India is preparing to rewrite the rules for how artificial intelligence companies can use locally created content. This is a signal that the nation has finally begun an assertive attempt to define the rules before global norms solidify.
Putting a new royalty system in place ensures that tech products from OpenAI, the Google AI suite, and other firms will pay for training their models on Indian content, with payments directly linked to their earnings.
The draft proposal primarily aims to move beyond vague commitments and symbolic compensation. Instead, it calls for a central organization that would collect payments from an AI company and distribute them to its creators.
Rewarding them without having to track how their work is used in complex, opaque datasets. The government has now invited public and industry feedback for 30 days before finalising the draft.
India’s position is in sharp contrast to the United States, where developers of AI routinely take advantage of the ‘fair use’ doctrine in scraping publicly available content without paying any compensation to the creators. Japan goes even further, permitting widespread use of material for AI training under flexible copyright rules.
The European Union stands somewhere in the middle, granting creators the right to opt out. India seems to be charting a different path. Creators are expected to be paid automatically, and the panel has rejected opt-out mechanisms as unworkable and unenforceable.
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It has evoked a mixed response from the technology ecosystem. Nasscom, which represents companies such as Microsoft and Google, warned that compulsory royalties would be a ‘tax on innovation’ and an obstacle to India’s progress in AI research.
The Motion Picture Association, which represents Netflix, Disney, and others, argued that existing copyright laws already provide sufficient protection, and that any gaps, if any, could be filled by licensing agreements.
At the same time, the Indian news agency ANI has filed a lawsuit against OpenAI, reportedly alleging that it used copyrighted content without its prior consent. This has added urgency to the wider discussion concerning AI training data.
This draft policy remains under review as the government weighs feedback and tries to balance out creator rights with technological growth. If implemented, India’s AI royalty policy might just become a global template for regulating data that powers modern AI systems.