Exclusive vs Non-Exclusive Copyright Licences Between UK and Indian Companies

When a UK company licenses software, content or designs to an Indian company, or the reverse, the single most important drafting choice is whether the licence is exclusive or non-exclusive. A copyright licence India UK company deal can look similar on the surface and operate very differently, because Indian and English law treat exclusivity, duration and territory in different ways.

This guide explains the copyright licence India UK company decision: how Indian law treats assignments and licences, the Section 19 defaults that catch the unwary, what an exclusive licensee can do, what a non-exclusive licensee cannot, how royalties and tax work, and a drafting checklist. UK-law points should be confirmed with UK advisers, because Halverton & Co. is an Indian law firm and does not advise on English law.

Licence or assignment: the first choice

An assignment transfers ownership of some or all of the copyright. A licence permits use while the owner keeps title. Under Section 18 of the Copyright Act, 1957, the owner may assign copyright, wholly or partially and generally or subject to limitations, for the whole or part of the term. Under Section 30, the owner may grant any interest in the copyright by a licence in writing signed by the owner or the owner’s authorised agent.

Section 30A applies the rules on assignments in Sections 19 and 19A to licences, with the necessary changes. That means that formalities and defaults which apply to assignments also apply to licences in India, which surprises many parties used to the English rules. A UK company granting an Indian licence should draft as if the Section 19 requirements apply.

The commercial choice follows control. If the UK company wants to keep ownership and receive royalties, a licence is appropriate. If the Indian company needs to own what it builds, an assignment with a licence back may be more suitable. A copyright licence India UK company agreement should say plainly which it is, and not leave it to implication.

Exclusive licences under Indian law

An exclusive licence gives the licensee the right to use the work in the licensed manner to the exclusion of others, including the licensor if the contract says so. Section 19 requires that an assignment, and by Section 30A a licence, be in writing and identify the work, the rights, the duration, the territory and the royalty or consideration. Defaults apply if these are omitted: if the period is not stated, it is deemed to be five years, and if the territory is not stated, it is presumed to extend to India only.

Two other Section 19 points matter. If the licensee does not exercise the rights within one year of the licence, the licence is deemed to lapse unless the agreement says otherwise. And the royalty or consideration should be specified, with a way to revise it. A copyright licence India UK company agreement that omits these points may produce results neither side expected, such as a licence that ends after five years or does not cover the UK.

An exclusive licensee has stronger enforcement rights. For the civil remedies chapter of the Copyright Act, Section 54 treats an exclusive licensee as an owner, so it can sue infringers in its own name. In English law, a similar point is found in the Copyright, Designs and Patents Act 1988, under which an exclusive licence must be in writing signed by the owner and the exclusive licensee has the rights of an assignee against third parties, which UK advisers should confirm.

Warranties and indemnities deserve attention in both directions. A licensor normally warrants that it owns or controls the rights and that the work does not infringe third-party rights, subject to limits. A licensee gives warranties about its use. Cap liability in a way both parties can accept, and think about who handles claims from third parties. In cross-border deals, the practical question is which court or tribunal will decide and whether its decision can be enforced against assets in the other country.

Non-exclusive licences and their limits

A non-exclusive licence lets the licensee use the work while the licensor remains free to license others and to use the work itself. It is the standard form for software licences, content licensing and stock assets. The licensee gets contractual rights, but generally cannot sue infringers in its own name under Indian law, since it is not treated as an owner for the civil remedies chapter. Only the owner or an exclusive licensee can sue.

A non-exclusive licensee needs clear contractual rights on sublicensing, modification, hosting and use by affiliates, because without express words these are not implied. For software, add rights to use in the group, to make backups and to use on specific platforms. For content, add rights to adapt, translate and distribute in particular media.

Because a non-exclusive licensee depends on the licensor to enforce, the contract should say whether and how the licensor will act against infringement in the licensed territory, who pays and who keeps recoveries. Without this, an Indian licensee facing piracy may find the UK licensor slow to act.

