India needs a phased strategy for deploying artificial intelligence (AI) in the context of increased uncertainty and resource constraints. This recommendation is contained in the report of the Finance Ministry for the fiscal year 2025-26 (ending in March).
“India's AI strategy should be carefully designed to avoid premature prioritization or over-regulation“, said the document presented by the Finance Ministry in the lower house of Parliament and published on the ministry's website.
The Finance Ministry recommends focusing on small AI models targeted at specific applications or sectors of the economy to ensure efficient use of resources. “Coordination should be prioritized, followed by AI capabilities, and the lever through mandatory policies should be used last, allowing research institutions and markets to evolve together“, the document notes.
Indian policy should encourage innovation and include shared access to computing infrastructure, targeted at specific offerings and sectors, allowing for efficient use of resources. AI security oversight bodies should identify vulnerabilities in the use of AI through international cooperation and set limits for high-risk applications.
The annual financial review by the finance ministry precedes the approval of India's budget for the upcoming financial year 2026-27, which Parliament will pass on February 1.