The myCACFO legacy archive

INTRODUCTION

On October 8, 2026, the Hon’ble Supreme Court, in Federation of Medical & Sales Representatives Association of India & Ors. v. Union of India & Ors. (W.P. (C) No. 323/2021; 2026 INSC 1097), directed the Union Government to constitute a three-member committee to examine the regulatory framework governing pharmaceutical marketing practices. The direction follows the Union Government’s proposal to establish such a committee and aims to facilitate a time-bound, consultative review of the existing framework. The proceedings concern the use of gifts, hospitality, sponsored travel and other benefits by pharmaceutical companies to influence medical practitioners. At the heart of the dispute is whether the existing regulatory framework adequately addresses the conduct of pharmaceutical companies and provides effective mechanisms for monitoring, accountability and enforcement.

THE DISPUTE: PHARMACEUTICAL FREEBIES AND REGULATORY ACCOUNTABILITY

The petition was filed in 2021 under Article 32 of the Constitution of India, invoking the right to health under Article 21. The petitioners challenged pharmaceutical marketing practices involving the provision of gifts, hospitality, sponsored travel and similar benefits to doctors. According to the petitioners, such practices can increase treatment costs, encourage irrational prescriptions and contribute to antimicrobial resistance. They sought statutory backing for the Uniform Code for Pharmaceutical Marketing Practices (UCPMP), 2015, together with mechanisms for monitoring, transparency, accountability and penalties for violations. Alternatively, they requested the Court to frame appropriate guidelines until suitable legislation was enacted.

A central grievance concerns the disparity between the obligations imposed on medical practitioners and those applicable to pharmaceutical companies. Regulation 6.8.1 of the Indian Medical Council (Professional Conduct, Etiquette and Ethics) Regulations, 2002, prohibits medical practitioners from accepting specified gifts, hospitality, travel facilities and cash grants from pharmaceutical companies. Violations may attract disciplinary action, ranging from censure to removal of the practitioner's name from the Indian Medical Register or a State Medical Register for the prescribed period. The petitioners contend that pharmaceutical companies offering such benefits are not subject to an equally enforceable regulatory regime. This alleged asymmetry in accountability forms a significant part of the challenge before the Supreme Court.

THE SUPREME COURT’S DECISION IN APEX LABORATORIES

The issue of pharmaceutical freebies has also been considered by the Supreme Court in Apex Laboratories Pvt. Ltd. v. Deputy Commissioner of Income Tax, decided on February 22, 2022. In that case, the Court held that expenditure incurred on freebies prohibited by law could not be claimed as a deduction under Section 37(1) of the Income-tax Act, 1961, in view of Explanation 1 to that provision.

However, the decision concerned the tax treatment of expenditure incurred on prohibited benefits. It did not establish a comprehensive regulatory framework governing pharmaceutical marketing practices or resolve the broader question of enforceable obligations applicable to pharmaceutical companies. The distinction is important because the present proceedings concern the adequacy of the regulatory framework itself, including the mechanisms available to prevent, monitor and penalise pharmaceutical marketing practices that fall outside the permitted standards.

THE UCPMP, 2024 AND THE QUESTION OF ENFORCEABILITY

The operative instrument governing pharmaceutical marketing practices is the UCPMP, 2024, which replaced the 2015 Code. Before the Supreme Court, the Union Government relied on the measures introduced under the 2024 Code, including enhanced disclosure and oversight requirements, self-declarations by chief executive officers, and stricter provisions concerning gifts, brand reminders, physician samples and continuing medical education.

The Union also referred to complaint-handling timelines and audit and referral mechanisms involving the Apex Committee for Pharma Marketing Practices. The petitioners, however, maintained that a code lacking statutory backing does not provide sufficiently enforceable consequences for violations by pharmaceutical companies. The dispute therefore extends beyond the existence of prescribed standards. It raises the question of whether the regulatory framework provides adequate institutional mechanisms to ensure compliance and meaningful accountability when those standards are breached.

THE HIGH-LEVEL COMMITTEE AND THE GOVERNMENT’S POSITION

The proceedings also considered the work of a High-Level Committee established in September 2022.

The petitioners contended that the committee had not produced any concrete outcome. The Solicitor General, on behalf of the Union Government, disputed this position and submitted that the committee had recommended strengthening the existing framework rather than granting statutory status to the 2015 Code at that stage. According to the Union, the recommendations contributed to the development of the UCPMP, 2024. The Government further submitted that the possibility of using existing statutory mechanisms under the Essential Commodities Act, 1955 and the Drugs and Cosmetics Act, 1940 had been examined.

Notice in the matter was issued on March 11, 2022. Subsequently, on July 28, 2026, the Supreme Court granted the Union Government a final opportunity to report on its deliberations. The Union responded by filing an affidavit proposing the constitution of a committee, and the petitioners did not object to the proposal.

THE COURT’S APPROACH: IMPLEMENTATION MATTERS AS MUCH AS PRESCRIBED NORMS

The Supreme Court observed that the material placed before it suggested that the existing regulatory framework had not proved entirely effective. The Court emphasised that the efficacy of a regulatory framework “cannot be assessed merely by the existence of prescribed norms”. Its actual implementation and enforcement must also be considered.

