Evolution of AI Copyright and Royalty Regulation in India: UPSC Current Affairs Story Arc

Overview

This arc tracks the transformation of Artificial Intelligence (AI) from a disruptive technological tool to a regulated economic entity in India. It began with major media houses and music labels suing AI giants like OpenAI for allegedly 'scraping' copyrighted Indian content to train Large Language Models (LLMs). The core legal contention involves the circumvention of digital protections intended to safeguard intellectual property. In response to this litigation and the growing digital economy, a government-appointed panel intervened in late 2025, recommending a mandatory royalty framework. This marks a pivotal shift toward 'algorithmic fairness,' ensuring that the creators whose data fuels AI innovation receive financial compensation, effectively ending the era of free data harvesting in India.

How This Story Evolved

Media and music industries sue AI firms for copyright infringement (A) → Government panel responds by proposing a formal royalty framework for AI creators (B) → Policy discourse shifts toward the enforcement of the 'AI must pay' principle (C)

1. 2025-07-03: ANI and IMI vs. OpenAI in India
   More details

   UPSC Angle: Copyright issues: ANI & IMI vs. OpenAI in India.

   Key Facts:

   • ANI and IMI accused OpenAI of copyright violations in 2024
   • Accused of training models on copyrighted Indian content
   • Accused of violating Section 65A of Indian Copyright Act
   • No judgment yet
   • Jurisdiction under question
2. 2025-12-10: AI creator royalties proposed by Govt panel
   More details

   UPSC Angle: Government panel proposes AI companies pay creator royalties.

   Key Facts:

   • AI regulation
   • IPR
   • digital economy
   • AI copyright
   • creator royalties
3. 2025-12-11: AI must pay
   More details

   UPSC Angle: Not exam-relevant

   Key Facts:

   • AI

Genesis

Trigger

The arc was triggered on July 3, 2024 (preceding the 2025 updates) and escalated on July 3, 2025, when ANI and the Indian Music Industry (IMI) filed a lawsuit against OpenAI for violating Section 65A of the Indian Copyright Act.

Why Now

The move was driven by the rapid commercialization of Generative AI, which uses vast datasets of Indian news and music to generate outputs, threatening the traditional revenue models of media and entertainment sectors.

Historical Context

India has historically struggled with 'digital piracy' and 'fair use' doctrines. The National IPR Policy 2016 set the stage for stronger enforcement, but the leap to AI-specific regulation is a new frontier for the Copyright Act of 1957.

Key Turning Points

1. [2025-07-03] ANI and IMI file lawsuit against OpenAI

   It moved the debate from academic ethics to legal liability, questioning the legality of data scraping under Indian law.

   Before: AI companies used Indian data as 'public domain' for training. After: AI firms faced legal threats under Section 65A.

2. [2025-12-10] Govt panel proposes mandatory royalties

   It signaled that the government would not wait for court verdicts to regulate the AI economy.

   Before: No formal mechanism for AI companies to pay creators. After: A proposed framework with set rates for the 'digital economy'.

Key Actors and Institutions

Key Institutions

• Indian Music Industry (IMI)
• Department for Promotion of Industry and Internal Trade (DPIIT)
• Ministry of Electronics and Information Technology (MeitY)
• Intellectual Property Office (India)

Key Concepts

Section 65A (Copyright Act, 1957)

A provision that criminalizes the circumvention of 'Technological Protection Measures' (TPMs) used by copyright owners to protect their work.

Current Fact: ANI and IMI specifically accused OpenAI of violating this section on July 3, 2025.

Algorithmic Fairness

The principle that AI models should not unfairly exploit the data of human creators without equitable compensation or attribution.

Current Fact: The December 10 government panel explicitly cited 'algorithmic fairness' as a justification for creator royalties.

Digital Economy Royalty Framework

A structured payment system where AI companies pay pre-determined rates to content owners for using their data in model training.

Current Fact: Proposed on December 10, 2025, to address the shift toward an AI-driven digital economy.

What Happens Next

Current Status

As of December 11, 2025, the 'AI must pay' principle has been officially adopted into policy discourse, following a government panel's recommendation for set royalty rates.

