As of January 2026, India has transitioned from the “Digital India” era into an AI-First nation. With the IndiaAI Mission fully underway and the Digital India Act shaping the regulatory landscape, Indian businesses are now facing a new operational reality: Agentic AI.
Where AI in 2024 acted as a “copilot” for employees, by 2026, Indian enterprises are deploying autonomous AI agents capable of executing multi-step workflows independently—from automated procurement on the Government e-Marketplace (GeM) to real-time credit underwriting in fintech. This shift is no longer just an IT matter; it is a core fiduciary concern for boards of directors.
Here’s how corporate governance in India has evolved to meet the era of autonomous AI.
1. Redefining “Knowledge” Under the Companies Act, 2013
Under Section 166, directors have a fiduciary duty to act with “reasonable care, skill, and diligence.” Previously, Section 149(12) offered independent directors a “safe harbor,” limiting liability to acts made with their “knowledge and consent.”
The 2026 Shift: Ignorance of how autonomous AI agents operate is now considered a breach of duty. Boards are expected to exercise “Techno-Legal” oversight, ensuring AI agents comply with the company’s constitution and Indian law.
2. SEBI’s Tough Stance: Board Accountability for Algorithmic Decisions
For listed companies, SEBI’s 2025 Master Circulars have evolved into stringent 2026 guidelines. Boards are now fully accountable for the outputs of AI tools in market-facing activities.
For example, if an AI trading bot misleads investors or triggers a flash crash, the Board—not the vendor—is liable. SEBI emphasizes that fiduciary responsibility remains with the Board, regardless of the scale or automation level.
3. DPDP Act Enforcement: Protecting the “Digital Nagrik”
The Digital Personal Data Protection (DPDP) Act, 2023, has reached its enforcement phase in 2026. AI agents processing citizen data must respect “Purpose Limitation”.
Agentic Risk: An AI customer support agent cannot autonomously switch to cross-selling using personal data without explicit consent from the Digital Nagrik. Boards must now oversee Consent Management Platforms integrated directly into AI workflows.
4. The 2026 Boardroom Playbook: From Compliance to Strategy
Boards are reorganizing to mitigate Algorithmic Liability. The current governance gold standard includes:
| Governance Component | Old Way (2024) | New Way (2026) |
|---|---|---|
| Board Expertise | General business acumen | At least one Technology & AI-literate director |
| Audit Scope | Financial & internal controls | Algorithmic audits & bias testing |
| Committee Structure | Audit & Risk Committee | Specialized Technology & Ethics Committee (TEC) |
| Incident Response | PR-led crisis management | AI incident database & “kill-switch” protocols |
The “Seven Sutras” of 2026: MeitY’s India AI Governance Guidelines require boards to audit AI agents against Trust, People First, Innovation, Fairness, Accountability, Understandability, and Safety.
5. Conclusion: Beyond the “Black Box”
Corporate governance in India is no longer just about managing people—it now extends to managing an ecosystem of autonomous digital entities. The “New Gavel” in the boardroom demands transparency in code and accountability for deployment.
As India Inc. prepares for the India-AI Impact Summit 2026, the message is clear: Blind trust in technology is over. Agentic governance has arrived.
