India: AI Royalty Proposal

What happened

India is considering a new royalty system requiring AI companies, including OpenAI and Google, to compensate content creators for using copyrighted material to train AI models. A government panel proposes a centralised royalty system, replacing the 'fair use' approach, where AI firms would pay a central body representing copyright holders for access to Indian content. This framework, termed 'one nation, one licence, one payment', grants large language model developers access to copyrighted content while ensuring creator compensation. The proposal faces a 30-day industry challenge period before government review.

Why it matters

This proposal introduces a new operational constraint for AI developers, mandating a licensing and payment mechanism for training data sourced from India. It shifts the burden of compliance and financial outlay onto procurement and legal teams responsible for AI model development and data acquisition. The absence of an opt-out system, unlike the EU model, increases due diligence requirements for ensuring proper licensing and payment for Indian content, potentially creating a new oversight burden for compliance and platform operators regarding data provenance and usage.