The government has stated that the eligibility of generative AI services for safe harbour protections under the Information Technology Act depends on the nature of the service and the functions it performs. This clarification was provided in response to a question raised in the Lok Sabha by the Minister of State for Electronics and Information Technology. The determination of whether a generative AI system qualifies as an intermediary under the IT Act is not automatic but is instead contingent on the specific operations and roles of the service in question.

The Information Technology Act, particularly section 2(1)(w), defines an intermediary as an entity that facilitates communication between users. The government emphasized that generative AI systems, including chatbot-based services, must be evaluated based on their alignment with this definition. The outcome of this evaluation will determine whether such services are subject to the same legal obligations as traditional intermediaries.

The Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Amendment Rules, 2026, which came into force on February 20, provide a framework for assessing the responsibilities of intermediaries. These rules, notified on February 10, have introduced new obligations for entities that facilitate digital communication, including potential requirements for content moderation and user verification.

The classification of generative AI services under the IT Act may have significant implications for compliance and liability. Companies offering such services may face increased regulatory scrutiny and operational costs if they are deemed to fall within the intermediary definition. Additionally, the lack of clear guidelines may lead to uncertainty in governance and market reactions, as businesses navigate the evolving legal landscape.

The government's stance on generative AI services highlights the need for ongoing dialogue between regulators and industry stakeholders. As the use of AI continues to expand, the legal framework will need to adapt to address emerging challenges. The situation remains dynamic, with further developments expected as the implications of the new rules become clearer.