Department for Promotion of Industry and Internal Trade publishes first part of working paper on AI-copyright interface

The Department for Promotion of Industry and Internal Trade (DPIIT) has released Part 1 of its working paper examining the intersection of generative artificial intelligence and copyright law, a move that could become a landmark for AI creators in India. The paper reflects the recommendations of an eight-member committee constituted on April 28, 2025, tasked with assessing whether existing copyright laws adequately address the challenges posed by AI and to suggest amendments or new policy measures. By proposing a hybrid licensing model, the framework aims to balance the rights of content creators with the innovation needs of AI developers.

The working paper evaluates international and domestic approaches to AI training data, including blanket exemptions, text and data-mining exceptions, voluntary licensing, and extended collective licensing. After assessing the limitations of each model, the committee rejected the zero-price licence approach, noting that unrestricted free access could undermine human creativity and reduce the production of original works. Instead, it recommends a hybrid system whereby AI developers receive a blanket licence to use all lawfully accessed content for training without individual negotiations. Royalties would be payable only at the commercialisation stage , with rates set by a government-appointed committee and subject to judicial review. A centralised mechanism would collect and distribute royalties, reducing transaction costs and ensuring equitable access for developers of all sizes.

This approach is particularly beneficial for startups and small AI companies. By avoiding upfront licence fees and simplifying access to training data, early-stage innovators can experiment freely and focus on R&D. The centralised royalty collection system and government-set rates provide predictability, reducing the legal and financial risk that might otherwise hinder new entrants. The framework also encourages innovation while safeguarding creators’ rights, potentially giving India a competitive advantage in AI development and innovation.

Globally, countries such as Japan, Singapore, the European Union, and the United States have adopted varying approaches to AI training on copyrighted works, ranging from permissive text-and-data-mining exceptions to reliance on fair use. However, none combine blanket access, royalty-linked commercialisation, and a centralised distribution mechanism like India’s proposed model. If implemented, India could become a global pioneer in balancing creator rights with AI innovation.

The working paper acknowledges the instrumental contribution of Dr. Raghavendra Rao in its preparation, along with assistance from Ms. D. Sripriya, Mr. Kushal Wadhawan, and Ms. Priyanka Arora. DPIIT has opened the draft for a 30-day public consultation , inviting feedback from creators, AI developers, investors, and other stakeholders. This collaborative approach aims to refine the framework and ensure that it works for all parties, fostering a healthy ecosystem where content creators and AI innovators can coexist.