India’s AI dreams may need a sandbox to take flight

India’s artificial intelligence innovation space could thrive with a sandbox-style testing model, much like the one already in use in the financial sector, said Panneerselvam Madanagopal, CEO of the MeitY Startup Hub.

In this context, a regulatory sandbox acts as a protected testing ground where startups can experiment with new technologies under controlled, real-world settings. This helps innovators move forward without facing the full burden of regulations upfront—while ensuring safety, ethics, and data privacy are upheld.

The Reserve Bank of India (RBI) previously launched such sandboxes in fintech to support experimentation in areas like digital banking and inclusive finance. These setups gave startups the freedom to pilot innovations with oversight, while regulators gained insights to shape future laws.

Speaking at the Startup Mahakumbh in New Delhi, Madanagopal recommended a similar strategy to supercharge India’s AI ambitions. “We’ve expanded wide; now it’s time to go deep—building sustainable, product-first companies from India,” he said.

Although he didn’t confirm any upcoming policy shifts, the proposal hints at a potential new direction. So far, the concept is still in its idea stage.

India’s AI regulation remains in flux, swinging between structured control and industry-led self-regulation. A recent MeitY report supports this hybrid approach.

Madanagopal also urged young entrepreneurs to avoid short-term thinking and focus on research-backed innovation. Many, he noted, drift from building products to offering services for quick revenue—at the cost of their original vision.

“Stick with the long game,” he advised.

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