At the same time, the Court recognised that the choice of an appropriate regulatory framework falls within the domain of the executive and the legislature. It therefore declined to determine, at this stage, whether the UCPMP should be given statutory force or whether court-framed guidelines should be introduced. Consequently, the Court did not grant either of the principal forms of relief sought by the petitioners. Instead, exercising its jurisdiction under Articles 32 and 142 of the Constitution, it facilitated a structured consultative process to examine the existing framework and consider the appropriate way forward.

DIRECTIONS ISSUED BY THE SUPREME COURT

The Supreme Court directed the Union Government to constitute the proposed three-member committee, if it had not already been constituted, within two weeks from the date of the order. The committee is required to examine the existing regulatory framework, consider the material already placed on record and hear the petitioners, intervenors and other stakeholders.

The committee is to endeavour to submit its report within two months from the date of its first meeting. Following the expiry of that period, the Union Government must file a compliance affidavit within two weeks. The matter has been listed for further consideration on January 29, 2027, and will remain part-heard.

IMPLICATIONS FOR THE PHARMACEUTICAL INDUSTRY

The order does not itself grant statutory status to the UCPMP, 2024, nor does it introduce a new set of binding marketing restrictions. Its significance lies in directing a time-bound examination of whether the existing framework adequately addresses pharmaceutical marketing practices and provides effective enforcement mechanisms. For pharmaceutical companies, the committee’s review may bring renewed attention to compliance systems relating to gifts, hospitality, physician samples, sponsored educational activities, disclosures and internal oversight. The eventual recommendations may also influence the future structure of regulatory accountability, depending on the course adopted by the Government.

For medical practitioners, the proceedings highlight the continuing importance of professional conduct requirements and the distinction between disciplinary obligations imposed on doctors and the regulatory consequences applicable to pharmaceutical companies.

More broadly, the case places the effectiveness of pharmaceutical marketing regulation within the wider context of public health, treatment costs, prescription practices and institutional accountability.

CONCLUSION

The Supreme Court’s order in Federation of Medical & Sales Representatives Association of India & Ors. v. Union of India & Ors. marks an important procedural development in the continuing debate over pharmaceutical marketing practices in India.

Rather than deciding whether the UCPMP should receive statutory backing, the Court has directed a time-bound, consultative review of the existing regulatory framework. The emphasis on implementation and enforcement underscores that the effectiveness of regulation depends not merely on the standards prescribed but also on the mechanisms available to secure compliance.

The committee’s recommendations and the Government’s subsequent response will be important in determining whether the existing framework requires further strengthening, a different statutory approach or additional enforcement measures. The next stage of the proceedings, scheduled for January 29, 2027, will provide an opportunity for the Court to consider the progress made pursuant to its directions.

INTRODUCTION

The Securities and Exchange Board of India (SEBI) has notified the Securities and Exchange Board of India (Portfolio Managers) Regulations, 2026, vide Notification No. SEBI/LAD-DOP/2026/322 dated October 7, 2026. The new Regulations replace the SEBI (Portfolio Managers) Regulations, 2020, and will come into effect from April 1, 2027.

The revised framework follows SEBI’s consultation paper dated July 23, 2026, which proposed a comprehensive review of the existing regulatory framework in response to the significant expansion of the portfolio management services (PMS) industry. The consultation paper recorded that industry assets under management had increased from ₹18.07 lakh crore in April 2019 to ₹42.61 lakh crore as of May 31, 2026. During the same period, the number of registered portfolio managers increased from 226 in 2020 to 515 in May 2026.

Against this backdrop, the 2026 Regulations seek to broaden investment avenues, consolidate and simplify regulatory provisions, and facilitate ease of compliance. The changes also introduce a dedicated framework for portfolio management services involving mutual fund units, revise eligibility requirements for key personnel, and clarify obligations relating to registration, net worth, disclosures and client investments.

EXPANSION OF PERMISSIBLE INVESTMENT AVENUES

One of the significant changes under the 2026 Regulations is the expansion of investment avenues available to portfolio managers.

Regulation 17(1)(b) permits portfolio managers to invest, or advise clients to invest, in initial public offerings (IPOs) for equity securities, primary-market issuances of debt securities, securities listed or traded on a recognised stock exchange, money market instruments, mutual fund units and other securities specified by SEBI.

Further, Regulation 17(1)(c) permits discretionary and non-discretionary portfolio managers to invest client funds in foreign securities in the manner specified by SEBI. Investments in unlisted securities and exchange-traded derivatives are also permitted under Regulations 17(1)(d) and 17(1)(e), respectively, subject to the limits and conditions specified by SEBI.

The position differs from the framework under the 2020 Regulations, which did not permit portfolio managers to invest client funds in foreign securities. Investment in unlisted securities was generally restricted to non-discretionary and advisory services, subject to a limit of 25% of a client’s assets under management, with certain exceptions, including those applicable to large value accredited investors.

The 2026 Regulations extend the permissible investment in unlisted securities to discretionary portfolio management services as well, subject to limits and conditions to be specified by SEBI.

Notably, although the consultation paper had proposed expressly permitting investments in securities that were “to be listed”, the final Regulations instead refer to IPOs for equity securities and primary-market issuances of debt securities under Regulation 17(1)(b).

