Chatgpt,Deepseek AI Tools BANNED by Indian Finance Ministry.
For the security of the country’s financial records, the Finance Ministry has officially banned AI tools but has reportedly ordered not to use them.
The Finance Ministry has officially banned the use of AI tools such as ChatGPT and DeepSeek on office devices, citing concerns over potential leaks of confidential government data and documents. The directive, issued with the approval of Finance Secretary Tuhin Kanta Pandey, applies to all AI-powered applications used in the ministry’s network. The order was implemented just ahead of the Union Budget announcement on January 29, 2025. However, sources have confirmed that the ban will remain in effect even beyond the budget period, indicating a long-term approach to data security concerns. The decision comes amid growing global scrutiny over the security implications of AI applications, especially those developed by Chinese firms. DeepSeek, which recently launched its R1 chatbot, is under growing regulatory scrutiny. The AI startup claims its technology rivals the capabilities of leading AI models in the US, but operates at a fraction of the investment. Australia and South Korea have also restricted access to DeepSeek on government devices due to data security risks, further fuelling concerns about AI-powered tools in official environments.
Despite repeated inquiries, the Finance Ministry has not given any official response regarding the ban. However, industry experts suggest that the ban reflects widespread apprehensions over the role of AI in handling sensitive government data. The move is in line with similar actions taken by other governments to mitigate security threats posed by AI applications with uncertain data governance policies.
A formal letter titled “Avoiding use of AI tools/apps in office devices” has been sent to all departments under the ministry, including the Department of Economic Affairs, Department of Expenditure, Department of Public Enterprises, Department of Investment and Public Asset Management (DIPAM) and Department of Financial Services. The letter clearly warns that AI tools pose a risk to the privacy of government data and advises that their use on official devices should be strictly avoided. Employees of all departments have been directed to comply with the directive.
As AI continues to evolve and become integrated across various sectors, the debate on balancing technological advancements with national security interests is likely to continue. The Finance Ministry’s decision signals a cautious approach to the adoption of AI within government institutions, prioritising data security over convenience and innovation.
- The Indian Finance Ministry has indeed taken a cautious approach to the use of third-party AI tools to handle sensitive government data.
1. Advisory against external AI tools: In May 2023, the ministry issued an advisory directing officials to avoid using AI tools developed by third parties, especially for processing sensitive financial or official data. This includes platforms that store data on external servers, which could lead to a risk of data breach or unauthorized access.
2. Data security concerns: The primary motivation is to protect sensitive government and citizen data. The advisory raises apprehensions that third-party AI services may retain or misuse input data, potentially violating India’s data localization norms and privacy regulations.
3. Push for in-house solutions: The ministry emphasized on developing secure, in-house AI tools to handle official tasks, ensuring compliance with India’s data protection framework. This is in line with broader efforts to promote digital sovereignty and reduce reliance on foreign platforms.
4. Comprehensive cybersecurity measures: The directive is part of India’s increased focus on cybersecurity, especially in critical sectors such as finance. It follows similar guidelines from other departments, which restrict the use of external software/services without proper scrutiny.
5. Context of data localisation: India’s draft Digital Personal Data Protection Bill (2022) and the RBI’s data localisation policies likely influenced the move, emphasising the need to keep sensitive data within national borders.