Daijiworld Media Network - New Delhi

New Delhi, Nov 12: India’s technology industry has urged the government to refine its proposed amendments to the IT Rules, 2021, which require visible labelling and watermarking of AI-generated and synthetic content. In detailed submissions to the Ministry of Electronics and Information Technology (MeitY) on November 8, leading industry bodies Nasscom and the Business Software Alliance (BSA) said that while the intent to curb deepfakes is commendable, the current draft could inadvertently cover nearly all AI-assisted material on the internet.

Nasscom cautioned that the broad definition of “synthetically generated information” might include routine, harmless uses of AI in writing, design, and video editing. Both associations recommended that mandatory labelling be limited only to “deceptive or harmful” synthetic content that risks misleading users or undermining public trust.

They also suggested a flexible compliance framework — focusing on metadata-based traceability and provenance verification — rather than rigid 10% visible watermarks or labels that could disrupt user experience and increase compliance costs. Nasscom proposed a harm-based, outcome-oriented approach aligned with global standards such as the Coalition for Content Provenance and Authenticity (C2PA).

The associations further sought exemptions for enterprise and backend AI applications, including analytics, restoration, or editing tools, and for text-only outputs where visible labelling is impractical. They recommended piloting the implementation through voluntary sandboxes before any nationwide rollout.

While the industry supports MeitY’s goal of enhancing AI transparency, it warned that excessive labelling could stifle innovation and overburden digital intermediaries. “The focus should be on intent and harm, not every instance of AI use,” one submission emphasized.

According to NDTV Profit, the government may not roll back the proposed amendments entirely but could ease the labelling threshold from 10% to around 5–7%. Industry leaders, including CII and Jetsynthesys’ Rajan Navani, have welcomed the government’s intent but questioned the practicality of enforcing broad-based AI regulations.