India is considering a proposal that would make it mandatory for artificial intelligence companies to pay royalties to content creators whose work is used to train large AI models. A government panel has suggested that companies such as OpenAI, Google and other AI developers should compensate rights holders when their data contributes to model training. The proposal marks one of India’s most significant moves toward regulating generative AI and data usage practices.
The panel’s recommendation comes as governments around the world examine whether existing copyright frameworks are sufficient for the increasing use of public and proprietary data in AI systems. India’s proposal seeks to expand the rights of creators by ensuring financial remuneration when their content is scraped, processed or incorporated into datasets that power commercial AI products. Officials involved in the discussions said the objective is to establish fair value for creative and informational work in the AI era.
The current draft suggests that AI companies would need to maintain transparent records of training data and provide mechanisms through which creators can verify whether their content has been used. The proposal also includes the possibility of establishing statutory royalty benchmarks to prevent disputes between creators and technology firms. Government representatives have said that the framework is still under review and will undergo consultation before any final decision is made.
AI firms typically train models on a combination of licensed datasets, public domain material, synthetic data and content scraped from the open internet. As generative AI tools grow in popularity, concerns have increased among authors, publishers, media organisations and digital creators who argue that their work is being used without permission or compensation. The proposal aims to address these concerns by mandating a structured payment framework.
Industry analysts say the move signals a shift in India’s approach to digital policy, particularly as the country seeks to balance innovation with creator rights and competitive market practices. India is one of the world’s largest digital economies, and any policy change affecting AI development could have implications for global companies operating in the region. The panel has highlighted the importance of encouraging innovation while ensuring that creators are not disadvantaged in the expanding AI ecosystem.
Tech companies have not publicly responded to the proposal, but the industry has generally expressed concerns in global discussions that strict data compensation requirements could be difficult to implement at scale. AI developers argue that it may be challenging to track the origin of training data when datasets are large, mixed or sourced from publicly available information. Some also warn that mandatory royalties could slow down AI research or restrict access to widely used data sources.
Supporters of the proposal, however, believe the framework could offer long term benefits by encouraging responsible data practices and establishing clearer rights for creators. Legal experts say that while existing copyright laws provide some protections, they are not built for large scale automated data training systems. Policymakers in India are therefore exploring whether additional mechanisms are needed to modernise the law for AI driven content use.
The proposal also includes recommendations for transparency obligations, requiring companies to disclose categories of data used to train models and to provide explanations about how content influences AI outputs. Transparency has been a key area of global AI discussions, especially as governments examine how models are trained and whether training processes comply with national data regulations.
The panel’s recommendations follow a period of increased scrutiny over AI models in India. Policymakers have raised questions about misinformation risks, bias, safety protocols and the economic implications of AI adoption on India’s digital workforce. The proposed royalty framework is part of a broader effort to shape a regulatory environment that protects creators and users while supporting India’s growing AI sector.
The government has emphasized that the proposal is not intended to limit innovation but to ensure accountability and fairness in the AI value chain. If implemented, India would join a small but growing list of countries exploring compensation frameworks for creators whose work supports AI development. Similar conversations have taken place in Europe and the United States, where creators and media companies have initiated lawsuits or negotiated licensing deals with AI developers.
Analysts say that India’s proposal could influence global debates, particularly as the country serves as a significant market for AI products and digital content consumption. If mandatory royalties become part of national law, companies operating in India may be required to redesign parts of their data sourcing and model development pipelines. This could also encourage more formal licensing relationships between technology companies and local content creators.
The proposal is expected to undergo stakeholder consultations with technology firms, industry associations, creator groups and legal experts in the coming months. Government officials have said they intend to engage with all parties to refine the framework before making any recommendations to the Parliament. The final policy could take multiple forms, ranging from voluntary guidelines to statutory mandates depending on feedback and regulatory priorities.
As AI continues to expand across India’s digital economy, policymakers are seeking to ensure that the benefits of AI development are equitably distributed. The proposed royalty system represents one potential pathway for balancing commercial interests with creator rights in an increasingly data driven environment. For now, the recommendation marks a significant step in India’s evolving approach to AI governance and signals that the country is preparing to address the complex challenges associated with modern AI training practices.