Royalties, tax and dispute resolution

Royalty payments from India to the UK are current account transactions under FEMA and can generally be remitted through an authorised dealer bank, subject to current RBI rules and documentation. The Indian payer must withhold tax. The India-UK double tax treaty reduces the rate in many cases, with secondary sources generally citing 15% for copyright royalties, but the rate depends on the type of royalty and the treaty text, so confirm it. The UK company will need a tax residency certificate and may need to give other declarations.

GST applies to imports of services. A licence of copyright from a UK company to an Indian company is generally an import of services taxable under the reverse charge, so the Indian licensee accounts for GST and may claim credit if eligible. Stamp duty may be payable on the licence agreement, depending on the state. Treat each of these as a cost to be built into price and gross-up clauses.

Choose governing law and forum deliberately. Many UK-India agreements use English law with arbitration seated in London or Singapore. Indian courts will enforce a properly chosen arbitration clause and foreign awards under the New York Convention, and the UK is a reciprocating territory under Section 44A of the Code of Civil Procedure for court judgments. A copyright licence India UK company contract should make sure that interim relief in India remains available.

Drafting checklist, remedies and quick answers

Use this checklist for any copyright licence India UK company agreement. Identify the work and version. State whether the licence is exclusive, sole or non-exclusive. Set duration and territory explicitly and do not rely on the five-year and India defaults. State the royalty and how it is calculated, paid and audited. Cover sublicensing, modification and affiliate use. Address improvements and derivative works. Include a use-it-or-lose-it clause that is consistent with the one-year rule. Allocate enforcement rights and costs. Include confidentiality, warranties of title and indemnities for infringement claims. Add termination rights and consequences. Specify taxes and who bears them. Choose law, forum and interim relief. If a dispute arises, start with a notice under the contract, preserve evidence and consider mediation or arbitration. If the licensee breaches by sublicensing without permission, seek advice on injunctive relief and termination. If the licence lapsed under the one-year rule, discuss a fresh licence or an amendment. Review existing agreements for the Section 19 defaults, because many legacy contracts say nothing on duration or territory.

Related reading: licensing UK technology to Indian companies, IP licence from a Dubai company to its Indian subsidiary, copyright registration in India for creators, software copyright protection in India, who owns code written by Indian developers for UK startups, selling SaaS to Indian customers from the UK and enforcing a UK judgment or award in India; also licensing a UK brand to Indian franchisees; also licensing Indian music for UK content and who owns influencer content made for a brand.

Quick answers

What is the difference between exclusive and non-exclusive copyright licences in India?

An exclusive licence excludes others, and the exclusive licensee is treated as an owner for the civil remedies chapter, so it can sue infringers. A non-exclusive licensee can use the work but generally cannot sue in its own name.

What happens if an Indian copyright licence does not state the duration?

Under Section 19 as applied to licences by Section 30A, the period is deemed to be five years if it is not stated, and the territory is presumed to be India if not stated. Always state both.

Does a UK licensor need to worry about Indian withholding tax?

Yes. The Indian payer must withhold tax on royalties. The India-UK treaty may reduce the rate, but the licensor needs a tax residency certificate and should confirm the correct rate with a tax adviser.

Does an unused exclusive licence lapse in India?

Under Section 19 as applied to licences, a licence can be deemed to lapse if the rights are not exercised within one year unless the agreement says otherwise. Draft this point deliberately.

Is an exclusive licence the same as an assignment?

No. An assignment transfers ownership of some or all rights. A licence permits use while the owner keeps title, so choose according to who should control the work.

Final word

Halverton & Co. is an Indian law firm advising UK companies, founders, investors and law firms on Indian law, including copyright and technology licensing, FEMA and tax structuring and cross-border contracts for UK companies dealing with Indian counterparties. We practise in Jharkhand, Maharashtra and before the Supreme Court of India, and work alongside your UK solicitors, who advise on English law. Halverton & Co.: Where tech needs law! If you have a question about Indian law, write to us at office@halvertonandco.com, or get in touch.

This article reflects developments reported up to late October 2026. It is for general information only, is not legal advice, and does not create a solicitor-client relationship. Halverton & Co. is an Indian law firm, is not authorised or regulated by the Solicitors Regulation Authority, and does not advise on English law; UK-law points should be confirmed with UK advisers.