Sitharaman warns AI can sway elections unseen, asks RBI

Finance Minister Nirmala Sitharaman has asked the Reserve Bank of India (RBI) to explore a 'soft touch' approach to regulating artificial intelligence. She raised the concern after telling an audience that a leading AI model is fully capable of influencing elections without voters sensing the manipulation.

Sitharaman made the remarks in her valedictory address at the Global Fintech Fest 2026 in Mumbai. "There are times that I've checked up with RBI. Is there a way in which we can do a soft touch regulation?" she said. She questioned whether oversight could be implemented without affecting innovation.

AI's election influence capability

The minister described an unnamed large language model as being "fully capable of influencing the opinion in the ground without the ground even sensing that they are being influenced." She framed this as a personal political concern. "To the extent that me being a minister, being in politics, I'm clearly seeing it capable of influencing elections," Sitharaman stated. She was describing a capability, not alleging any specific incident has occurred.

In the same passage, she separately referred to an unnamed country being attacked by "several agentic groups together with one group of rogue operators," which she said compromised an entire national system. No further details were provided.

Researcher resignation and industry duty

Sitharaman pointed to public attention drawn by a researcher's resignation from a leading AI lab this week. She quoted the researcher as saying commercial frontier labs are "racing straight to self-improving superintelligence and gambling with our lives." She did not name the researcher or laboratory, but the quote matches remarks reported by TechCrunch from a researcher who resigned from Anthropic.

She argued the weight of the warning came from senior figures within the AI ecosystem who privately acknowledged its substance. This led her to pose public questions to the industry. "Who from the global AI industry will stand up and reassure the public? Who will demonstrate that safeguards are actually keeping pace with the speed?" she asked. Leaving such risks for society to answer is, she said, "an unsustainable distribution of risk."

She also set a reciprocal obligation for technology companies. They "need to be fair to the jurisdictions where they earn their profits," meeting local tax obligations and giving back.

Regulatory precedents and proposals

The Finance Minister cited the European Union's AI Act as a jurisdictional precedent. She noted that Article 50 took effect on August 2, 2026, requiring providers to inform people when they are interacting with an AI system, mark synthetic content in machine-readable form, and disclose deepfakes. She stated the penalty for breaches is 3% of annual global turnover, applying to worldwide revenue.

Sitharaman distinguished between the RBI's regulated perimeter and areas beyond it. "Where the regulator's writ ends, your own standards must begin," she told fintech and broader technology companies operating outside direct oversight.

She proposed a federated industry platform to unify the Indian technology ecosystem. This platform would not speak for individual companies but provide a collective sector voice with foreign regulators "before regulatory positions harden and barriers are erected." She suggested it could work on interoperable standards, shared cybersecurity practices, licensing, and helping Indian firms commercialise intellectual property across borders.

Push for digital rupee and tokenisation

On tokenisation, Sitharaman highlighted REC Limited's completion of India's first tokenised corporate bond pilot under the SEBI sandbox on Monday, September 8. She noted the bond and the digital rupee moved "at the exact same instant."

She argued the pilot was possible because of the central bank digital currency settling the transaction. "Every tokenisation architecture being tested across the world eventually returns to the foundational question: what is the money leg made of?" On this basis, she publicly urged the RBI to take its wholesale and retail Central Bank Digital Currency (CBDC) pilots further and to "continue to sharpen its capabilities with the digital rupee."

Sitharaman also confirmed the RBI recognised the Unified Fintech Forum as a second self-regulatory organisation for the fintech sector on September 10.