Indian Government is Developing Voluntary Codes of Conduct for AI Businesses

Nitin Konde, Varun Bhardwaj

Nov 18, 2024 — 5 min read

Indian Government Introduces Voluntary AI Conduct Codes for Businesses

According to a media report, the government is developing voluntary rules of ethics and conduct for businesses to adhere to while using generative AI or artificial intelligence (AI).

According to an official, the ethics and conduct guidelines created by the Ministry of Electronics and Information Technology will resemble "informal directive principles" for businesses, particularly those developing large language models (LLMs) or utilising data to train artificial intelligence (AI) and machine learning models. AI legislation is still a ways off. "We are currently trying to get the industry on board with a common set of principles and guidelines and are talking to all stakeholders to see what can be included," the official stated.

Sharing he thoughts on the move, Sakshi Shah, Founder of GoodLives stated, "The effort by the Indian government to create voluntary rules of conduct for AI companies is a praiseworthy step in striking a balance between responsibility and innovation. As the founder of GoodLives, a platform for holistic wellness powered by AI, I am aware of how revolutionary AI may be, particularly in fields like mental health and general wellbeing. But enormous power also carries a great deal of responsibility."

"Although artificial intelligence (AI) has the potential to completely transform businesses, if ethical standards are not followed, it may have unforeseen effects such as data privacy issues, biased algorithms, or the exploitation of private data. In addition to encouraging self-regulation by firms, voluntary codes of conduct also help to build user trust. These norms, which prioritize openness, equity, and inclusivity, can serve as a model for the responsible application of AI. GoodLives uses artificial intelligence (AI) to provide data-driven, customized wellness solutions while keeping user privacy and ethical issues top of mind," she added.

Echoing similar sentiments, Kiran Rudrappa, the CEO & Co-Founder of Posspole, opined, "A significant step towards fostering ethical and responsible innovation has been taken by the Indian government by developing voluntary codes of conduct for AI businesses. In order to build trust in the market and to differentiate themselves from the competition, startups must adhere to these guidelines that emphasize transparency, accountability, and fairness."

"In addition to enhancing their reputation, Indian startups can also access government support and partnerships by aligning themselves with these principles. There are some challenges to this initiative, such as resource constraints and ambiguous guidelines, but it encourages collaboration between startups, corporations, and regulators, which is crucial to achieving sustainable growth. India's commitment to ethical AI development is underlined by adopting these codes, positioning Indian startups to lead globally in responsible AI practices," he commented further.

Arpit Mittal, Founder and CEO of SpeakX , said, “India’s AI market is growing rapidly, with a projected CAGR of 25-35%, expected to reach around $17 billion by 2027, according to a recent report by BCG and Nasscom. As AI transforms industries, the Indian government’s move to introduce voluntary codes of conduct for AI businesses comes at a crucial time. It offers a much-needed framework to ensure that as companies innovate, they also prioritize transparency, fairness, and accountability. These guidelines are not just about setting standards—they help build trust with users, which is essential for AI’s long-term success."

Scheduled to be Released by Next Year

Another official stated that the optional code of conduct might be made public early in the next year. The IT ministry may publish broader guidelines as part of the voluntary code that include actions that businesses can take to prevent potential misuse of the company's LLM and AI platforms, as well as steps that businesses can take during training, deployment, and commercial sale.

An 11-point code of conduct for businesses operating in the AI and gen-AI area has been prepared by the G7 members. According to a media report that quoted a ministry official, "The idea will be the same, but what we are trying to develop will be completely different."

"This move by the Indian government is a significant step toward fostering ethical innovation in the industry. This initiative reflects a growing recognition that AI has immense potential to transform economies and societies, but it must be developed and deployed responsibly. From our perspective, a voluntary code provides the flexibility needed for companies to innovate while ensuring adherence to best practices in areas like data privacy, transparency, and fairness. It's also an opportunity to build trust with consumers and regulators, ensuring that AI is used in a manner that aligns with societal values. However, while the voluntary nature of these codes is encouraging, I hope the government provides clear guidelines and engages with industry stakeholders to ensure these standards are practical and effective," said Eric Fonseca- VP Marketing at IndoAI Tecnologies Pvt Ltd.

Bruce Keith, CEO and Cofounder, Investor AI, said,"AI is all around us, and with the rise of ChatGPT, every business will be using AI to some extent in the next five years. The velocity of change and global nature of AI is making it extremely difficult for any national government to legislate. The rewards for countries that become leaders are akin to winning the next industrial revolution. Any code of conduct needs to recognise this and be framed in a way that protects the consumer while allowing enterprise to innovate. The recent successes of GenAI and neural networks over symbolic AI (logic and reasoning) mean it is harder to make AI models explainable. As a result, I believe that the code of conduct needs to focus on the traceability of source data (and availability of citations) and transparent metrics."

Advisory Released by the IT Ministry

The IT ministry released an advisory earlier this year in March, requesting that all platforms make sure that their computer resources do not allow for bias or discrimination or jeopardise the integrity of the voting process through the use of artificial intelligence (AI), generative AI, LLMs, or any other algorithm of that like.

The IT ministry also stated in its advisory that before any AI models, large language models (LLMs), software that uses generative AI, or algorithms that are being tested in the beta stage of development or are unreliable in any way are made available to users on the Indian internet, they must obtain "explicit permission of the government of India." Later, the advisory was dismissed, and businesses were no longer required to register their AI or LLM prior to implementation.

Why This Step is Needed?

Even while artificial intelligence (AI) has transformed many industries, it also presents a number of threats to society, including prejudice, avoidable mistakes, poor decision-making, misinformation, and manipulation. Deepfakes and internet bots have the potential to damage democracies and erode social confidence. Criminals, rogue governments, ideological radicals, or just special interest groups may also abuse this technology to influence individuals for political or financial benefit. The possible harm to society and democratic processes has been brought to the attention of the European Parliament.

According to a recent global report, the number of deepfakes discovered worldwide across all industries increased by a factor of ten between 2022 and 2023. Prime Minister Narendra Modi recently expressed worry about the use of deepfakes to disseminate false information. At the national and international levels, numerous attempts are being made to address the threats posed by AI by addressing issues of ethics, morality, and legal values in the development and application of AI.