India's DPDP Act Creates AI Training Dilemma, Stifles Innovation

• India's DPDP Act, with rules notified in Nov 2025, creates a legal gray zone for AI training and bias.
• Section 3's requirement for voluntary public data consent is challenging for AI systems relying on massive, scraped datasets.
• Experts question consent-based models' effectiveness and warn of heavy compliance burdens hindering innovation.
• A widening gap exists between legal expectations and real-world data flow, as third parties often make data public for AI development.
• Rigid compliance could make new AI services unviable for startups and SMEs, impacting India's AI growth.

Why It Matters: DPDP Act's implementation raises concerns about AI innovation, data access, and compliance burden in India.