Critics of the proposed MeitY mandate warn that overly rigid requirements could stifle the development of advanced AI in India. The primary value proposition of agentic AI is its ability to operate autonomously, saving time and reducing the need for constant human attention. By forcing a human-in-the-loop for every payment, the government may inadvertently negate the efficiency gains that make these technologies attractive to businesses and consumers.
There is a concern that such a mandate could put Indian AI startups at a competitive disadvantage globally. If other jurisdictions adopt more flexible regulatory frameworks, developers may choose to build and deploy their most advanced financial agents elsewhere. This could lead to a 'brain drain' of talent and a loss of investment in the domestic AI ecosystem, hindering India's ambition to become a global leader in artificial intelligence.
Additionally, the definition of what constitutes an 'agentic' transaction remains ambiguous. If the regulations are too broad, they could capture simple automation tools that pose little risk, creating unnecessary friction for users. Critics argue that a more nuanced, risk-based approach—where oversight is proportional to the size and nature of the transaction—would be more effective than a blanket requirement for human intervention.
Instead of mandatory manual checks, some suggest that the government should focus on setting high standards for AI security, auditability, and error-handling protocols. By focusing on the underlying technology's robustness rather than just the user interface, regulators could achieve safety goals without sacrificing the speed and convenience that define the next generation of digital services.