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When Algorithms Meet Diplomats
How UK-India's trade pact turned AI governance into the world's newest joint venture
Intelligence is being seriously tested, especially as the United Kingdom and India have just concluded a ground breaking trade agreement that places trust, transparency and accountability in AI at its core. I want to focus on those elements, because the new Comprehensive Trade Agreement represents something quite remarkable in modern policy. Rather than treating AI as an afterthought, it gives serious, deliberate attention to AI governance, establishing what I believe to be a model for future international cooperation on a technology that is reshaping our world. The agreement explicitly recognises artificial intelligence and machine learning as emerging technologies, and commits both our nations to building governance and policy frameworks that ensure their trusted, safe and responsible use. This is not mere diplomatic language. It is a clear signal that we understand AI demands a fundamentally different approach to regulation.
What excites me most is the commitment contained in Chapter Twelve of the agreement, which focuses on ethical use of AI, addressing human diversity and unintended bias, developing technical standards and ensuring algorithmic transparency. These are not abstract concerns. The potential benefits of AI are extraordinary. A few months ago, I attended the UK premiere of 'The Thinking Game' at the Science Museum Group in London, a film about Sir Demis Hassabis and the DeepMind team whose work on predicting the threedimensional structure of proteins could transform drug discovery, personalised medicine and predictive healthcare. AI has already identified potential treatments for Parkinson's disease that had eluded researchers for years.
The benefits go far beyond healthcare, from personalised education to advancing the UN Sustainable Development Goals, from agriculture to financial services. Generative AI is now augmenting human capability rather than merely improving efficiency, and with agentic AI on the horizon, systems will increasingly perform tasks without prompting. Yet this same power demands caution. AI is more autonomous, more opaque and potentially more disruptive to employment and creativity than any technology before it. Geoffrey Hinton, the pioneer behind backpropagation, has warned that without regulation AI could pose existential risks. Campaigns such as the 'Redline Initiative' are already calling for binding limits on unacceptable AI risks.
At the same time, societies are becoming increasingly dependent on these technologies. We have seen proposals in Australia to ban smartphones for those under sixteen, and similar debates in Europe and the United States. Algorithms have amplified misinformation during elections and have been used to generate harmful deepfake content. Governments are embracing AI with enthusiasm, and India is now developing its own sovereign Large Language Model (LLM). Yet the real question is no longer whether a task can be automated, but whether it should be.
It is often said that regulation stifles innovation, but as AI becomes more powerful, thoughtful regulation is essential for widespread adoption and sustainable growth. The early automotive industry offers an illustrative example. Safety standards, driver licensing and traffic rules did not hinder the growth of cars. They enabled it by building public confidence and creating predictable conditions for innovation. So too with AI. Many organisations, especially small and medium sized enterprises, hesitate not because of technical limitations but because of uncertainty about liability, ethics and public acceptance. Clear regulatory frameworks that address bias, data privacy, cybersecurity, deepfakes and accountability will accelerate rather than constrain AI adoption by providing clarity and confidence. Well-designed rules can function as a catalyst for progress, just as environmental regulations stimulated cleaner technologies and requirements for fairness and transparency raised standards across the industry.
Different jurisdictions are now taking different paths. The European Union's AI Act has begun its phased implementation, with full effect expected by 2027. South Korea will introduce its ‘AI Basic Act’ next year, combining a risk-based model with a ‘Digital Bill of Rights’. In the United Kingdom, the previous government convened the first AI Safety Summit in 2023 and created the AI Safety Institute, now the AI Security Institute. There is growing recognition, reflected in the AI Opportunities Action Plan, of the value that regulation can bring.
The question, then, is “how we reconcile these varied approaches so that innovation remains internationally viable?” The answer lies in convergence on global standards. We already have widely accepted international principles, such as those developed by the OECD, the G20 and UNESCO. ISO and IEC standards, including ISO 42001, are being rapidly adopted and require organisations to embed ethical principles of transparency and accountability across the AI lifecycle. The United States risk management framework is also widely used. An International AI Standards Summit has been announced for 2025 to advance harmonisation and reduce fragmentation.
This is where the UK India agreement becomes especially significant. It does not merely set out shared principles. It creates ongoing mechanisms for collaboration. The Innovation Working Group, established under Chapter Fourteen of the agreement, will focus on emerging technologies including AI. Both countries have pledged to participate actively in international standard setting, to support interoperable technologies and to ensure that regulatory frameworks do not create new trade barriers. The more businesses adopt shared standards and strong corporate values in deploying AI, the less regulatory divergence will matter in practice, and the easier it will be for organisations to operate across borders.
Governments are embracing AI with enthusiasm, and India is now developing its own sovereign Large Language Model (LLM). Yet the real question is no longer whether a task can be automated, but whether it should be.
The more businesses adopt shared standards and strong corporate values in deploying AI, the less regulatory divergence will matter in practice, and the easier it will be for organisations to operate across borders.
Before I conclude, I want to touch on Intellectual property. Both in the UK and India we are seeing growing disputes about developers using copyrighted materials to train large language models without permission.
Major publishers, artists and rights holders are pursuing legal action. Governments must act decisively to ensure that creative works cannot be used for training without benefit to those who produced them. Developers must be required to disclose what data they are using. Without this transparency, we risk undermining the balance between human creativity and machine innovation.
To conclude, the UK India Comprehensive Economic and Trade Agreement provides a strong foundation by committing both our countries to cooperation on ethical AI, addressing bias, developing standards and ensuring transparency. Regulation is not a barrier to innovation. It is the framework that will enable AI to grow safely, responsibly and at scale. Our partnership demonstrates that trust, transparency and accountability are not obstacles, but the very conditions that allow this transformative technology to flourish. Together, we can ensure that AI serves the public interest while enabling innovation to thrive.
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Lord Clement-Jones CBE
Liberal Democrat House of Lords Spokesperson For Science, Innovation and Technology, UK
Owned by: Institute of Directors, India
Disclaimer: The opinions expressed in the articles/ stories are the personal opinions of the author. IOD/ Editor is not responsible for the accuracy, completeness, suitability, or validity of any information in those articles. The information, facts or opinions expressed in the articles/ speeches do not reflect the views of IOD/ Editor and IOD/ Editor does not assume any responsibility or liability for the same.
