AI Governance in India: The 2026 Landscape

India currently operates without a singular AI regulation statute. Unlike the EU, which enacted the comprehensive AI Act, India has taken a sector-specific and principles-based approach to AI governance. As AI adoption accelerates across industries, understanding this evolving landscape is critical.

Current Regulatory Framework

No Unified AI Law

As of 2026, India has no dedicated AI legislation. The IndiaAI Mission, launched by the government, focuses primarily on AI development and adoption rather than restriction. However, existing laws apply:

• DPDP Act 2023: Governs personal data used in AI training and inference
• IT Act 2000: Covers liability for AI-mediated communications and transactions
• Consumer Protection Act 2019: Holds AI-driven services to the same standards as traditional services
• Competition Act 2002: Applies to AI-facilitated anti-competitive practices

Sector-Specific Guidance

Several regulators have issued sector-specific AI guidance:

• RBI: Guidelines on AI/ML in financial services, particularly credit scoring and fraud detection
• SEBI: Norms for algorithmic trading and AI-driven investment advice
• IRDAI: Framework for AI in insurance underwriting and claims processing

Supreme Court and AI

The Supreme Court's February 2026 observations on AI-generated citations have created de facto governance for legal AI. The Court declared that citing AI-generated fake judgments constitutes professional misconduct, not mere error. This establishes a clear principle: the burden of verifying AI output falls on the professional using it.

Practical Considerations for Businesses

Deploying AI Systems in India

1. Transparency: While not legally mandated across sectors, transparency about AI usage builds trust and prepares for future regulation.

1. Human oversight: Maintain meaningful human review for consequential AI-driven decisions, particularly in finance, healthcare, and employment.

1. Bias auditing: Proactively test AI systems for bias, particularly in the Indian context where caste, religion, and regional factors can create discriminatory patterns.

1. Data localisation: Under DPDP requirements, ensure AI training data for Indian users remains compliant with data protection obligations.

1. Accountability: Establish clear accountability chains for AI decisions within your organisation.

Looking Ahead

India is likely to introduce more formal AI governance frameworks in the coming years. Businesses that proactively adopt responsible AI practices will be better positioned when regulation arrives.

For guidance on AI governance compliance specific to your industry, reach out to our Technology & AI Law practice.