The Clarification in Parliament
In a recent session of the Rajya Sabha, the government clarified its stance on the regulation of AI data centres. In a written reply, the Minister of State for Environment, Forest and Climate Change, Kirti Vardhan Singh, addressed questions regarding
the environmental impact and regulatory oversight of these power-hungry facilities. The key takeaway is that India, at present, does not have a separate, standalone regulatory category for AI data centres. Instead, they are governed under the existing Environmental Impact Assessment (EIA) framework for large construction projects. This means a data centre requires prior environmental clearance only if it crosses a certain size threshold—typically a built-up area exceeding 20,000 square metres. The clarification highlights that while there isn't a specific 'AI law,' a web of existing rules applies.
No Single AI Law, But Many Rules
India’s approach to regulating AI itself is not to create a single, overarching law that governs the technology. Instead, the government is opting for a more flexible, sector-specific strategy. This involves using a combination of existing laws and new, targeted regulations to manage the risks and opportunities of AI. The primary legislation currently governing the digital space is the Information Technology Act, 2000, along with its subsequent rules. These rules cover aspects like intermediary liability and the spread of misinformation, which are highly relevant in the age of generative AI and deepfakes. Recent amendments have even proposed reducing the time for platforms to take down unlawful AI-generated content from 36 hours to just three hours, signaling a more stringent approach to harmful content.
The Role of the DPDP Act
A critical piece of this regulatory puzzle is the Digital Personal Data Protection (DPDP) Act, 2023. While not an AI law, its impact is profound, as AI models are often trained on vast amounts of data, much of which can be personal. The DPDP Act establishes a consent-based framework for processing personal data. This means any organisation developing or using an AI system that handles the personal data of Indian citizens must comply with its provisions on lawful use, data minimization, and user rights. This directly influences how AI models can be built and deployed in India, forcing companies to be more transparent and accountable for the data they use.
Governing the Digital Backbone
Data centres are the physical backbone of the digital economy. The government's reply in Parliament noted that their environmental footprint is managed through existing laws governing water, air, and construction. For instance, groundwater extraction is regulated by guidelines from the Ministry of Jal Shakti, a critical factor given the immense water required for cooling these facilities. Furthermore, the Ministry of Electronics and Information Technology (MeitY) has set up working groups to examine energy efficiency and environmental resilience in digital infrastructure, indicating a growing focus on sustainability. States like Uttar Pradesh, Telangana, and Maharashtra are also creating their own data centre policies with incentives to attract investment while setting local operational standards.
A 'Techno-Legal' Future
Looking ahead, India is charting a unique 'techno-legal' path. This approach, favoured by government bodies like MeitY, aims to avoid overly restrictive laws that could stifle innovation. The focus is on regulating the use cases of AI—how it is applied in different sectors—rather than the technology itself. The forthcoming Digital India Act is expected to be a comprehensive legislation that will replace the decades-old IT Act and provide a more modern framework for governing AI, online platforms, and the broader digital ecosystem. The government's strategy is to create a set of guardrails that encourage responsible innovation while protecting citizens from potential harms like bias, discrimination, and threats to electoral integrity.
