3 min readNew DelhiJan 30, 2026 09:33 AM IST
First published on: Jan 29, 2026 at 02:25 PM IST
Arguing that India should focus on a guarded stance on AI amid heightened uncertainty and resource constraints, the annual Economic Survey for the financial year 2025-26, said that the country’s AI strategy must be carefully sequenced to avoid premature lock-ins or regulatory overreach.
“Artificial Intelligence does not confront India with a single policy question, but a series of choices that must be made under conditions of heightened uncertainty and resource constraints,” as per the survey.
India should build coordination first, capacity next, and binding policy leverage last, allowing institutions and markets to co-evolve, the Survey tabled in Parliament on Thursday, January 29, read. It was tabled by Union Finance Minister Nirmala Sitharaman in Parliament, and is prepared by the finance ministry’s Economic Division, under the chief economic adviser.
The Survey said that the first phase of India’s AI strategy should focus on operationalising already announced institutions and aligning incentives to enable experimentation.
“Policy should enable bottom-up innovation by expanding the reach of the existing shared infrastructure under the IndiaAI Mission. This includes a government-hosted community-curated code repository and pooled access to public datasets, facilitated by initiatives already underway to enable shared access to computing infrastructure. A clear focus on application- or sector-specific, small and open-weight models will enable efficient resource utilisation,” the Survey read.
It further recommended a clear focus on application- or sector-specific, small and open-weight models to enable efficient resource utilisation.
“Data governance must also evolve through subordinate legislation under the DPDP framework to introduce functional data categorisation and auditability requirements, specifically for large-scale AI training. This must be complemented by incentive-based mechanisms for domestic value retention, such as the menu-based contribution pathways illustrated earlier,” the Survey read.
It also suggested that AI regulation should be formalised on a risk-based and proportionate basis, with obligations for AI companies codified according to scale and sector of use.
“Oversight must be embedded within existing sectoral regulators rather than through a single omnibus AI law. The AI Safety Institute’s role should deepen from analysis to structured scenario testing, red-teaming, and international cooperation, with clearly articulated non-negotiable boundaries for high-risk applications,” the Survey noted.
The Survey’s comments on India’s AI roadmap come ahead of the country hosting the AI Impact Summit 2026 next month. The Summit will be held in New Delhi from February 15 to 20, with the forum coming to the Global South for the first time. It will be the fourth iteration of the Summit, which has so far been held in the United Kingdom (Bletchley Park), South Korea (Seoul), and France (Paris). Prime Minister Narendra Modi will inaugurate the event, and is also likely to host a dinner and address a CEO Roundtable.
The Economic Survey 2025-26 was tabled on January 29. (Image: Unsplash) 
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