India reverses AI stance, requires government approval for model launches

India has waded into global AI debate by issuing an advisory that requires “significant” tech firms to get government permission before launching new models.

India’s Ministry of Electronics and IT issued the advisory to firms on Friday. The advisory — not published on public domain but a copy of which TechCrunch has reviewed — also asks tech firms to ensure that their services or products “do not permit any bias or discrimination or threaten the integrity of the electoral process.”

Though the ministry admits the advisory is not legally binding, India’s IT Deputy Minister Rajeev Chandrasekhar says the notice is “signalling that this is the future of regulation.” He adds: “We are doing it as an advisory today asking you to comply with it.”

In a tweet Monday, Chandrasekhar said the advisory is aimed at “untested AI platforms deploying on the India internet” and doesn’t apply to startups.

The ministry cites power granted to it through the IT Act, 2000 and IT Rules, 2021 in its advisory. It seeks compliance with “immediate effect” and asks tech firms to submit “Action Taken-cum-Status Report” to the ministry within 15 days.

The new advisory, which also asks tech firms to “appropriately” label the “possible and inherent fallibility or unreliability” of the output their AI models generate, marks a reversal from India’s previous hands-off approach to AI regulation. Less than a year ago, the ministry had declined to regulate AI growth, instead identifying the sector as vital to India’s strategic interests.

India’s move has taken many industry executives by surprise. Many Indian startups and VCs say they have been spooked by the new advisory and believe such regulation will hinder the nation’s ability to compete in the global race, where it is already lagging behind.

“I was such a fool thinking I will work bringing GenAI to Indian agriculture from SF,” wrote Pratik Desai, founder of startup Kisan AI. “We were training multimodal low cost pest and disease model, and so excited about it. This is terrible and demotivating after working 4yrs full time brining AI to this domain in India.”

Many Silicon Valley leaders also criticized India’s policy shift. Aravind Srinivas, co-founder and chief executive of Perplexity AI, one of the hottest AI startups, said the new advisory from New Delhi was a “bad move by India.”

Martin Casado, a partner at venture firm Andreessen Horowitz, said, “Good fucking lord. What a travesty.”

The advisory follows Chandrasekhar expressing his disappointment in a certain response by Google’s Gemini last month. A user last month asked Gemini, previously known as Bard, whether India’s PM Narendra Modi was a fascist.

In response, Gemini — citing experts it didn’t identity — said Modi had been accused of implementing policies that some had characterised as fascist. Chandrasekhar reacted to the exchange by warning Google that such responses were “direct violations” of the IT Rules, 2021 as well as “several provisions of the Criminal Code.”

Non-compliance with the provisions of the IT Act and IT Rules would result in “potential penal consequences to the intermediaries or platforms or its users when identified,” the advisory adds.