Welcome to The Esya Dispatch, a weekly snapshot of the policy debates shaping India’s digital economy. Each edition brings together key developments in technology policy, from platform governance and AI regulation to data protection and competition — along with the Esya Centre’s perspective on what they mean for innovation, businesses, and users.
Here’s a quick recap of two key tech policy developments from the past week:
MeitY constitutes AI Governance and Economic Group
Recently, the Ministry of Electronics and IT (MeitY) constituted the AI Governance and Economic Group (AIGEG), a high-level inter-ministerial body responsible for overseeing AI governance in India. It will be chaired by the Minister for Electronics and IT and include the MeitY Secretary, the Principal Scientific Advisor, the Chief Economic Advisor, the CEO of NITI Aayog, the Secretaries of the Department of Telecommunications, the Department of Economic Affairs, and the Department of Science and Technology, and a representative from the National Security Council Secretariat (NSCS). Broadly, the AIGEG’s functions include developing India’s AI governance strategy, coordinating policy across ministries and sectoral regulators, identifying regulatory gaps across existing laws, and working with industry to chart a roadmap for AI deployment.
ESYA’S TAKE: The constitution of the AIGEG stems from MeitY’s IndiaAI Governance Guidelines, which had proposed creating an AI Governance Group to develop and oversee India’s AI governance strategy. However, the AIGEG’s Terms of Reference (ToR) goes beyond this aim by seemingly sanctioning a licensing regime for AI models in India. For example, the ToR empowers the AIGEG to classify AI use cases into three categories – “deploy”, “pilot” and “defer” – based on data availability, skills, legal frameworks and capacity for labour adjustment. This language suggests that AI developers will need to obtain the AIGEG’s approval before rolling out AI models for different use cases. Additionally, the parameters to classify AI use cases (e.g. data availability, skills) are subjective and evolve continuously over time. This introduces regulatory uncertainty for AI start-ups and businesses, and risks throttling AI innovation in India.
This approach also risks replicating concerns observed in MeitY’s previous attempts to regulate AI. For example, MeitY’s first AI advisory issued in March 2024 also proposed obtaining government permission before deploying certain “untested” or “unreliable” AI models. However, this advisory was subsequently rolled back following concerns about its impact on AI development and deployment in India.
MeitY notifies online gaming rules, in effect from May 1
On April 22, MeitY notified the Promotion and Regulation of Online Gaming Rules, 2026 (“PROG Rules”). Broadly, the PROG Rules classify permissible online games into online social games and e-sports and establish the Online Gaming Authority of India (“OGAI”), which is empowered to issue guidelines and codes of practice regulating online games and oversee the sector. Additionally, the PROG Rules specifies how the OGAI can determine the nature of any online game, as well as the mechanism to certify and register such games. Further, it lays down a grievance redressal mechanism for online games and clarifies the procedure to impose penalties for any contravention of the Promotion and Regulation of Online Gaming Act, 2025 (“PROGA”). The PROG Rules will be implemented from May 1, 2026.
ESYA’S TAKE: The PROG Rules 2026 retain many problematic provisions under the Draft Promotion and Regulation of Online Gaming Rules, 2025 (“2025 Draft”). For example, the 2025 Draft defined an “online game service provider” as any person that offers, operates, or “makes available” an online game – is wide enough to subsume entities that merely distributed online games, such as app stores or online game storefronts. This raised concerns about an overbroad application of the 2025 Draft, because such entities would then have to comply with obligations related to the registration of online games or the establishment of a grievance redressal mechanism, among others. Despite these concerns, the PROG Rules, 2026 retain the same definition of an “online game service provider”. Additionally, under the 2025 Draft, appeals from the decisions of the OGAI, which is chaired by the Additional Secretary, MeitY lay with the Appellate Authority, which was the MeitY Secretary – raising concerns regarding conflicts of interest and independence in regulatory decision-making. However, the PROG Rules, 2026 retain these provisions as well.
The PROG Rules, 2026 also introduce new requirements that may increase uncertainty for industry stakeholders. For example, the PROG Rules, 2026 have substantially expanded the scope of the OGAI’s powers by empowering it to issue guidelines and codes of practice regarding “standards of fair play” – a term which is not defined under the PROGA or the PROG Rules, 2026. Additionally, under the 2026 framework, the central government may mandate registration for certain online social games based on factors such as the risk of harm to users, the detrimental impact on the public due to the online game, and the scale of user participation in the online game. However, terms like “harm” or “detrimental impact” are rather subjective and not defined under the PROGA or the PROG Rules 2026.
In places, the PROG Rules also create potential overlaps with existing regulatory frameworks. For example, the PROG Rules, 2026 allow the OGAI to issue guidelines regarding cybersecurity, which already falls under the purview of bodies like CERT-In, as well as the retention of traffic data or metadata, which is already regulated under India’s data protection law. Thus, the PROG Rules may contribute to regulatory duplication and interpretive ambiguity, while retaining structural concerns from the 2025 Draft.