Finance Minister Calls for AI Guardrails as Technology Goes Global

Finance Minister Nirmala Sitharaman has called for stronger safeguards and human accountability in the use of artificial intelligence, particularly as AI, agentic AI and other emerging technologies move deeper into finance and other critical sectors.

Advertisement

Speaking at the 7th Global Fintech Fest 2026 in Mumbai on September 11, the Finance Minister said AI can make financial decisions and transactions faster, but the same speed can also increase the impact of software errors, fraud, cyberattacks and market shocks.

She said innovation should not come at the cost of safety and accountability.

Human Responsibility Must Remain

Finance Minister Sitharaman said AI may support human judgment, but responsibility for decisions must remain with people and institutions. She said the need for human review, explanation and an opportunity to appeal becomes greater when an AI-driven decision has serious consequences.

Advertisement

She also called on regulators, company boards and senior management to understand how AI is being used within organisations. This includes knowing what decisions AI influences, what data it uses and what could happen if the technology fails.

According to the Finance Minister, higher-risk applications should receive greater scrutiny before deployment and throughout their lifecycle.

She also called for coordination among financial regulators, competition authorities, data-protection bodies and cybersecurity agencies so that activities do not escape oversight simply because they operate across sectors or through technology platforms.

Sitharaman also pointed to the risks associated with agentic AI, which can move beyond providing recommendations to taking actions directly.

Also Read: AI is Changing How Young Professionals Begin Their Careers

Advertisement

She said the growing speed of technology can work both ways: it can improve efficiency and fraud detection, but can also allow failures and attacks to spread more quickly.

She further warned that the growth of quantum computing will require existing security and encryption systems to be upgraded before current defences become obsolete.

Proposed Platform for Indian Technology Companies

Sitharaman also proposed considering a federated industry platform that could help Indian technology companies engage with foreign governments and regulators in a more coordinated manner.

She said Indian technology companies expanding into overseas markets increasingly have to deal with different rules covering data, licensing, cybersecurity, taxation, consumer protection and financial regulation.

A coordinated industry platform could help companies understand these requirements and engage with regulators before regulatory barriers are created.

The proposed platform could also help Indian companies identify areas where standards can be made interoperable, share data and cybersecurity practices, license and monetise technology abroad, build international partnerships and enter new markets.

Sitharaman said smaller technology companies and startups may find it difficult to understand and negotiate different regulatory systems across countries on their own.

A collective platform, therefore, could provide support as Indian companies expand globally. Reuters also reported that she said some countries have regulations that support innovation, while others can unintentionally create barriers for new entrants.

Balancing Innovation and Safety

Sitharaman said the policy challenge should not be framed as a choice between adopting AI and avoiding it. Instead, organisations need to focus on responsible and well-managed adoption.

She called for systems that are fast but accountable, autonomous but capable of being reversed when mistakes occur, and innovative without weakening consumer trust. She also said technology companies must meet their tax obligations in jurisdictions where they generate profits.

The Finance Minister’s comments come as India seeks to expand its technology and fintech footprint globally while regulators and governments worldwide work on rules for emerging technologies, including agentic AI and asset tokenisation.

The focus, she indicated, is on allowing innovation to continue while ensuring that human oversight, accountability and safety remain part of technology adoption.