Indian Government Leverages Procurement to Shape AI Governance Frameworks

In an era defined by rapid technological advancement, the governance of Artificial Intelligence (AI) has emerged as a critical focus for governments worldwide. In India, the landscape is particularly dynamic as public procurement processes have started to play a pivotal role in establishing mandated standards and frameworks for AI technologies. A recent study, conducted by the Human Sciences Research Centre (HSRC) at IIIT Hyderabad, underscores this trend, revealing that public procurement is now influencing AI governance in meaningful ways, especially given the current absence of comprehensive AI legislation.

The findings of this exploratory study were presented at the 6th India Public Policy Network Conference (IPPN) 2026, where it was awarded the Best Paper Award for its significant contributions to the understanding of AI regulation in India. The research, led by Prof. Aakansha Natani, delineates how government tenders and outsourcing arrangements are not merely financial transactions, but strategic actions shaping governance around AI development and deployment. Through an in-depth analysis of procurement documents, the study reveals that without a formal AI Act, the establishment of accountability and ethical standards occurs largely within the context of procurement efforts.

As the Indian government increasingly utilizes AI technologies spanning various sectors—from administrative functions to public service—there arises a pressing need for technical proficiency that exceeds existing in-house capabilities. Numerous departments are leaning on private companies and startups to fulfill their AI requirements, recognizing that merely establishing internal frameworks may not suffice. This reliance on external vendors and partners necessitates a clearer articulation of the required technical specifications within procurement documents—an aspect that the study highlights as a crucial evolution in the landscape of AI governance.

With this shift to procurement-driven governance, it is imperative for companies in the government contracting sector to understand the implications of this new paradigm. Procurement professionals are urged to recognize the increasing complexity and specificity surrounding AI-related tenders, which now integrate detailed guidelines that reflect rising regulatory expectations. These documents will play a significant role in shaping how AI solutions are standardized, utilized, and measured for success within governmental operations.

The engagement of think tanks and research institutions with public procurement processes signifies a broader, interdisciplinary approach to navigating AI's complexities. As noted by Siddhi Wadekar, a PhD scholar involved in the study, "Unlike the EU, India currently does not have a dedicated AI Act. Instead, AI governance is guided through advisory documents, frameworks, and guidelines, a regulatory landscape that is still evolving." This underscores the necessity for procurement to act as a de facto regulatory tool, further reinforcing the need for accountability and compliance in India's AI ecosystem.

As government agencies increasingly shape their AI strategies through procurement, stakeholders in the contracting space must remain vigilant to anticipate the demand for comprehensive solutions that align with emerging standards. Vendors and contractors should position themselves proactively to meet these requirements, ensuring that their offerings are not just competitive but also forward-thinking in terms of compliance and governance.

The implications of this shift are profound, as the procurement process has the potential to standardize interactions with AI systems, setting benchmarks for performance, ethical considerations, and societal accountability. It opens up avenues for interdisciplinary collaboration, marrying technical and social sciences in pioneering more robust oversight mechanisms. Ultimately, as India navigates its AI trajectory through procurement, the engagement of diverse stakeholder perspectives will be key in ensuring responsible and equitable deployment of AI technologies.

In conclusion, the study by IIIT Hyderabad serves as a call to action for both public and private sectors to rethink their approaches toward AI governance—a challenge that extends beyond technical parameters and into the realms of policy, ethics, and societal impact. The evolution of procurement as a facilitator of AI governance not only highlights the critical intersection of technology and public policy but also sets a precedent for how other nations might adapt their frameworks to mirror this procurement-centric approach to AI regulation.