THE NEW PRIM FRAMEWORK FOR MUTUAL FUND INVESTMENTS

The introduction of the Portfolio Management Service Route for Investment in Mutual Fund Units (PRIM) is another important feature of the 2026 Regulations.

Regulation 2(1)(z) defines PRIM as an investment approach that satisfies the requirements prescribed under Chapter VI, comprising Regulations 29 to 34. Under Regulation 32, portfolio managers offering PRIM are required to invest client funds exclusively in direct plans of mutual funds in India, including index funds, exchange-traded funds and specialised investment funds.

The Regulations provide a distinct registration and operational framework for entities seeking to offer PRIM exclusively. Under Regulation 30(1), an applicant intending to provide only PRIM must apply for registration under the prescribed procedure. Existing portfolio managers may also be permitted to offer PRIM through segregated investment approaches under Regulation 30(2), subject to conditions specified by SEBI.

The framework introduces certain relaxations for PRIM-only portfolio managers. Under Regulation 31(1), such entities need to appoint a principal officer and a compliance officer, while the infrastructure requirements do not include a dealing room. Regulation 31(2) also permits the principal officer to be a graduate holding the requisite National Institute of Securities Markets (NISM) certification and possessing at least two years of experience in the securities market.

The minimum net-worth requirement for a portfolio manager exclusively offering PRIM is ₹2 crore, compared with ₹5 crore for other portfolio managers. At least 10% of the applicable minimum net-worth requirement must be deployed in unencumbered liquid assets.

Regulation 33(1) prescribes a minimum investment of ₹25 lakh per client for PRIM, compared with the general minimum investment requirement of ₹50 lakh under Regulation 16(3). Regulation 34 further empowers SEBI to impose additional conditions concerning segregation, record-keeping, fees and investment limits relating to associates of the portfolio manager.

INDEPENDENT FUND MANAGERS AND REVISED ELIGIBILITY REQUIREMENTS

The 2026 Regulations introduce a framework for Independent Fund Managers and clarify the eligibility requirements applicable to persons exercising fund-management responsibilities.

Regulation 2(1)(n) defines an Independent Fund Manager as a fund manager who manages client portfolios in affiliation with a registered portfolio manager, in accordance with the terms and conditions specified by SEBI.

Under Regulation 4(b)(iii), an employee or Independent Fund Manager exercising decision-making authority in relation to fund management must satisfy the same minimum qualification, experience and certification requirements applicable to a principal officer.

Regulation 17(2)(a)(iii), which generally restricts portfolio managers from investing client funds on the advice of another entity, provides an exception for Independent Fund Managers.

The qualification requirements for principal officers have also been relaxed. Under Regulation 4(b)(i), a graduate in any discipline may qualify, as may a holder of a Chartered Financial Analyst (CFA) charter or a Chartered Accountant (CA), Company Secretary (CS) or Cost and Management Accountant (CMA) qualification. The prescribed NISM certification and existing experience requirements continue to apply.

The Regulations also consolidate the provisions relating to eligible fund managers and co-investment portfolio managers. The relevant provisions, which were previously spread across the 2020 Regulations, are now organised under Chapter III (Regulations 9 to 11) and Chapter IV (Regulations 12 and 13).

Regulation 9(3) additionally provides for eligible fund managers acting for eligible investment funds that invest in foreign securities, with only Chapters I to III and Regulation 16(2) applying to that activity. This addresses the issue identified in the consultation paper concerning the treatment of such managers and their ability to provide services involving foreign securities.

REGISTRATION, NET WORTH AND OPERATIONAL REQUIREMENTS

The general minimum net-worth requirement for portfolio managers remains ₹5 crore under Regulation 4(a)(iv). However, the 2026 Regulations require at least 10% of the minimum net-worth requirement to be maintained in unencumbered liquid assets.

Regulation 2(1)(u) also revises the definition of net worth. The revised definition includes the securities premium account and excludes loans and advances given by the portfolio manager, including loans and advances to related parties or associates.

Existing portfolio managers are required to comply with the revised net-worth requirements within 12 months from the commencement of the Regulations.

Regulation 6(7) requires a portfolio manager to commence business within three years of registration. This entails fulfilling the conditions specified by SEBI within the prescribed period. Under Regulation 6(8), existing portfolio managers are required to comply with this requirement within 36 months from the commencement of the Regulations.

The new framework also addresses the surrender of registration. Regulation 8 introduces a procedure for surrendering a certificate of registration, while Regulation 4(a)(ii)(b) enables SEBI to exempt specified portfolio managers from the dealing-room requirement.

DISCLOSURE REQUIREMENTS AND CLIENT PROTECTION

The 2026 Regulations revise the requirements governing disclosure documents and communication of material changes to clients.

Under Regulation 15(2)(a), portfolio managers may provide the disclosure document in digital format. However, Regulation 15(2)(b) requires a physical copy to be made available free of charge upon request.

The timeline for reporting material changes has also been revised. Under Regulation 15(2)(f), material changes must be filed with SEBI through an addendum within 15 calendar days. This replaces the earlier timeline of seven working days. Regulation 15(2)(i) similarly requires such changes to be disclosed to clients within 15 calendar days.

