The development of artificial intelligence (AI) and automation has had a significant impact on the practice of knowledge management, placing an emphasis on speed, efficiency, and evidence-based decision-making processes. However, AI-driven knowledge systems are typically deficient in many features that can be attributed to humans, namely ethics, intuition, and situational awareness. Hence, the Indian Knowledge System, characterized by experiential learning, holism, and wisdom, can make an important contribution to contemporary digital knowledge frameworks. The purpose of the paper is to assess the contribution of IKS in the era of digitization and to examine the potential for integrating it into knowledge management frameworks driven by AI. Secondary data from academic journals, government policy documents, and industry papers will be analyzed using thematic analysis. The results of this analysis will reveal that while AI provides increased efficiency, the use of IKS improves tacit knowledge management and makes it more ethical. Hence, a hybrid KM framework will be proposed.