Artificial Intelligence (AI) is rapidly transforming economies and societies worldwide, and India is no exception. As one of the fastest-growing economies and a global hub for technology and innovation, India is uniquely positioned to harness the potential of AI for inclusive growth and    development. From healthcare and education to transportation and governance, AI is driving innovation and efficiency. However, as AI systems become more pervasive, the ethical implications of their deployment are coming under intense scrutiny. Public policy plays a critical role in ensuring that AI development and deployment align with societal values, protect individual rights, are equitable, and uphold the nation’s values and aspirations.

The foundation of Artificial Intelligence (AI) was laid down in the mid-20th century, where John McCarthy coined the term at the 1956 Dartmouth Conference in US. Early pioneers like Alan Turing, John McCarthy, and Marvin Minsky explored the idea of creating machines capable of mimicking human intelligence. The need for AI arises from its potential to solve complex problems, automate repetitive tasks, and addresses challenges that are beyond human capability.

India has been progressively integrating Artificial Intelligence (AI) into public policy and governance over the past decade, with significant momentum building in recent years. The journey began in 2017 when NITI Aayog, India’s policy think tank, released a discussion paper titled “National Strategy for Artificial Intelligence,” highlighting AI’s potential in key sectors like healthcare, agriculture, and smart cities. By 2018, NITI Aayog partnered with tech giants such as Google, Microsoft, and IBM to pilot AI-driven projects, including crop yield prediction and early disease detection. The Ministry of Electronics and Information Technology (MeitY) further institutionalized these efforts in 2019 by forming AI task forces to explore governance frameworks, skilling initiatives, and cybersecurity. The Responsible AI for Social Empowerment (RAISE) 2020 summit marked a major push toward ethical AI adoption in public services. Since then, AI has been increasingly deployed in predictive policing, welfare scheme optimization, traffic management, and digital public infrastructure (like Aadhaar and UPI), positioning India as a growing leader in AI-driven governance. This progress, however, has simultaneously sparked significant ethical dilemmas. Issues such as data privacy violations, inherent algorithmic biases, heightened surveillance, workforce disruption, and ambiguous accountability have become more pronounced, often unfolding with limited human intervention.

One of the most pressing ethical challenges in the Indian context is the risk of bias and discrimination in AI systems. AI algorithms are only as good as the data they are trained on, and in India, where caste, gender, and regional disparities are deeply entrenched, biased data can perpetuate existing inequalities. For example, an AI-based loan approval system might disadvantage applicants from lower-income backgrounds or minority communities if the training data reflects historical biases. Privacy concerns is another critical issue in the ethical deployment of AI in India. India has taken a significant step forward with the introduction of the Digital Personal Data Protection Act, 2023, which aims to safeguard individual privacy and regulate the collection and use of personal data. However, the implementation of this law will be crucial to ensuring that AI systems comply with data protection standards. For instance, the widespread use of AI in surveillance, such as facial recognition systems in cities like Delhi and Hyderabad, raises concerns about individual privacy and state overreach. Another major challenge with AI is its “black box” nature—decisions made by AI systems are often opaque and cannot be easily explained or contested. This is particularly concerning in critical areas like criminal justice, banks, or healthcare. For example, if a bank uses AI to deny a loan to a farmer in a rural village, it is vital to provide an explanation that the individual can understand and contest if necessary. Another critical area where public policy can make a difference is by bridging the digital divide. While AI has the potential to drive inclusive growth, it could also widen the gap between urban and rural areas, as well as between different socio-economic groups. For instance, rural areas and marginalized communities may lack the infrastructure, skills, and access needed to benefit from AI-driven solutions. The potential for job displacement due to AI-driven automation is another significant concern in the Indian context. While AI can create new opportunities, it could also render certain jobs obsolete, particularly in sectors like manufacturing, retail, and transportation. For example, the adoption of AI-powered chatbots and automation tools in customer service could lead to job losses for low-skilled workers.

To address the concern of risk of bias and discrimination, public policy must mandate transparency and accountability in AI systems. This could involve requiring developers to disclose the datasets and algorithms used in AI systems and conducting regular audits to identify and mitigate biases. The government could also establish guidelines for the ethical use of AI in sensitive areas like hiring, lending, and law enforcement, ensuring that these systems do not reinforce societal inequalities. For dealing with the privacy concerns, policymakers must address these by strengthening data protection frameworks and ensuring that AI applications respect individual privacy rights. Further the public policy should encourage the development of explainable AI systems and set standards for algorithmic transparency. This could involve requiring organizations to provide clear explanations for AI-driven decisions and establishing mechanisms for individuals to challenge these decisions if they believe they are unfair or incorrect. To bridge the gaps of digital divide across the socio-economic spectrum, initiatives like Digital India and BharatNet, which aim to improve internet connectivity across the country, are steps in the right direction. However, more needs to be done to ensure that these initiatives reach the last mile and that digital literacy programs are implemented effectively. Public policy must focus on building digital infrastructure, promoting affordable internet access, and providing training programs to equip individuals with the skills needed to thrive in an AI-driven economy. Furthermore, to tackle the challenge of job displacement public policy must focus on upskilling and reskilling the workforce. Programs like the National Skill Development Mission and Pradhan Mantri Kaushal Vikas Yojana (PMKVY) should incorporate AI-related skills training to ensure that workers are prepared for the jobs of the future. Additionally, policymakers should explore ways to create new employment opportunities in AI-related fields, such as data annotation, AI ethics, and algorithm auditing.

Fostering innovation while ensuring ethical compliance is a delicate balance that Indian policymakers must navigate. While regulation is necessary to address the ethical challenges of AI, it should not stifle innovation. India’s thriving startup ecosystem, which includes AI-focused companies like Zoho and Niramai, is a testament to the country’s potential as a global leader in AI innovation. To support this ecosystem, policymakers can create a conducive environment for AI development by promoting research and development, providing funding and incentives for startups, and establishing sandboxes for testing AI solutions in controlled environments. For example, the Reserve Bank of India (RBI) has already set up a regulatory sandbox for fintech innovations, which could serve as a model for other sectors.

International collaboration is another important aspect of ethical AI governance. India has emerged as a key player in the global discourse on ethical and inclusive Artificial Intelligence (AI), actively contributing to frameworks that promote responsible innovation. As a founding member of the Global Partnership on Artificial Intelligence (GPAI)—a multistakeholder initiative by OECD involving governments and experts—India has played a leadership role by co-chairing working groups on Responsible AI, Data Governance, and Future of Work. India also hosted the GPAI Summit in New Delhi in 2023, wherein it emphasized upon “AI for All,” advocating for equitable and inclusive access to AI technologies, especially for the Global South.

AI holds immense potential to drive India’s growth and development, but its ethical implications require due consideration. Public policy is the cornerstone of building a responsible AI ecosystem that prioritizes fairness, transparency, and inclusivity. However, ethical AI governance cannot be the sole domain of governments. Academia, civil society, industry, and technologists must come together to co-create policies. Moreover, public discourse on AI must be deepened. Citizens should be informed about how AI affects their rights, opportunities, and choices. A democratically negotiated AI future demands participatory policymaking, based on trust. As India navigates this transformative journey, it must remain committed to its core values of democracy, diversity, and social justice. The path to ethical AI is complex, but with thoughtful policy and collective effort, India can emerge as a global leader in responsible AI innovation.