Regulation 16(2) provides that portfolio managers cannot carry out investment-management operations or execute portfolio-management transactions outside India, except for trades involving investments in foreign securities.

The Regulations also address the transition of existing client investments. Under Regulation 16(5), clients whose investments predate the 2020 Regulations must meet the minimum investment requirement of ₹50 lakh within 12 months from the commencement of the 2026 Regulations.

Further, investments made before the 2020 Regulations must comply with the applicable prudential limits, restrictions on unrated securities of related parties or associates, and credit-rating requirements within 36 months from commencement, as provided under Regulation 17(1)(l).

CONCLUSION

The SEBI (Portfolio Managers) Regulations, 2026 represent a comprehensive revision of the regulatory framework governing portfolio management services in India. By expanding permissible investment avenues, introducing the PRIM framework, recognising Independent Fund Managers and revising eligibility requirements, the Regulations seek to accommodate the changing structure of the PMS industry.

At the same time, the revised net-worth requirements, liquid-asset obligations, disclosure timelines and transitional compliance requirements reinforce the importance of operational discipline and investor protection.

With the new framework scheduled to come into effect on April 1, 2027, portfolio managers will need to assess their existing investment strategies, registration conditions, organisational structures and client documentation to identify the changes required for compliance. The extent to which the expanded investment avenues and PRIM framework translate into greater flexibility for portfolio managers will also depend on the limits and conditions specified by SEBI under the new Regulations.

INTRODUCTION

The Ministry of Corporate Affairs (MCA), through an advisory issued on September 24, 2026, has cautioned the public against making financial decisions involving Nidhi companies without undertaking adequate background verification. The advisory assumes particular significance in view of instances where entities operating as Nidhis have offered unusually high returns while not complying with the statutory requirements governing Nidhi companies.

The advisory follows the Ministry’s examination of applications filed in Form NDH-4. The examination brought to light instances of non-compliance with the Companies Act, 2013 and the Nidhi Rules, 2014, including cases where companies functioning as Nidhis had failed to file Form NDH-4 within the prescribed period.

The MCA has accordingly emphasised that incorporation of a company or the use of the term “Nidhi” should not, by itself, be treated as confirmation that the entity enjoys valid Nidhi status. Persons proposing to deposit money with or otherwise enter into a financial arrangement with such an entity should independently verify its regulatory status before proceeding.

UNDERSTANDING THE NIDHI COMPANY FRAMEWORK

Nidhi companies are mutual-benefit companies governed principally by Section 406 of the Companies Act, 2013 and the Nidhi Rules, 2014. Their principal business is centred on accepting deposits from and lending money to their members, thereby facilitating mutual financial assistance among members.

The regulatory framework governing Nidhi companies has evolved over time. Under Section 620A of the Companies Act, 1956, the Central Government had the power to declare a company as a Nidhi. The Companies Act, 2013 initially did not retain a similar declaration mechanism. However, the requirement was subsequently reintroduced with effect from August 15, 2019.

Rule 3A of the Nidhi Rules, 2014, introduced through the 2019 amendment, provides for an application in Form NDH-4. Upon consideration of the application and satisfaction that the prescribed requirements have been fulfilled, the Central Government may notify the company as a Nidhi in the Official Gazette.

FORM NDH-4 AND REQUIREMENTS FOR NIDHI STATUS

The regulatory framework was further strengthened through the Nidhi (Amendment) Rules, 2022, which introduced a more detailed procedure for companies seeking Nidhi status. Under Rule 3B, a public company seeking to be declared as a Nidhi is required to apply in Form NDH-4 within 120 days from the date of its incorporation, subject to fulfilment of the prescribed conditions. Among the important requirements are the existence of at least 200 members and Net Owned Funds of ₹20 lakh or more.

The application is also required to contain prescribed declarations relating to the promoters and directors, including the applicable fit-and-proper requirements. Accordingly, the mere incorporation of a company as a public company or its representation as a Nidhi does not by itself establish that the company has obtained the necessary statutory recognition.

CONSEQUENCES OF NON-COMPLIANCE

Failure to obtain or maintain the requisite Nidhi status can have significant legal consequences.

Under Rule 3A of the Nidhi Rules, a company that has failed to comply with the applicable requirements, or whose application in Form NDH-4 has been rejected, cannot raise deposits from or provide loans to its members under the Nidhi framework. Where such a company subsequently raises deposits, those deposits are treated as having been raised under Chapter V of the Companies Act, 2013, which governs acceptance of deposits. Consequently, the company becomes subject to the statutory requirements and restrictions applicable to acceptance of deposits under the Companies Act.

The consequences of contravention can extend beyond regulatory non-compliance. Section 76A of the Companies Act provides for stringent penalties in cases involving contravention of the provisions relating to acceptance of deposits. For the company, the penalty may include a fine of not less than ₹1 crore or twice the amount of the deposit accepted, whichever is lower, subject to a maximum of ₹10 crore. Officers in default may face imprisonment for a term which may extend to seven years and a fine ranging from ₹25 lakh to ₹2 crore. Where the contravention is committed knowingly or wilfully with an intention to deceive, the provisions relating to fraud under Section 447 of the Companies Act may also become relevant.

