Artificial intelligence (AI) is significantly transforming higher education in India by enhancing teaching, learning, assessment, and academic support systems. This literature review investigates the integration of AI into student learning within Indian higher education institutions, highlighting both opportunities and challenges. A systematic review of literature from 2019 to 2026, drawn from major academic databases, reveals that AI can improve personalized learning, expand access to resources, boost student engagement and collaboration, facilitate adaptive learning, and support the development of essential 21st-century digital competencies. However, challenges such as the digital divide, privacy and data security concerns, algorithmic bias, issues of academic integrity, dependency on AI tools, and insufficient digital literacy are also present. Furthermore, faculty training and institutional support are critical for effective implementation. The study emphasizes the necessity for robust policy frameworks, ethical governance, and responsible strategies for the successful adoption of AI, ultimately advocating for AI as a complementary tool that enhances education while preserving human judgment and ensuring equitable access to quality education.