Artificial Intelligence (AI) is transforming the education sector at a radical pace by making learning personalized, administrative work automated, and decisions data-driven. AI in education encompasses intelligent tutoring systems, AI-based tests, adaptive learning systems, and administrative automation. AI has been introduced in the education sector by most developed nations to enhance students’ interest and academic performance. AI in education, however, requires end-to-end policy guidelines, ethical principles, and sensitization of the public to facilitate responsible and inclusive implementation. India has started integrating AI into education policies through the efforts of the All-India Council for Technical Education (AICTE) and the National Education Policy (National Education Policy 2020 Ministry of Human Resource Development Government of India, 2020). However, unlike China, the USA, and European countries, India is still behind in systematic AI curriculum implementation in K-12 education and a massive-scale AI sensitization program among teachers and students. This research paper aims to analyze AI’s impact on education, compare international AI education policy with India’s strategy, and assess the level of AI awareness among teachers and students. The research will also examine AICTE’s role in facilitating AI in education and examine the obstacles that are hindering India’s advancement in AI adoption. The paper also explores policy recommendations to ensure that India can implement AI in its education sector effectively while ensuring ethical and data security concerns.