RESTRICTIONS APPLICABLE EVEN TO DECLARED NIDHIS

Obtaining Nidhi status does not provide an unrestricted licence to accept deposits or undertake lending activities. A declared Nidhi continues to operate within the restrictions prescribed under the Nidhi Rules, 2014. For instance, Rule 11 places a limit on the deposits that may be accepted by a Nidhi in relation to its Net Owned Funds. The prescribed framework permits deposits up to twenty times the Net Owned Funds, subject to the applicable conditions.

Similarly, Rule 6(f) restricts a Nidhi from accepting deposits from or lending to persons other than its members. The mutual-benefit character of a Nidhi therefore remains central to its permitted operations. The naming requirements have also been strengthened. Following the 2024 amendment, a company cannot use the words “Nidhi Limited” in its name unless it has been declared as a Nidhi under Section 406(1) of the Companies Act.

WHY VERIFICATION OF NIDHI STATUS IS IMPORTANT

The MCA’s advisory highlights an important distinction between the existence of a company and its regulatory status. A company may be incorporated with a name or business model suggesting that it operates as a Nidhi. However, the relevant question for a prospective depositor or member is whether the company has actually complied with the statutory requirements and obtained the necessary recognition.

The Ministry has stated that 395 companies have been declared as Nidhis under the Companies Act, 1956 or the Companies Act, 2013. A list published on the MCA portal on November 3, 2025 records the status of these companies. Of these, 298 were stated to be active, while 55 had been converted, dissolved or struck off and 42 were under liquidation or strike-off proceedings. Accordingly, prospective members and depositors should not rely solely on representations made by a company or its representatives. The company’s current status should be independently checked through the available MCA records before entering into a financial arrangement.

CAUTION AGAINST UNUSUALLY HIGH RETURNS

The MCA has also cautioned members of the public against relying upon informal assurances or promises of unusually high returns.

The promise of high returns, by itself, does not establish that an entity is operating unlawfully. However, where such representations are made by an entity claiming to operate as a Nidhi, prospective depositors should undertake appropriate verification of the company’s statutory status and compliance before depositing funds. An additional consideration is that deposits with Nidhi companies are not insured by the Deposit Insurance and Credit Guarantee Corporation (DICGC). Therefore, in the event of default or fraud, depositors may face uncertainty and delays in recovering their money, and recovery may not necessarily be complete.

PRACTICAL DUE DILIGENCE FOR PROSPECTIVE DEPOSITORS

The MCA advisory therefore underscores the importance of basic regulatory due diligence before dealing with a Nidhi company. A prospective depositor or member should, at a minimum, verify the company’s current status, whether it has been duly declared as a Nidhi, and whether its name and activities comply with the applicable statutory framework. The verification becomes particularly important where the company is offering returns that appear substantially higher than ordinarily expected or is making representations that depend upon its alleged Nidhi status.

CONCLUSION

The MCA’s September 24, 2026 advisory reinforces that Nidhi status is a regulated legal status and cannot be presumed merely from a company’s incorporation, name or business representation. The Nidhi framework under Section 406 of the Companies Act, 2013 and the Nidhi Rules, 2014 imposes specific requirements relating to recognition, membership, deposits, lending and corporate compliance. Non-compliance can expose the company and its officers to significant statutory consequences.  For members and prospective depositors, the central takeaway is the importance of independent verification. Before committing funds to an entity claiming to operate as a Nidhi, its regulatory status and current position should be verified through official MCA records rather than relying solely upon representations concerning the company or promises of high returns.

India’s new framework governing the export and import of goods and services under the Foreign Exchange Management Act, 1999 (FEMA) has been amended by the Reserve Bank of India (RBI) ahead of its implementation from October 1, 2026. Through the Foreign Exchange Management (Export and Import of Goods and Services) (Amendment) Regulations, 2026, notified on September 22, 2026, the RBI has revised the timelines for realisation of export proceeds, provided for the continuation of existing caution-listing status and expanded the transitional role of Authorised Dealer Banks (AD Banks).

BACKGROUND

Following a comprehensive review of the regulatory framework governing the export and import of goods and services under FEMA, and after consultation with stakeholders, the RBI issued the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026 (EXIM Regulations) on January 13, 2026, along with the Directions on Export and Import of Goods and Services (EXIM Directions) on January 16, 2026. The new framework supersedes the Foreign Exchange Management (Export of Goods and Services) Regulations, 2015, the Master Direction – Export of Goods and Services, the Master Direction – Import of Goods and Services and the 167 circulars listed in the Annex to the EXIM Directions. The new framework is primarily principle-based and seeks to promote ease of doing business, particularly for small exporters and importers, while providing greater operational flexibility to AD Banks. It consolidates various instructions previously issued separately in relation to export and import transactions. The EXIM Regulations and the September 2026 amendments come into effect from October 1, 2026. Accordingly, the erstwhile 2015 framework continues to govern the relevant transactions until September 30, 2026.

KEY AMENDMENTS

1.     SHORTENED TIMELINES FOR REALISATION OF EXPORT PROCEEDS

The Amendment Regulations revise the period within which export proceeds are required to be realised and repatriated to India.

Goods and Services

Under Regulation 5(1)(a), the realisation period has been reduced from fifteen months to nine months. In the case of goods, the period is calculated from the date of shipment, while in the case of services, it is calculated from the date of invoice.

