The Government of India has recently indicated that it is considering a standalone legislation to govern Artificial Intelligence (AI). However, the pressure on the AI supply chain is already felt due to the European Union (EU)’s AI Act which was entered into force in August 2024 and became applicable on August 2, 2026.
The Act has adopted a risk-based approach to artificial intelligence (“AI”) regulation — prohibiting certain AI systems, regulating high-risk ones, and imposing lighter checks for limited-risk use cases.
Features and Changes
The devil lies in the legal consequences when an AI is updated post-approval. This recognition is a question for treaty negotiation, and India has just signed a treaty capable of carrying it. The Act was drafted with a particular picture in mind, and that picture does not match how India’s technology industry actually works. This mismatch, more than the law’s long reach, is what Indian companies should be watching. The Act assumes that software, once built and approved, is sold as a finished product. India’s technology industry has never worked that way. This distinction is not just a technicality. It would likely favour business models built on predictable product road maps. Providers of standardised AI products can assess planned upgrades during the initial assessment. Businesses that rely on bespoke services, offering competitive adaptability to individual client needs, may find it harder to demonstrate that future changes fall within the scope of the original assessment. A longer-term vision extends beyond compliance services. The Act creates a pathway for conformity assessment bodies established in third countries to be recognised and perform the functions of notified bodies, where the EU has concluded an appropriate agreement, and those bodies satisfy the requirements.
