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Automation and Robotics Sector
Our Automation and Robotics Expertise
The Automation and Robotics industry is largely a B2B (business-to-business) dominated market wherein automated software, hardware and robots replace manual labour so as to accelerate the quality and efficacy of industrial performance. Industrial automation and robotics have been sought by industries across sectors, including the electrical/electronics, automotive, metal and machinery, plastic and chemical products and food industries. Robotic Process Automation (RPA) is estimated to increase by 57% in one year and over half of all Indian businesses will engage in its practice by 2024, creating a large demand for automation and robotic technology. Key categories where India is employing RPA solutions include automated material handling through mobile robots or conveyor systems; warehouse management through sensors, computer numerical control (‘CNC’) machines etc. and factory automation in manufacturing and energy sectors. The Government of India is also evaluating its stance in this space and has published a discussion paper on the National Strategy for Artificial Intelligence and Responsible AI which underline the potential and challenges faced by India in the automation and robotics sector.1
NDA has been at the forefront of developing and cultivating expertise in the ever-advancing technology sector including automation and robotics. Working closely with the industry and regulators, our technology practice consists of experts who deeply understand the cutting-edge trends in areas such as data analytics, digital rights, consumer protection, satellites, augmented reality, drones, robotics, blockchain, artificial intelligence, e-payments, etc. Our research focus and constant interaction with clients also keeps us abreast of new business models which helps us in staying ahead of the bell curve. This has led to the team being able to navigate and provide solutions to complex issues which arise in the legal, tax and regulatory space associated with the constantly evolving technology sector.
We have a dedicated disruptive technology practice which extensively focuses on new-age legal and regulatory issues. A unique contribution to our ability comes from the fact that some of the team members have gained experience in the technology industry prior to joining NDA, and thus bring a lot of value additions to the team in terms of industry knowledge.
REGULATORY AND LEGAL FRAMEWORK APPLICABLE TO THE INDUSTRY/ SECTOR
With the increasing adoption of automation, there also exist risks of protocol standardisation, intellectual property violation and data ownership/privacy concerns, among others.
Intellectual Property Laws: With a tenfold increase in the number of AI based patent applications filed in between 2012 and 2018, India has vast potential for intellectual property protection of automation and robotic patents.2 From IoT, machine learning, Augmented Reality and Virtual Reality to autonomous guided vehicles, innovative hardware, it is important that innovation is adequately protected through relevant registrations and documentation.
Data protection: With an ever-increasing reliance on big data for automation, data protection and privacy laws play a key role in this industry. While India does not have a dedicated data protection statute yet, the Data Protection Bill, 2021 is under discussion in the Parliament, and the Government is also considering an independent framework on non-personal data. This is in addition to special categories of data such as those relating to sensitive personal data, geospatial data, financial data and health data.
Consumer protection laws: When products involving automation and robotics are provided to consumers, the manufacturer, seller and service provider are responsible for any harm caused by means of a defective product. The Consumer Protection Act, 2019 has introduced a product liability regime in this regard.
Safety Standards: Various industries may have specific standards which must be complied with.Published by the Bureau of Indian Standards, several safety protocols have been issued regarding the manipulation of industrial robots. They include but are not limited to safety, presentation of characteristics, performance criteria related test methods and co-ordination of systems and motions, each of which has a separately issued ISO standard to be followed.3
Drones: Drones form an important part of automation of processes, and are being used for deliveries, surveys, and even remote repairs. India has sector-specific rules on drones requiring registration and limited regulations on operations.
Employment: The primary objective behind the growth and development in robotics systems is the demand for automation across a wide variety of industries and sectors. With the ultimate objective of reducing man hours and increasing efficiency, several prominent companies across the world have actively prescribed to the practice of utilizing automated and robotics systems as a replacement for the human workforce. This wave of automation, driven by AI is creating a gap between the current employment related legislation in force and the new laws / employment framework that is required to be brought into place to deal with the emerging automation via the use of automation and robotics systems in the workplace. As employers incorporate such systems into the workplace, it is pertinent that they simultaneously must adapt their compliance systems accordingly.
Tax: Under Indian tax law, generally, a PE is constituted if a non-resident carries on business in India either through a fixed place of business (office, branch, factory, work shop) or through employees / dependent agents. When a non-resident provides services in India through the use of robots or automated systems situated in India, questions may arise as to whether it would constitute a PE for the non-resident in India. A typical example of this would be a foreign service provider who provides services in India through the use of artificially intelligent robots situated in India. Further, even if the AI robot is not located in India, it may constitute a PE in India if the internet connectivity of the robot is directly linked to a server located in India. In case of the latter, the discussions around whether servers/ websites constitute a PE become relevant. Since the jurisprudence on this issue is still evolving, what activities may constitute a PE, in similar situations is still not very clear.
Machine liability: Legal personhood is invariably linked to individual autonomy, but has not been granted exclusively to human beings. The law has extended this status to non-human entities as well, whether they are corporations, ships, and other artificial legal persons. No law currently in force in India recognizes artificially intelligent entities such as AI-based robots to be legal persons. The question of whether legal personhood can be conferred on an artificially intelligent entity boils down to whether the entity can and should be made the subject of legal rights and duties. The essence of legal personhood lies in whether such entity has the right to own property and the capacity to be sue and be sued. This debate has been brought to prominence because of various incidents, including an accident caused by an autonomous car being tested by Uber, in which an individual died. In such cases it is crucial to ascertain whether the car manufacturer, original equipment manufacturers, software provider, service provider and/or the AI-driven machine itself should be held responsible.
The robotics and automation sector is ever-evolving and throws up new challenges at the pace at which the technology itself develops. Deploying this technology on a commercial scale requires a careful and holistic assessment of the regulatory framework, which is often fraught with complex issues and uncertainties. Given the proven and extensive track record of the technology team at NDA, NDA is well-equipped to advise on matters across the industry, including issues which require a nuanced cross-border understanding of corporate, tax, and regulatory issues.