Exports of Goods to a Warehouse Outside India

Under Regulation 5(1)(b), the realisation period for goods exported to a warehouse outside India has also been reduced to nine months, calculated from the date of sale of the goods from the warehouse. Under the erstwhile 2015 framework, the general realisation period was nine months, whereas exports to warehouses outside India were subject to a fifteen-month period. The January 2026 EXIM Regulations had prescribed a fifteen-month period for both categories. The September 2026 amendment now brings the warehouse export period back to nine months.

Project Exports

The amendment does not alter the position applicable to project exports. Realisation of export proceeds will continue to be governed by the payment terms specified in the underlying contract.

Exports Invoiced or Settled in Indian Rupees

The period for realisation of export proceeds in respect of exports invoiced or settled in Indian Rupees has been reduced from eighteen months to twelve months under the first proviso to Regulation 5(1).

Extension by Authorised Dealer Banks

The prescribed periods operate as regulatory timelines, subject to the flexibility provided under the Regulations. On an exporter’s request, an AD Bank may extend the period where it is satisfied with the reasons for the delay. AD Banks are also required to maintain appropriate systems for monitoring and following up on the realisation of export proceeds. Where export proceeds remain unrealised for more than one year after the due date or any extension approved by the AD Bank, further exports may be undertaken only against full advance payment or an irrevocable Letter of Credit.

2.     CONTINUATION OF EXISTING CAUTION-LISTING STATUS

The Amendment Regulations introduce a new proviso to Regulation 13 dealing with unrealised export proceeds. Under the new proviso, exporters who are on the RBI’s Caution List as on September 30, 2026, pursuant to Regulation 16 of the Foreign Exchange Management (Export of Goods and Services) Regulations, 2015, will continue to be governed by the existing caution-listing order until they are removed from the list. This provision ensures continuity notwithstanding the repeal and supersession of the 2015 Regulations from October 1, 2026.

Caution listing carries separate procedural consequences under the existing export framework, including conditions governing the acceptance of shipping documents from caution-listed exporters. These consequences are distinct from the restriction under Regulation 13 applicable where export proceeds remain unrealised beyond the prescribed period or any extension granted by an AD Bank. The amendment therefore preserves existing caution-listing orders rather than allowing them to lapse merely because the underlying 2015 Regulations have been superseded.

3.     TRANSITIONAL POWERS OF AUTHORISED DEALER BANKS

A new Regulation 20 has been introduced to address transactions undertaken before October 1, 2026.

The provision empowers AD Banks to handle transactions relating to the export and import of goods and services, as well as merchanting trade, undertaken before October 1, 2026, which would otherwise have required approval of the RBI under the erstwhile 2015 Regulations and the corresponding Master Directions. The provision addresses a potential transitional gap between the old and new regulatory frameworks by enabling AD Banks to deal with specified pre-October 1 transactions without requiring the matter to be separately referred to the RBI for approval. Regulation 20 operates alongside Regulation 19(1), which requires every AD Bank to establish a separate, comprehensive and well-documented internal policy and Standard Operating Procedure (SOP) for handling transactions, including reporting requirements, relating to exports, imports and merchanting trade.

WHAT THE AMENDMENTS CHANGE

The September 2026 amendments make several important changes to the implementation of the new EXIM framework:

• The general realisation period for export proceeds has been reduced to nine months.

• The nine-month period also applies to goods exported to warehouses outside India.

• The realisation period for exports invoiced or settled in Indian Rupees has been reduced from eighteen months to twelve months.

• Exporters on the RBI’s Caution List as of September 30, 2026 will continue to be governed by their existing caution-listing orders until they are removed from the list.

• AD Banks have been empowered to handle specified pre-October 1 transactions that would otherwise have required RBI approval under the erstwhile framework.

ENHANCED ROLE OF AUTHORISED DEALER BANKS

Beyond these specific amendments, the broader shift under the new EXIM framework is the expanded role of AD Banks in the administration of foreign exchange transactions relating to exports, imports and merchanting trade. Regulation 19 requires each AD Bank to formulate an internal policy and SOP governing the handling and reporting of such transactions. Regulation 20 further allows AD Banks to deal with specified transactions undertaken before October 1, 2026 that would otherwise have required approval from the RBI. The framework therefore places greater operational responsibility on AD Banks. Their internal policies, systems and procedures will play an important role in determining how the new regulatory framework is implemented in practice.

IMPLICATIONS FOR EXPORTERS AND IMPORTERS

The revised realisation timelines require exporters to closely monitor outstanding export proceeds and ensure that their internal tracking systems are aligned with the new nine-month period.

Exporters with transactions spanning the transition between the 2015 framework and the 2026 framework should also identify outstanding matters that may require action from their AD Banks, particularly where RBI approval was previously contemplated or required. Entities presently subject to caution-listing should also take note of the specific transitional protection provided under Regulation 13 and ensure continued compliance with the conditions applicable to their caution-listing status. For importers and entities engaged in merchanting trade, the increased role of AD Banks and the internal SOP requirements under Regulation 19 are also relevant, particularly for transactions initiated under the erstwhile regulatory framework but remaining outstanding after October 1, 2026.

