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DPIIT proposes licensing fee for AI companies that train on copyrighted content
DPIIT’s proposal to allow AI developers to train on copyrighted content, for a fee, reflects India’s preference for legislative intervention over courtroom improvisation.
MUMBAI: The Department for Promotion of Industry and Internal Trade’s (DPIIT) Working Paper on Generative AI and Copyright proposes a mandatory licensing regime that would allow artificial intelligence companies to train their models on copyright-protected works, bypassing the thorny question of whether such training constitutes infringement in the first place. The proposal recommends mandating AI developers to pay rightsholders through a government-designated collective body in exchange for access to lawfully obtained content.
The working paper frames the mechanism as one of access and compensation rather than consent. That framing is telling. It sidesteps, rather than resolves, a foundational legal question: does AI training on copyrighted material actually engage exclusive rights under the Copyright Act, 1957?
A primary conceptual difficulty is that the proposal appears to proceed on the basis that AI training implicates exclusive rights under the Copyright Act, 1957 (Act), even though that question is not yet settled in Indian law. Courts have consistently held that copyright protects expression, not information. Rulings such as Eastern Book Company v. D.B. Modak and Barbara Taylor Bradford v. Sahara Media underline that point. If AI training is understood as extracting statistical relationships rather than reproducing expression, there may be no infringement to speak of and nothing to licence in the first place.
The contrast with the United States is structural. American law begins with a broad conception of rights and carves out space for fair and transformative use. Recent cases including Bartz v. Anthropic and Kadrey v. Meta are playing out within that framework, where the central question is not whether copyright is engaged, but whether the use is sufficiently transformative to escape liability. India has no equivalent open-ended doctrine. The fair dealing exemptions under Section 52 of the Copyright Act operate within a closed, exhaustive list, and Indian courts have repeatedly declined to import the American approach.
That is, of course, not to suggest that Indian copyright law is purely exclusionary, in fact, it’s far from it. The 2012 amendment to the Copyright Act and a consistent line of judicial and legislative thinking have favoured access where markets fail. A compulsory licensing framework is already embedded in the Act, and the working paper fits squarely within that tradition.
The European model offers a third point of comparison. The text and data mining provisions under the EU’s Directive on Copyright in the Digital Single Market allow use subject to opt-out, but have struggled to generate meaningful compensation for rightsholders in practice.
The more useful question is whether a mandatory licensing layer is necessary alongside existing and emerging voluntary markets. There is already a growing practice of licensing curated datasets for AI training. These arrangements allow rightsholders to set terms, control use, and price their content. A blanket statutory licence risks displacing that flexibility and removing the ability to refuse access altogether. It also raises familiar concerns: unclear standards for “lawful access”, the possibility of parallel voluntary licensing for premium content, and the absence of a workable method to attribute value across large and mixed datasets.
A pending litigation, ANI Media Pvt. Ltd. v. OpenAI, may shed some light on whether the ingestion and storage of content amounts to infringement under existing Indian doctrine. It will not, however, answer the broader policy question of how, or whether, AI training should be priced.
The more plausible direction of legal development in India, at least at the policy level, is unlikely to replicate the US model of relying on judicial expansion of fair use. Legislative intervention, including some form of licensing, is more consistent with the structure of the Act. The real challenge is not whether to intervene, but whether intervention can be calibrated to accommodate doctrinal uncertainty without undermining voluntary markets that are already beginning to form.
This article is authored by Kaushik Moitra, partner; Karnika Vallabh, counsel; and Nandini Tyagi, associate, Bharucha & Partners.
