Insuring India’s AI future: Why risk protection must grow with innovation

India is rapidly emerging as a global hub for AI innovation, with numerous banks, hospitals, and manufacturers leveraging AI technologies for various applications.
The nation’s AI market is projected to significantly boost its GDP, with predictions of USD 500 billion by 2025, and a thriving startup ecosystem that is developing advanced models for global use.
However, this innovation also comes with heightened risks, such as deepfakes, data breaches, and biased algorithms, which are becoming part of the everyday reality of AI adoption in India.
AI magnifies existing risks rather than creating new ones; for example, it increases exposure to cyberattacks, privacy violations, intellectual property conflicts, and inaccurate outputs.
The Indian insurance sector needs to evolve to address these unique AI risks, yet current policies are often insufficient or misleading, providing a false sense of security.
Effective risk transfer relies on strong governance and compliance with legal frameworks like the DPDP, as well as the development of AI literacy among boards and leadership teams.
To achieve a resilient AI economy in India, trust must be built through robust governance and accountability, complemented by comprehensive insurance that effectively addresses the specific risks associated with AI.