CONCLUSION

The September 2026 amendments provide important clarifications ahead of the implementation of India’s new EXIM framework from October 1, 2026. The reduction in realisation timelines, continuation of existing caution-listing orders and transitional powers granted to AD Banks address important operational aspects of the transition from the erstwhile 2015 framework to the new principle-based regime. For exporters and importers, the transition will require particular attention to revised realisation timelines, outstanding transactions under the existing framework and the internal procedures prescribed by their respective AD Banks. The expanded role of AD Banks is likely to remain a central feature of the practical implementation of the new EXIM framework.

The Ministry of Finance has notified the Foreign Exchange Management (Non-debt Instruments) (Fourth Amendment) Rules, 2026 (S.O. 4870(E)) (“Amendment Rules”), with effect from September 3, 2026. The Amendment Rules introduce a specific permission for foreign direct investment (FDI) in the inventory-based model of e-commerce, exclusively for the export of goods or products manufactured or produced in India.

The amendment inserts a new serial number 15.2.5 in the Table in Schedule I of the Foreign Exchange Management (Non-debt Instruments) Rules, 2019 (“NDI Rules”), which sets out the permitted sectors, entry routes and sectoral caps for foreign investment. The Amendment Rules are framed under the Foreign Exchange Management Act, 1999 (“FEMA”).

The amendment gives effect to the policy change announced by the Department for Promotion of Industry and Internal Trade (DPIIT) through Press Note No. 3 (2026 Series). While the Press Note had stated that the change would take effect from the date of the FEMA notification, the investment permission is now legally operative following the notification of the Amendment Rules.

Background

FDI in the inventory-based model of e-commerce has historically been prohibited under India's FDI framework. While the marketplace model, under which an e-commerce platform acts as a facilitator between independent buyers and sellers, permits up to 100% FDI under the automatic route, the inventory-based model has remained restricted.

Under the inventory-based model, the e-commerce entity owns the goods and sells them directly to consumers. The new framework creates a limited exception to this restriction by permitting foreign-invested e-commerce entities to undertake inventory-based e-commerce exclusively for the export of goods or products manufactured or produced in India.

The export-focused relaxation has been developed through a series of regulatory measures.

1. DPIIT Press Note No. 3 (2026 Series)

On July 23, 2026, DPIIT amended the Consolidated FDI Policy by inserting Para 5.2.15.2.5. The new provision permits e-commerce entities having FDI to engage in the inventory-based model exclusively for the export of goods or products manufactured and/or produced in India.

Significantly, the Press Note specified that the amendment would “take effect from the date of FEMA notification”.

2. DGFT Framework for Inventory-Based Cross-Border E-Commerce

On August 5, 2026, the Directorate General of Foreign Trade (DGFT) introduced the “Inventory-based Cross-border E-Commerce Facilitation Framework” through amendments to the Foreign Trade Policy 2023 and the Handbook of Procedures.

The framework, introduced through Section D comprising Paras 9.13 to 9.19 of the Foreign Trade Policy 2023, establishes the Exporter-on-Record (EOR) and Seller-on-Record (SOR) architecture and prescribes requirements relating to eligibility, transfer of title, payment timelines, seller protections and reverse logistics.

The framework therefore provides the operational structure for inventory-based cross-border e-commerce, while the subsequent FEMA amendment provides the corresponding foreign investment permission.

3. NDI Amendment Rules, 2026

The Ministry of Finance has now inserted serial number 15.2.5 into Schedule I of the NDI Rules.

The new provision states that:

“An e-commerce entity is permitted to engage in inventory-based model of e-commerce exclusively for the export of goods or products manufactured or produced in India in accordance with the provisions of the Foreign Trade Policy 2023 read with the Handbook of Procedures (HBP) and the Foreign Exchange Management (Export of Goods & Services) Regulations, 2015.”

It further provides that the restrictions relating to B2C transactions and the inventory-based model of e-commerce under serial numbers 15.2.1 to 15.2.4 will not apply to the export of goods or products through e-commerce undertaken in accordance with the new provision.

Accordingly, the amendment does two things: first, it creates an affirmative permission for inventory-based e-commerce for exports; and second, it disapplies the existing restrictions applicable to the inventory-based model and B2C transactions where the activity falls within the export framework.

What the Amendment Means

The amendment marks a targeted relaxation of India's FDI regime rather than a broader opening of inventory-based e-commerce.

Foreign-invested e-commerce entities can now undertake inventory-based e-commerce for the export of goods or products manufactured or produced in India, subject to compliance with the Foreign Trade Policy, Handbook of Procedures and applicable foreign exchange regulations.

The relaxation does not extend to domestic B2C commerce. The existing restrictions under serial numbers 15.2.1 to 15.2.4 continue to apply to domestic inventory-based e-commerce activities.

The regulatory framework therefore creates a distinction between domestic inventory-based commerce, which remains restricted, and export-oriented inventory-based commerce, which is now permitted subject to the prescribed conditions.

For e-commerce platforms with foreign investment, the framework may facilitate structures involving dedicated Exporter-on-Record entities that can hold Indian-manufactured inventory and manage international fulfilment.

For Indian manufacturers and MSMEs, the framework may also provide an additional route to access international markets through established e-commerce platforms.

