As Artificial Intelligence (AI) and Large Language Models (LLMs) reshape the global digital ecosystem, the Indian government is preparing to introduce a royalty-based framework that will require AI companies to share a portion of their global revenue with Indian content creators whose works have been used to train their models.
This policy aims to ensure ethical data use and protection of intellectual property (IP) in AI model development. Under the proposed system, companies will have to disclose how, why, and from which sources they have collected and used data for training purposes.
Blanket Licensing System Under Consideration
A senior government official confirmed that the new mechanism would resemble a “blanket licensing model”, allowing AI companies to use copyrighted material after paying a fixed royalty.
This means companies must provide clear details about the type and proportion of content used for model training — whether text, audio, video, or images. For example, if a company declares that 30% of its training dataset comprises written material, a proportional share of royalty will go to the content creators holding the relevant copyrights.
CRCAT to Handle Royalty Collection and Distribution
To implement this framework, the government plans to establish an industry body called the Copyright Royalty Collective for AI Training (CRCAT). The CRCAT will oversee the rights of registered content creators and manage royalty collection and distribution based on pro-rata usage or a general value assessment model.
All content creators who wish to claim their royalty share will need to register with CRCAT. Officials noted that this structure is essential since it is practically impossible to precisely determine each creator’s contribution to the training of an AI model.
Copyright Law Amendments on the Horizon
The Department for Promotion of Industry and Internal Trade (DPIIT), under the Ministry of Commerce and Industry, may propose amendments to India’s Copyright Act once consultations on the draft policy are completed.
The proposed changes would formalize the commercial use of copyrighted material in AI training, making royalty payments a legal requirement. Companies using Indian content to train their AI and LLM systems would be obligated to pay royalties at rates determined by the government or courts.
Officials say this move would strengthen India’s IP protection framework while ensuring that domestic creators receive due compensation from global AI corporations benefiting from their work.
Promoting Transparency and Data Accountability
According to government sources, the initiative goes beyond financial compensation — it also aims to enforce data transparency and accountability in AI development. Companies would be required to disclose where the data was sourced from and how it has been applied in different AI projects.
This would help prevent data theft and unauthorized model training, both of which have become contentious global issues. Officials emphasized that India’s goal is to create a regulatory ecosystem that protects creative rights without stifling innovation in the AI sector.
Industry Impact and Emerging Challenges
Experts believe the proposed royalty system could increase operational costs for AI firms, particularly those relying heavily on publicly available or third-party data. Companies may need to conduct detailed legal audits of their datasets to ensure compliance.
However, industry analysts view the move as a progressive step that could position India as a leader in ethical AI governance and copyright policy. The model could also inspire other countries to create similar frameworks for protecting creators’ rights in the AI era.
Balancing Innovation and Intellectual Rights
The government’s objective is clear — to promote innovation while safeguarding the intellectual property of Indian creators. In an era where AI-generated outputs are increasingly commercialized, this balance is critical for building a fair and sustainable digital future.
If implemented, India could become the first country in the world to legally enforce a revenue-sharing royalty model for AI training, marking a global precedent in responsible and transparent artificial intelligence development.
