New Delhi | 22 July 2025 | ⏱️ 4 min read
Summary:
India is finally moving to regulate Artificial Intelligence. But as new rules take shape, Indian startups are asking: are we building a future for innovation—or over-regulating it before it begins?
India’s tech space has rarely moved this fast. The Centre is preparing to roll out a Code of Conduct for AI—meant to ensure that companies use artificial intelligence responsibly, ethically, and with safeguards.
हिंदी में पढ़े : AI Regulations India 2025: क्या नया AI कानून, छीन लेगा Indian Startups की आज़ादी ?
AI Regulations India 2025: Is India’s AI Law Meant to Guide or Guard?
At the core, the idea isn’t controversial. Nobody wants AI to spread misinformation, manipulate elections, or generate deepfakes without checks.
But the draft code, still under discussion, has sparked an unexpected debate: will this new framework also end up tying the hands of India’s youngest and most promising AI startups?
Because that’s where the tension lies—not in the intent, but in the execution.
The Law Before the Leap
India doesn’t have a specific AI law yet. But regulation is coming in layers:
- The government recently warned platforms not to release generative AI tools without proper testing or safeguards.
- The Digital India Act, expected this year, will include new AI-related clauses.
- There’s talk of dataset transparency, bias audits, and even licensing for large models.
Behind closed doors, ministries are already drafting what’s being called a “National AI Framework.” But while the government sees it as future-proofing, developers see roadblocks.
What Could the New Code Actually Demand?
Here’s what insiders say the proposed rules may include:
- Government vetting before launching powerful AI models
- Mandatory content labelling for anything AI-generated
- Transparent datasets—no more “trained on the internet” loopholes
- Audit trails to trace AI decisions
- User consent requirements
- Special protections for children and marginalised groups
Fair on paper, but startups fear the grey areas: What qualifies as a “powerful model”? Will open-source projects be allowed? Who decides what counts as “safe enough”?
Founders Are Already Looking Abroad
Some Indian AI founders say they’ve had to pause launches while they wait for policy clarity. Others are quietly shifting operations overseas—Singapore, Dubai, even London—where regulations are clearer or more startup-friendly.
“If this becomes a license raj for AI, we’re back to the 80s,” said one Bengaluru-based founder, requesting anonymity. “We want rules, but not rules that choke ideas in the garage.”
The Bigger Question: Control or Collaboration?
Regulating AI is necessary. But how it’s done will decide whether India leads the AI race—or watches it from the sidelines.
What startups want isn’t a free pass. It’s clarity, consultation, and a roadmap that supports builders, not just compliance officers.
Because when innovation slows, India loses more than code—it loses time.
Disclaimer: This image is AI-generated and does not depict a real photograph of the event.
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