India Shifts Toward Risk-Based AI Legislation to Govern Emerging Technologies

India is pivoting toward a comprehensive, risk-based legal framework to govern artificial intelligence, marking a departure from its previous stance that a standalone statute was unnecessary. An official confirmed on July 6, 2026, that the proposed law will categorize AI systems by their inherent risk levels, ensuring that low-risk tools like productivity software face minimal oversight while high-risk applications in finance and healthcare undergo rigorous scrutiny.

The draft legislation is expected to grant the state significant emergency powers, allowing authorities to mandate the shutdown of AI systems or demand the disclosure of technical specifications during national crises. This move aims to balance innovation with public safety, ensuring that the government can intervene effectively when AI deployments pose systemic risks to the nation's digital infrastructure or social stability.

This development follows the February 2026 amendments to the IT Rules, which established a due-diligence framework for synthetic media and deepfakes. By mandating that platforms label AI-generated content and remove unlawful material within strict timeframes, the government is creating a layered regulatory environment. While no specific timeline for the new bill has been announced, the framework signals a proactive approach to managing the rapid integration of AI across the Indian economy.