The Government of India has proposed a system under which AI companies would be required to pay fees when using copyright-protected content for model training. For major AI companies such as OpenAI and Google, India is a highly prioritized market with exceptional growth potential. As a result, this policy proposal is expected to have significant implications for the global AI industry.
The framework announced by the Department for Promotion of Industry and Internal Trade (DPIIT) would allow AI companies to access all types of copyrighted works in exchange for mandatory payments to a new collection agency formed by rights-holding organizations. The collected fees would then be distributed to creators, and the government explains that the system will reduce rights-clearance costs for AI companies while ensuring fair compensation for creators.
Unauthorized use of copyrighted content has become a contentious issue worldwide. Concerns were recently raised that OpenAI’s Sora 2 could generate images resembling popular Japanese characters, and the company also faces lawsuits related to its use of books for training without permission. As governments across the globe explore regulatory approaches to AI training, India has signaled a strongly interventionist direction by proposing an exchange of “usage-fee payments for unrestricted access.”
If implemented, AI companies would operate under rules that differ from Western approaches, which tend to emphasize transparency and the development of fair-use standards. OpenAI has openly stated that India could become its largest market in the future, making the design of local regulatory systems a critical factor in its business strategy. Despite the policy goal of supporting creators, the industry association NASSCOM opposes the compulsory licensing scheme on the grounds that it may hinder innovation, calling instead for an opt-out model. The Business Software Alliance has similarly argued that reliance on licensing frameworks is not necessarily the optimal solution.
The proposal is still in the public-comment stage, and companies and stakeholders are required to submit their opinions within the next 30 days. The government will then compile its final recommendations. Although details of the system will continue to be debated, it is clear that India intends to play an assertive role in shaping global rules for AI training.
How will a balance be struck among the interests of AI companies, creators, and the enormous Indian market? This policy proposal is poised to influence not only India’s regulatory landscape but also the very structure of global AI business.