DPIIT Proposes New AI and Copyright Policy: Hybrid Licensing Model to Balance Innovation and Creator Rights

India is stepping into uncharted territory as it confronts the complex intersection of artificial intelligence (AI) and copyright law. On Tuesday, the Department for Promotion of Industry and Internal Trade (DPIIT) unveiled the first part of its working paper exploring how the nation can regulate generative AI while safeguarding creators’ rights. The draft comes after an eight-member expert committee was tasked with reviewing current laws and recommending changes to ensure India remains both innovative and fair in the AI space.

The committee’s working paper analyzed global models for AI copyright regulation, including blanket exemptions for AI training, text-and-data-mining exceptions with opt-out options, voluntary licensing systems, and extended collective licensing. After careful evaluation, it concluded that no single existing framework fully addresses India’s dual objectives: protecting creators and promoting AI innovation. Notably, the committee dismissed the concept of a “zero-price license,” which would allow AI developers to freely use all content without compensation, warning that such a model could undermine human creativity and reduce the production of high-quality content over time.

Instead, the paper introduces a hybrid licensing model designed to balance both interests. Under this system, AI developers would receive a blanket license to train their systems using any lawfully accessible content without needing individual permissions. Royalties would only apply when the AI tools are commercially deployed, with rates determined by a government-appointed committee and subject to judicial review. A centralized mechanism would collect and distribute these royalties, simplifying compliance for both large tech companies and smaller developers while ensuring fair compensation for creators.

The draft acknowledges the contributions of Dr. Raghavendra Rao and support from committee members D. Sripriya, Kushal Wadhawan, and Priyanka Arora in shaping the document. With the release of this working paper, DPIIT has opened a 30-day public consultation period, inviting stakeholders and the public to share feedback that could shape India’s AI and copyright landscape for years to come.

What Undercode Say: Balancing AI Growth With Creative Incentives

The hybrid licensing model proposed by DPIIT is a calculated attempt to balance innovation with creative rights—a challenge that many countries are still grappling with. By allowing AI developers a blanket license for lawful content access, India aims to remove cumbersome negotiation hurdles and reduce legal ambiguity, which is particularly beneficial for startups and smaller AI firms that may lack the resources to manage complex licensing agreements.

At the same time, the conditional royalty system ensures that creators are financially recognized when their work contributes to commercial AI products. This could prevent the erosion of incentives for original human-generated content, a concern that has been central to global debates about AI and intellectual property. A government-regulated royalty mechanism also adds a layer of predictability for businesses, ensuring that the system is not just fair but administratively manageable.

Internationally, India’s approach positions it as a forward-thinking player in AI regulation. Unlike blanket exemptions seen in some jurisdictions, this hybrid model emphasizes equitable value distribution while maintaining flexibility for AI research. This could attract foreign AI investment and collaboration, positioning India as a competitive hub for AI development.

However, challenges remain. Determining the exact royalty rates and operationalizing the centralized collection mechanism will require precise governance and transparency. The effectiveness of judicial review in resolving disputes will also be crucial in maintaining confidence among creators and developers alike. Furthermore, as AI technology evolves rapidly, periodic policy updates will be necessary to ensure that the system remains relevant and responsive to new AI applications.

This draft also sets a precedent in treating AI not as a purely technological issue but as an ecosystem where creativity, commerce, and law intersect. By acknowledging the risks of a zero-price license model, the committee demonstrates an understanding that the long-term health of India’s creative industries depends on maintaining incentives for human authorship alongside AI advancement.

The consultation period offers a rare opportunity for multi-stakeholder input, which could help fine-tune the royalty system and operational mechanisms. Thoughtful engagement from both the tech industry and creative sectors will be critical to creating a balanced framework that encourages AI innovation without compromising intellectual property rights.

Fact Checker Results

✅ DPIIT has released the first part of its working paper on AI and copyright.
✅ The hybrid licensing model proposes royalties only on commercial deployment.
❌ No blanket “zero-price license” will be implemented, as per committee recommendations.

Prediction

📊 India’s hybrid AI copyright framework is likely to set a global example, balancing creator incentives and technological growth. Startups could benefit from simplified licensing, while large AI firms will adapt to royalty obligations. The next 2–3 years may see increased foreign AI investments and collaborations, as legal clarity boosts confidence. Creative industries could see steadier monetization of their work through AI contributions, potentially creating a sustainable ecosystem for innovation and human-generated content alike.