India Advocates for Balanced AI Regulations to Foster Innovation

September 16, 2025
Finance Minister Nirmala Sitharaman emphasizes the need for AI regulations that encourage innovation without stifling technological progress, following the release of a NITI Aayog report.

Finance Minister Nirmala Sitharaman has highlighted the importance of establishing regulations that promote the responsible use of artificial intelligence (AI) while fostering innovation. This statement follows the release of a report by NITI Aayog, which outlines AI's potential to significantly boost India's economic growth.

The report, titled 'AI for Viksit Bharat', projects that AI could contribute an additional $500-600 billion to India's GDP by 2035 through enhanced productivity and efficiency. It also notes that AI adoption could add $17-26 trillion to the global economy over the next decade.

Sitharaman emphasized that regulations should not hinder technological advancement but rather ensure its responsible application. She advocated for a regulatory approach that keeps pace with the rapid development of AI technologies, using sandboxes as testing grounds to balance innovation with necessary oversight.

The report also addresses potential challenges, such as job displacement, particularly in clerical and low-skill sectors. It suggests that AI could significantly impact financial services and manufacturing, potentially attributing 20-25% of their sectoral GDP to AI by 2035.

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