India's AI Tax Battle: Global Giants vs. Copyright Overhaul

• India proposes a "One Nation, One Licence, One Payment" system by late 2025 to tax AI algorithms, requiring developers like OpenAI and Google to pay royalties for using copyrighted content.
• The new framework mandates blanket licenses for AI training but demands a percentage of revenue into a central royalty pool once commercially deployed, including retroactive payments.
• Legal experts warn the proposal faces constitutional, practical, and economic obstacles, citing concerns over bureaucratic hurdles, royalty rate determination, and enforcement on foreign-trained models.
• Critics argue the system could burden domestic AI developers while global firms bypass compliance, potentially stifling Indian innovation and undermining its AI powerhouse ambitions.
• The Copyright Act, 1957, limits authorship to human creativity, making purely AI-generated content generally uncopyrightable, a point highlighted by the RAGHAV AI case and ANI v. OpenAI litigation.

Why It Matters: India's ambitious AI copyright overhaul aims to tax global tech giants but faces significant legal and practical challenges.