Likely Next

Expect the notification of specific 'royalty slabs' based on the type of content (e.g., news vs. music) and potential amendments to the Copyright Act to explicitly define 'AI training' as a non-exempt use.

Wildcards

A landmark court ruling in the ANI vs. OpenAI case could either validate the 'fair use' defense for AI training or set a global precedent for high-value royalty settlements.

Why UPSC Cares

Syllabus Topics

• Government policies and interventions for development in various sectors
• Issues relating to intellectual property rights
• Science and Technology- developments and their applications and effects in everyday life

Essay Angles

• The ethics of Artificial Intelligence: Innovation vs. Ownership
• Digital Sovereignty: Protecting Indian creators in the age of global LLMs
• The Economic Cost of Information: Is data truly the new oil if creators aren't paid?

Prelims Likely: Yes

Mains Likely: Yes

Trend Signal: rising

Exam Intelligence

Previous Year Question Connections

• Capabilities of AI, including creating 'meaningful short stories and songs'. — The 2020 question asked if AI can create songs; this arc deals with the legal consequences of AI doing exactly that using IMI's copyrighted data.
• National IPR Policy and the role of DIPP as the nodal agency. — This arc represents the next evolution of that policy, where DPIIT must now handle AI-specific copyright challenges.
• Copyright protection is granted without registration. — Important for Prelims to note that even unregistered music/news scraped by AI is inherently protected under Indian law.

Prelims Angles

• Section 65A of the Copyright Act: Specifically deals with protection against circumvention of technological measures.
• Nodal Agency: The Department for Promotion of Industry and Internal Trade (DPIIT) is the nodal body for IPR and Copyright in India.
• Nature of Copyright: In India, copyright protects the 'expression' of an idea (e.g., a specific news report) rather than the idea itself (e.g., the news event).

Mains Preparation

Sample Question: Discuss the challenges posed by Generative AI to India's Intellectual Property Rights (IPR) regime. How far can the proposed 'AI must pay' royalty framework ensure a balance between technological innovation and creator rights?

Answer Structure: Intro: Context of the ANI/IMI vs. OpenAI case. Body 1: Legal challenges (Section 65A, data scraping, fair use). Body 2: Economic implications (loss of revenue for creators, algorithmic fairness). Body 3: Analysis of the Govt Panel's royalty framework. Conclusion: Way forward—Need for an 'AI-ready' Copyright amendment.

Essay Topic: Artificial Intelligence: The Thief of Creative Labour or the Catalyst of Human Ingenuity?

Textbook Connections

Key Takeaway

The evolution from litigation (ANI vs. OpenAI) to policy (Creator Royalties) signals that India is moving toward a 'compensated innovation' model where AI companies are no longer exempt from intellectual property costs.

All Events in This Story (3 items)

1. 2025-07-03 [Science & Technology] — ANI and IMI vs. OpenAI in India
   In 2024, ANI and the Indian Music Industry (IMI) accused OpenAI of training models on copyrighted Indian content and violating Section 65A of the Indian Copyright Act (on circumvention of tech protections). No judgment has been passed, and jurisdiction is under question.
   More details

   UPSC Angle: Copyright issues: ANI & IMI vs. OpenAI in India.

   Key Facts:

   • ANI and IMI accused OpenAI of copyright violations in 2024
   • Accused of training models on copyrighted Indian content
   • Accused of violating Section 65A of Indian Copyright Act
   • No judgment yet
   • Jurisdiction under question
2. 2025-12-10 [Science & Technology] — AI creator royalties proposed by Govt panel
   A government panel proposed that AI companies must pay creator royalties at set rates. This recommendation addresses intellectual property rights (IPR) and algorithmic fairness in the digital economy.
   More details

   UPSC Angle: Government panel proposes AI companies pay creator royalties.

   Key Facts:

   • AI regulation
   • IPR
   • digital economy
   • AI copyright
   • creator royalties
3. 2025-12-11 [Economy] — AI must pay
   AI must pay.
   More details

   UPSC Angle: Not exam-relevant

   Key Facts:

   • AI