India Proposes World’s First Mandatory Royalties Framework for AI Training

India Unveils Global First: Mandatory Royalty Payments for AI Training Data

India has taken a pioneering step in global AI governance by proposing a statutory licensing regime that would require AI developers to pay royalties for using copyrighted works in training datasets. If implemented, India would become the first country to legally mandate compensation for creators in the generative AI ecosystem.

Government Endorses Hybrid Licensing Mechanism

The proposal, drafted by an expert committee under the Department for Promotion of Industry and Internal Trade (DPIIT) , recommends a hybrid model that grants AI firms automatic access to copyrighted material while ensuring creators receive regulated, statutory remuneration . The system aims to prevent copyright disputes while enabling smoother AI research and innovation.

Industry Pushback Over Innovation Costs

Industry associations—particularly Nasscom —have strongly opposed the move. They argue that statutory licensing effectively imposes a “ tax on innovation ,” warning that added compliance costs may deter startups and slow AI development. They also noted that no major jurisdiction, including the US or the EU, has imposed compulsory licensing for AI training despite ongoing global debates.

Government Stands Firm on Creator Rights

Despite criticism, multiple ministries have endorsed the proposal, emphasising that India needs a balanced digital ecosystem where creators, publishers and artists receive fair compensation. Officials stressed that enhanced access to training data paired with equitable payouts promotes sustainable AI development aligned with long-term national goals.

Creation of a Central Royalty Management Body

The proposal outlines a Copyright Royalties Collective for AI Training , a government-designated non-profit entity responsible for collecting and distributing payments. It would function as a unified marketplace for training datasets and help AI companies maintain compliance with copyright rules.

Exam Oriented Facts

• India is the first nation to propose mandatory royalty payments for AI training data.

• DPIIT panel recommends a blanket licence + statutory payment model.

• Nasscom opposes the mechanism, citing innovation burdens.

• Government ministries unanimously support the proposal.