India’s AI Ban for Government Officials: Caution or Overcorrection?

India has been struggling to make ambitious strides in artificial intelligence (AI), despite the effort at positioning itself as a global leader in AI innovation with the #AIforAll vision. However, in a move that caught many by surprise, the Ministry of Finance recently issued an advisory banning the use of AI tools like ChatGPT and DeepSeek on official government devices. I think the advent of the latter has the GOI spooked.

The rationale? Data security.

While safeguarding sensitive government data is critical, this directive raises an important debate: Are we prioritizing security at the cost of efficiency and progress? Can a country that aims to be an AI powerhouse afford to limit its own officials from accessing cutting-edge AI tools?

Why the Ban?

The government’s concerns about AI tools primarily revolve around data confidentiality, unauthorized data sharing, and the risk of AI models unintentionally exposing sensitive information. This is not entirely unfounded—AI models, especially those hosted on external servers, may store or process input data in ways that are not fully transparent.

But here's the dilemma: AI isn't just a risk—it’s also a game-changer. And by cutting off access, we might be trading one risk for another: the risk of inefficiency, outdated decision-making, and slower governance.

Does the Ban Align with India's AI Strategy?

The National Strategy for Artificial Intelligence (NSAI), published by NITI Aayog, is built around the #AIforAll vision, which emphasizes AI’s role in enhancing governance, efficiency, and public service delivery.

The strategy highlights three advantages:

• AI for governance – enabling policymakers with AI-driven insights.
• AI for efficiency – automating tasks and reducing administrative burdens.
• AI for decision-making – helping government officials analyze vast amounts of data quickly and effectively.

Banning AI tools contradicts these objectives. Instead of fostering AI-assisted governance, it isolates government officials from the very tools that can enhance their work.

What About Data Privacy?

If the issue is data security, then shouldn’t the government focus on developing secure, indigenous AI solutions instead of imposing outright bans? Provide an alternative first. It's been ages since the LLMs and reasoning models have been around.

The Digital Personal Data Protection Act (DPDPA), 2023, was enacted precisely to regulate data handling and protect personal information. This act ensures that organizations process data securely and lawfully while allowing for innovation.

The Unintended Consequences of the Ban

This policy might end up hurting India’s AI leadership aspirations in ways that weren’t anticipated:

• Slower Bureaucratic Processes – AI could be the tireless intern that never takes chai breaks—summarizing reports, drafting policies, crunching numbers, and automating the boring bits. Without it, government work will remain the fine art of moving paper from one desk to another, with productivity measured in files shuffled per hour rather than actual progress.
• Skill Gap in AI Adoption – Expecting officials to shape AI-driven governance without using AI is like asking a fish to design a bicycle—comical at best, disastrous at worst. If they never interact with AI, how will they make policies that actually harness its potential? Instead, we’ll get policies that read like a 90s manual for a fax machine—technically accurate but completely out of touch.
• Reduced Global Competitiveness – While China is building AI-driven smart cities, the U.S. is integrating AI into policymaking, and the EU is fine-tuning AI regulations, we’ve chosen to put AI on a “need-to-not-know” basis. It’s like entering a Formula 1 race on a bullock cart—quaint, traditional, and hopelessly behind.

What’s the (Obvious) Way Forward?

Instead of banning AI tools outright, India should adopt a balanced approach that maximizes benefits while mitigating risks.

Develop Secure, India-Owned AI Tools. India has the talent and (hopefully the will to commit) resources to build government-approved AI platforms that officials can use securely. Indigenous LLMs (large language models) hosted on government servers would allow officials to access AI without compromising security. The Finance Ministry has allocated a total of ?4,349.75 crore in the FY26 Union Budget to schemes which directly or indirectly involve AI (source: The Hindu)

AI Guidelines Instead of Blanket Bans. A more nuanced policy could:

• Allow AI use for non-sensitive tasks like report generation and policy research.
• Restrict AI for handling classified or highly sensitive data.
• Introduce training programs on responsible AI usage.

Encourage Private-Public Collaboration. The private sector is already developing AI tools that prioritize security. Partnering with Indian tech companies can help the government integrate AI securely without relying on external tools.

Conclusion: Rethink, Don’t Restrict

Security concerns are real, but so are the benefits of AI. Instead of an either-or approach, India needs a structured, strategic AI policy that balances risk with opportunity.

The world is moving towards AI-first governance—shouldn’t India be leading this charge instead of stepping back?