Government Body Recommends AI Companies Pay Royalties to Rightsholders for Copyrighted Content

Department of Promotion of Industry and Internal Trade (DPIIT), under the Ministry of Commerce & Industry, has proposed new recommendations to tackle the copyright issues involving artificial intelligence (AI) models. The government committee suggests implementing a blanket licence for all AI companies that are developing in-house commercial models, such as Google, OpenAI, Anthropic, and others. This will require the companies to make a flat payment to rightsholders whenever the AI models are trained on their copyrighted content. DPIIT highlights that this measure will protect both the content creators as well as eliminate the legal ambiguities around fair use.

DPIIT Proposes Blanket Licence for AI Companies

A 125-page working paper, titled “One Nation One Licence One Payment: Balancing AI Innovation and Copyright,” was published by DPIIT on Tuesday. The government body highlighted that this is just the Part 1 of the paper, which “examining the intersection of generative artificial intelligence (AI) and copyright law.” The core recommendation in this paper is a mandatory blanket licence, meaning AI firms would not need individual agreements with every content owner, and a centralised payment mechanism to compensate rights-holders when their work is used.

The eight-member committee convened by DPIIT rejects unfettered access to copyrighted data for AI training without compensation. It argues that allowing free, unrestricted use of copyrighted content would erode incentives for human creators, including authors, artists, journalists and other rightsholders, which could damage the creative ecosystem over time.

Instead, the working paper recommends a hybrid licensing model in which AI developers get a blanket licence to use any lawfully accessed copyrighted works for training AI models, without negotiating individually with copyright owners.

The paper also recommends creating a system for collection and disbursement of the royalties owed by the rightsholders. The royalties will be paid only when the AI models using the data for training are commercialised, rather than on every use of content.

Additionally, a new centralised body, tentatively named Copyright Royalties Collective for AI Training (CRCAT), would collect royalties from AI companies and distribute them to creators, including those not currently part of formal collective-management organisations (CMOs), DPIIT suggests. The paper also mentions that royalty rates would be fixed by a government-appointed committee.

Moreover, the paper proposes that royalties should be retroactive, meaning firms that have already used Indian copyrighted works to train models for commercial deployment would also be liable for payment under the new regime.

The draft also rejects alternative approaches such as a “zero-price licence” or an “opt-out” text-and-data-mining exception (where content owners would need to individually opt out before their work couldn't be used). Committee members said both these approaches create unfair burdens on creators, especially those from smaller organisations or without resources to police AI datasets.

DPIIT has opened the draft for public consultation, inviting feedback from stakeholders over the next 30 days.