Finance Minister Nirmala Sitharaman calls for soft-touch regulation of AI, warns of risks from Agentic AI

Union Finance Minister Nirmala Sitharaman delivers a speech at the Global Fintech Fest 2026 in Mumbai on Friday
| Photo Credit:
ANI

Finance Minister Nirmala Sitharaman on Friday called on Indian regulators to take a cautious and measured approach to regulating artificial intelligence (AI), even as she flagged the escalating risks from increasingly autonomous AI systems that can affect outcomes in the real world.

Key Takeaways

• Finance Minister Nirmala Sitharaman called for cautious, soft-touch AI regulation while warning of risks from agentic AI systems.
• She spoke at the valedictory session of Global Fintech Fest 2026 in Mumbai.
• Sitharaman cited global reports on AI’s capacity to shape public opinion and potentially influence elections.
• She warned autonomous AI systems can affect real-world outcomes without populations realizing it.

Addressing the valedictory session of the Global Fintech Fest 2026, Sitharaman said recent reports from around the world have underscored the capacity of agentic AI systems to mould public opinion and potentially sway elections, often without the affected populations realising it.

The Minister cited warnings from a researcher believed to be Jacob Coxon, who recently stepped down from AI company Anthropic, voicing alarm over self-improving AI systems and the long-term dangers tied to superintelligence.

“I raise this not to cause alarm, but to stress institutional accountability towards humanity at large. When someone within the industry speaks out on safety and alignment, the public listens. Concerns raised from within carry a credibility that outside criticism cannot equal. Who from the global AI industry will step forward to reassure the public? Who will show that safety measures are keeping up with the pace of development? Where is the coordinated, structured effort to deliver credible and open answers?” she asked.

Global Safeguards

Stressing the importance of stronger safeguards, Sitharaman pointed out that the cross-border nature of AI, fintech and digital platforms makes regulatory cooperation more critical than ever. She said variations in regulatory frameworks are increasingly shaping whether companies can access foreign markets and compete on a level playing field.

“These differences increasingly determine whether a company can enter a foreign market, operate effectively and compete on equal terms with local firms,” she said, adding that adherence to global regulations must become a core component of Indian technology companies’ growth strategies.

To bolster India’s global technology presence, the Finance Minister proposed a federated industry platform that would bring together startups and established technology firms. Such a platform could interact with foreign governments and regulators, champion interoperability standards, exchange best practices on data governance and cybersecurity, and assist Indian firms in navigating varied licensing regimes while commercialising their intellectual property worldwide.

Sitharaman also called on global technology companies “to act fairly towards the jurisdictions where they generate their profits.”

“They need to treat their customers well, honour their tax obligations and give back to the societies that have enabled their success,” she said.

Appealing for greater scrutiny of AI deployment, she said regulators, corporate boards and senior leadership must pay closer attention to how AI is deployed, the decisions it shapes, the data it depends on and the risks it introduces.

“AI as a subject cannot be left solely in the hands of technology teams,” she said.

She also urged the Reserve Bank of India (RBI) to quicken its work on the digital rupee, saying that innovation in tokenisation, agentic AI and quantum computing must be balanced with trust, resilience and systemic stability.

Published on September 11, 2026