Major tech firms flag “market harm” in India’s AI copyright proposal

The DPIIT Working Committee is going to come out with its second working paper on the use of AI and copyright issues within two months

Major technology companies are sharply criticising the Department for Promotion of Industry and Internal Trade (DPIIT) working committee's proposed copyright framework for AI training, arguing that the model, centred on a mandatory blanket licence, could undermine India’s emerging AI ecosystem rather than support it.

A recent analysis prepared by a leading global technology company, reviewed by Moneycontrol, warns that the proposal risks slowing down innovation. While noting that the working paper does not show evidence of creative jobs being affected by AI, the company argues that the committee "fails to objectively establish any existing or imminent market harm.”

It adds that the paper "fails to capture how AI is assisting artists in developing better and more high value content."

A major point of concern is the committee’s proposed licensing system, which would require AI developers to obtain a statutory blanket licence to use all “legally accessed” copyrighted works for training.

Although the move is widely viewed as well-intentioned, the analysis argues that the structure may instead make matters worse.

According to the note, the precondition of "lawful access" means copyright owners can still shut out AI developers by placing material behind paywalls.

"A mandatory blanket license does not remove the ‘possibility of hold outs hindering access to the requisite data for training," the note says.

This, it argues, reintroduces the very fragmentation the model claims to solve.

The analysis also warns that the proposal would reverse long-standing copyright policies on infringement. It highlights that the hybrid proposal "reverses" the burden of proof and could force AI developers "to prove that they have not used the content owner’s material even if the output is similar".

The submission further argues that the proposed flat-rate remuneration structure would “disadvantage small creators or niche content creators and favour large-scale content producers.”

These concerns echo the dissenting note recorded by NASSCOM in the committee’s working paper, where the industry body had argued that India’s IT industry "needs a TDM (text-data-mining) exception," pointing to global precedents in Europe, Japan and Singapore.

In a separate submission filed a couple of months ago during the committee’s consultation phase, Business Software Alliance (BSA), representing companies such as Adobe, AWS, IBM, Microsoft, Oracle, Salesforce and OpenAI, urged the government to adopt a clear statutory TDM exception.

The organisation argues that AI training extracts "non-copyrightable information — probabilities, relationships, and patterns," and that using data in tokenised form "does not infringe any copyright.""

BSA also says a TDM exception would "promote AI development and wider economic growth" and give India legal certainty aligned with international trends.