India Proposes Mandatory Royalties for AI Training Data

India has unveiled a landmark proposal to mandate statutory payments by AI developers for the use of copyrighted works in model training. The move positions India as the first country to pursue a compulsory licensing regime for generative AI, aiming to balance technological progress with fair compensation for creators.

Government Endorses a Mandatory Licensing Framework

An expert committee under the Department for Promotion of Industry and Internal Trade recommended a ‘hybrid model’ that combines blanket licensing with statutory remuneration. Under this system, AI developers would receive automatic access to copyrighted works for training, while creators would be guaranteed royalty payments through a regulated mechanism.

Industry Opposition Labels Plan a Barrier to Innovation

Industry bodies, led by Nasscom, sharply criticised the proposal, arguing that mandatory licensing amounts to a tax on innovation. They highlighted the absence of robust market studies and pointed out that neither the US nor the EU has adopted compulsory licensing for AI training, even where debate on creator remuneration is active.

Government Pushes for Equitable Access and Compensation

Despite industry objections, government ministries expressed full support for the framework. The technology ministry noted that the model supports broad access to training data while ensuring proportionate compensation for creative labour. It argued that the structure aligns with India’s long-term digital and innovation goals.

Exam Oriented Facts

• India is the first country to propose mandatory royalties for AI training data.
• DPIIT’s committee recommended a blanket licence with statutory payments.
• Nasscom opposed the plan, calling it a tax on innovation.
• Government ministries unanimously backed the proposed framework.

Creation of a Central Royalties Collective

The proposal includes establishing a Copyright Royalties Collective for AI Training as a government-designated non-profit entity. It would collect and distribute royalties to rights holders and streamline compliance for AI developers. If adopted, the system would create a regulated national marketplace for training data, reshaping India’s AI ecosystem.