India just dropped a bombshell that could reshape how OpenAI and Google operate in one of their fastest-growing markets. The country's Department for Promotion of Industry and Internal Trade has proposed a mandatory royalty system for AI companies training on copyrighted content, giving major AI firms just 30 days to respond to what could become one of the world's most interventionist approaches to AI regulation.
India's government isn't waiting for the global copyright debate to sort itself out. On Tuesday, the country's Department for Promotion of Industry and Internal Trade released a framework that would fundamentally change how AI companies access training data - and it's giving OpenAI, Google, and other major players exactly 30 days to weigh in.
The proposal centers on what India calls a "mandatory blanket license" system. AI companies would get automatic access to all copyrighted works for training, but they'd have to pay royalties to a new collecting body made up of rights-holding organizations. That money would then flow to creators whose work gets scraped into commercial models.
It's a striking departure from how the US and Europe are handling the copyright crisis in AI training. While American courts debate fair use and European regulators focus on transparency requirements, India is proposing to skip the legal uncertainty entirely by making payment mandatory upfront. The eight-member committee behind the proposal, formed in April, argues this approach would "avoid years of legal uncertainty while ensuring creators are compensated from the outset."
The timing isn't coincidental. India has become a critical market for AI companies, with OpenAI CEO Sam Altman calling it the company's second-largest market after the US and noting it "may well become our largest." According to the committee's 125-page submission, AI firms are deriving significant revenue from Indian users while relying on Indian creators' work to train their models - making it logical that "a portion of that value should flow back to those creators."
But the tech industry isn't buying it. Nasscom, which represents technology firms including Google and Microsoft, has filed a formal dissent arguing India should adopt a broad text-and-data-mining exception instead. The group warns that a mandatory licensing regime could slow innovation and suggests rightsholders who object should be allowed to opt out rather than forcing companies to pay for all training data.
