, ORF Expert Speak (Jul. 29, 2024), https://www.orfonline.org/expert-speak/balancing-ambition-with-realism-the-role-of-ai-in-development

[4] Artificial Intelligence Trends to Watch in 2018, CB Insights (Feb. 14, 2018), https://www.cbinsights.com/research/report/artificial-intelligence-trends-2018

[5] The Alan Turing Institute, AI Governance Around the World (Jan. 18, 2026),

https://www.turing.ac.uk/research/research-projects/ai-governance-around-world

[6] NITI Aayog, National Strategy for Artificial Intelligence: #AIforAll (June 27, 2018), https://www.niti.gov.in/sites/default/files/2023-03/National-Strategy-for-Artificial-Intelligence.pdf

[7] Michael Desch, An Introduction to Realism in International Relations, O’Brien Notre Dame International Security Center (Oct. 20, 2025), https://ondisc.nd.edu/news-media/news/an-introduction-to-realism-in-international-relations/

[8] James Peron, Championing Liberty: The Essence of Market Liberalism, Free Market Foundation (Aug. 2, 2024), https://freemarketfoundation.com/championing-liberty-the-essence-of-market-liberalism/

[9] NITI Aayog, National Strategy for Artificial Intelligence: #AIforAll (June 27, 2018), https://www.niti.gov.in/sites/default/files/2023-03/National-Strategy-for-Artificial-Intelligence.pdf