Global AI Governance Enters New Phase as India Plays a Central Role in International Tech Diplomacy

From Promise and Peril to Regulation and Strategy

Artificial intelligence (AI) is no longer a future prospect—it is a present reality reshaping economies, geopolitics and societies. In 2025, more than ever before, governments and businesses are grappling with not just what AI could become but how it should be governed. The legal, ethical and commercial frameworks around AI are rapidly evolving, and India is firmly in the mix.

Earlier debates—centred on existential threats from general-purpose AI or high-end robotics—have broadened to cover practical themes: supply-chain risk, data governance, labour-market disruption, international standard-setting and geopolitical influence. As one analysis put it, “2025 marks the transition from AI as speculative to AI as operational.”

Within this shift, India is gaining prominence. It has hosted, co-hosted or publicly supported multiple international AI governance forums; engaged in bilateral and multilateral dialogues; and sought to balance the twin imperatives of embracing advanced technology and safeguarding national interests. At the same time, India’s domestic AI ecosystem—spanning start-ups, public-sector adoption and multi-language initiatives—continues to grow. The global and domestic threads are now intertwined.

Key Milestones in 2025 AI Diplomacy

Several major events and instruments have shaped the AI governance narrative this year.

• The AI Action Summit held in Paris on 10–11 February 2025, co-chaired by India and France, brought together over 100 countries and sought to steer AI governance toward inclusive, transparent and ethical trajectories.
• The BRICS summit in Rio de Janeiro in July adopted a declaration recognising AI governance and digital economy reform as core pillars of the Global South’s cooperation agenda.
• International bodies such as the United Nations Educational, Scientific and Cultural Organization (UNESCO) and the International Telecommunication Union (ITU) convened forums on the ethics of AI and the readiness of nations to adopt standards.
• Analyses of global regulation such as “Global AI Governance in 2025” underline that states are increasingly seeing AI through the lens of strategic and industrial policy, not just civilisation-wide caution.

These milestones mark the shift: AI governance is now an international strategic theatre—where technology, economics, power and values meet.

India’s Strategic Positioning

For India, the year has been one of asserting both ambition and calibration. On the one hand, India is cultivating its domestic AI ecosystem: leveraging multi-language models, expanding public-sector digital platforms and encouraging start-ups in generative AI, computer vision, healthcare AI and education applications. On the other, India is positioning itself diplomatically: co-hosting summits, signing declarations, engaging in talks on standards and ethics, and emphasising its voice in the Global South’s AI agenda.

India’s dual role is significant because it embodies the challenge many countries face: how to access cutting-edge AI capability while preserving national sovereignty, digital trust, make-in-India ambition and ethical safeguards. India’s approach has been described by experts as “middle path oriented”—neither favouring lax “innovation at any cost” regimes nor overly burdensome “precaution at paralysis.”

Several themes represent India’s posture:

• Inclusive development: India emphasises that AI must benefit large, under-served populations—language diversity, regional inclusion and low-cost infrastructure are central.
• Technology sovereignty: India is seeking to build domestic capacity in AI models, chips, data-centres while remaining open to foreign investment and collaboration.
• Global standing: By co-leading international governance efforts, India is signalling it will be a shaping actor, not just a passive adopter.

Divergent Models, Rising Tensions

Despite multilateral effort, the global AI governance terrain is far from harmonised. Major powers are already diverging in approach.

For example:

• The United States emphasises rapid innovation, market leadership, minimal regulation and sees advanced AI capability as a national-security asset.
• China emphasises state-driven industrial strategy, data sovereignty, controlled openness and the promotion of a “global south inclusive” AI ecosystem—while warning against AI becoming “an exclusive game for a few countries and companies.”
• The European Union emphasises comprehensive regulation (through instruments like the European Union Artificial Intelligence Act), risk-based approaches, human-rights anchoring and industrial strategy. Analysts note this model as potentially setting the global benchmark.

These divergent paths mean that for emerging-economy states like India there are both opportunities and risks. Opportunities to serve as bridge between blocs, to host hub-functions, to shape norms. Risks if fragmentation deepens and technology access becomes exclusive or if regulatory misalignment increases trade and investment frictions.

Key Governance and Regulatory Themes

A number of governance themes have surfaced across forums and are likely to dominate the next 12–24 months:

a) Standards and certification

The push to translate ethical-principle statements into operational standards is underway. The ISO/IEC/ITU ecosystem is focusing on AI verification, watermarking of generative content, transparency of models and benchmarked risk assessments.

b) Data governance and sovereignty

Nations are grappling with data flows, localisation mandates, cross-border exchange, privacy protection and cloud architecture trust. India is navigating between open-market data flows and national-security must-haves.

c) Dual-use technologies and national security

AI systems increasingly have military, surveillance or infrastructure implications. The geopolitics of AI chip supply, model training and governance frameworks are now entwined with great-power competition.

d) Labour, digital-divide and inclusion

With AI’s transformative potential, ensuring that benefits reach underserved populations and avoiding a deepening of inequalities is a major policy concern. India is placing emphasis on this dimension.

e) Liability and accountability regimes**
How to assign responsibility if an AI system causes harm? Many jurisdictions are now drafting legislation or guidance that address civil liability, transparency requirements, human oversight and audit trails.

f) Trade and investment linkage**
AI governance is no longer just a regulatory challenge; it is an investment, trade and industrial-policy challenge. Countries are using AI policy to attract investment, build local ecosystems and anchor supply chains.

Implications for India’s Ecosystem and Economy

India’s participation in this global turn in AI governance is relevant not only from a policy point of view but for its economic and strategic implications. For the domestic ecosystem: accelerated standards and governance clarity mean that Indian firms, start-ups and research institutions can build products with global interoperability. Export opportunities in AI models, applications, data services, and embedded systems may expand. For public policy: AI will feature in India’s national priorities—digital public infrastructure, education, healthcare, agriculture, finance—and governance frameworks will need to adapt to AI-driven disruption in labour markets, ethics and security.

On the flip side, India must watch for risks: being caught in regulatory frameworks that stifle innovation; facing divergence that limits access to global AI platforms or talent; or being vulnerable if global AI supply chains become restricted or fragmented.

What to Watch Next

For scholars and practitioners alike, a set of milestone points will bear monitoring:

• Which countries sign new treaties or frameworks on data, AI, and compute governance.
• Whether India signs or launches bilateral memoranda in AI-related regulation, standardisation or supply-chain partnerships.
• How domestic firms in India respond to global standard-setting and interoperability demands.
• How export-oriented AI applications from India (such as multi-lingual models, healthcare AI, agritech) align with global governance norms.
• Whether access to advanced models, chips and data services is affected by divergence in policy regimes.

Conclusion: Shaping Technology, Shaping Tomorrow

The global governance of artificial intelligence is evolving from moral statements to testable frameworks, from ad-hoc policy to structured industrial strategy, and from national policy silos to transnational negotiation. India’s active role in this transformation matters. At a moment when AI is poised to influence everything from jobs to national defence, the positions countries adopt now will shape decades. For India, this opens the possibility of becoming both a global pivot and local engine for AI—if it gets the balance right.

The story of AI governance in 2025 is not simply about technology. It is about power, economy, ethics, equity and future-readiness. India stands at the cross-road of these forces—and the path it chooses will have consequences not just for its own citizens but for the global digital order.