Mumbai: Finance Minister Nirmala Sitharaman Friday called for stronger accountability and safeguards around artificial intelligence as the technology moves into finance and other critical sectors, warning that regulators and companies must ensure rapid innovation does not create new forms of systemic risks.
Speaking at the Global Fintech Fest here, she said AI could accelerate financial decisions and transactions but also allow fraud, cyberattacks and other failures to spread at unprecedented speed.
“AI may assist judgment, but responsibility must remain human and institutional,” she said, adding that the more serious the consequences of an AI-driven decision, the greater the need for review, explanation and appeal.
She said regulators, company boards and senior management should understand where AI is being used, what decisions it influences, what data it relies on and what could happen if the technology fails.
“Higher-risk uses must receive higher levels of scrutiny before deployment and throughout their life cycle,” she said.
Referring to an Anthropic researcher resigning over fears that unrestrained development of self-improving AI models will end up killing humans, Sitharaman asked if there was a case to examine the warning closely. “I raise this not to cause alarm, but to emphasise institutional accountability towards larger humanity.
“Unless those safeguards arrive quickly and update continuously, the question of AI going rogue is left for society at large to answer. That is an unsustainable distribution of risk,” she said.
The minister also warned against treating the choice as one between adopting AI and avoiding it, saying the relevant distinction was between responsible and well-managed adoption.
“Efficiency and safety should not be competing objectives; good institutional design must make them mutually reinforcing,” she said.
With Indian technology companies increasingly expanding overseas, Sitharaman proposed considering a federated industry platform that could give the country’s broader technology sector a collective voice in international regulatory discussions.
AI, fintech and digital platforms operate across borders, she said, while laws governing data, licensing, cybersecurity, taxation, consumer protection and financial regulation remain largely national.
“For an Indian technology company seeking to become global, navigating cross-border regulation is no longer a peripheral matter. It has to become part of its global growth strategy,” she said.
The proposed platform could engage foreign governments and regulators, identify areas where standards could be made interoperable, share cybersecurity and data practices and help Indian companies navigate licensing regimes, she said.
It could also help companies commercialise and monetise intellectual property abroad, build partnerships and enter new markets, while working with foreign corporations and institutional partners.
At the same time, the minister said technology companies must meet their tax obligations in the jurisdictions where they generate profits.
“It cannot be that a company pays in one place and nowhere else,” she said.
PTI