Regulatory Framework Now in Place

The regulatory framework has effectively developed across three levels:

• DPIIT: Provides the underlying FDI policy permission through Press Note No. 3 (2026 Series).
• DGFT: Provides the operational framework governing inventory-based cross-border e-commerce, including the EOR/SOR structure and related export requirements.
• Ministry of Finance/RBI: The FEMA framework now permits the corresponding foreign investment through the amendment to the NDI Rules.

The FEMA notification is therefore significant because the permission contemplated under the DPIIT Press Note has now become legally operative.

What Remains Restricted?

The amendment should not be interpreted as permitting foreign investment in inventory-based e-commerce generally.

The relaxation is expressly limited to the export of goods or products manufactured or produced in India. The existing restrictions applicable to domestic B2C inventory-based e-commerce continue to remain in force.

Accordingly, foreign-invested e-commerce entities seeking to rely on the new framework will need to ensure that their operations fall squarely within the export-oriented model and comply with the applicable FEMA and DGFT requirements.

Looking Ahead

The notification of the Amendment Rules completes an important part of the regulatory framework for inventory-based cross-border e-commerce. What was previously a policy proposal contingent upon a FEMA notification is now an operative foreign investment framework.

The next area of significance will be the implementation of the framework by market participants and the corresponding alignment of RBI's operational guidance with the amended NDI Rules. E-commerce platforms, foreign investors and Indian manufacturers seeking to utilise the new route will need to assess their proposed structures against the FDI Policy, NDI Rules, Foreign Trade Policy, Handbook of Procedures and applicable foreign exchange regulations.

The amendment represents a targeted export-oriented relaxation of India's FDI regime, while preserving the existing restrictions on domestic inventory-based B2C e-commerce.

The Ministry of Corporate Affairs (MCA) has extended the Companies Compliance Facilitation Scheme, 2026 (CCFS-2026) by a further 15 days, with the revised deadline now set at September 15, 2026. The extension has been announced through General Circular No. 04/2026 dated August 31, 2026, following representations from stakeholders seeking additional time to complete pending statutory filings.

Background

CCFS-2026 was introduced through General Circular No. 01/2026 dated February 24, 2026, as a one-time compliance window from April 15 to July 15, 2026. The Scheme enables companies to complete delayed statutory filings by paying the prescribed filing fees along with only 10% of the additional fees otherwise applicable.

The Scheme was subsequently extended up to August 31, 2026 through General Circular No. 03/2026 dated July 8, 2026, following disruptions caused by a fire incident at the MCA’s data centre on June 5, 2026.

As the August 31 deadline approached, stakeholders sought a further extension, citing pending tax and audit compliances, difficulties faced by SMEs and inactive companies in regularising long-standing defaults, technical issues on the MCA-21 V3 portal and the concentration of income-tax, GST and tax audit deadlines during August and September.

What Remains Unchanged

The MCA has clarified that all other terms and conditions of CCFS-2026 remain unchanged.

The Scheme continues to cover eligible e-forms under the Companies Act, 2013, including:

• MGT-7 and MGT-7A;
• AOC-4;
• AOC-4 CFS;
• AOC-4 NBFC (Ind AS);
• AOC-4 CFS NBFC (Ind AS);
• AOC-4 (XBRL);
• ADT-1;
• FC-3; and
• FC-4.

Certain forms under the erstwhile Companies Act, 1956 also continue to be covered.

The reduced fees available to companies seeking dormant status through Form MSC-1 or closure through Form STK-2 also remain available under the Scheme.

Immunity from Penalty

An important benefit of CCFS-2026 is the continued availability of immunity from penalty.

No penalty will be levied on a defaulting company where its annual returns and financial statements are filed under the Scheme before, or within 30 days of, the issuance of notice by the adjudicating officer.

Companies with pending annual filings should therefore consider the extended window not merely as a fee-relief measure but also as an opportunity to regularise outstanding statutory compliances within the Scheme's framework.

Companies Excluded from the Scheme

The extension does not alter the categories of companies excluded from CCFS-2026.

The Scheme continues to exclude:

• companies against which a final notice for striking off under Section 248 of the Companies Act, 2013 has already been initiated by the Registrar;
• companies that have already applied for striking off;
• companies that applied for dormant status before commencement of the Scheme;
• companies that have been dissolved pursuant to a scheme of amalgamation under the Companies Act, 2013; and
• vanishing companies.

Accordingly, the extension does not reopen the Scheme for entities falling within these excluded categories.

What Companies Should Do

The extension provides companies with a further, but limited, opportunity to regularise pending statutory filings at substantially reduced additional fees.

Companies having outstanding filings should use the extended window to:

1. identify all pending statutory filings;
2. verify the applicability of CCFS-2026 to the relevant forms;
3. complete the necessary financial statement and annual return compliances;
4. address any technical or filing-related issues on the MCA-21 V3 portal; and
5. complete the filings before September 15, 2026.

Once the Scheme concludes, companies that continue to remain in default may face the consequences and enforcement action contemplated under the Companies Act, 2013.

The September 15, 2026 deadline should therefore be treated as the final compliance window available under the present extension, rather than an indication that further relief will necessarily be granted.

The Supreme Court’s nine-judge Constitution Bench in State of U.P. v. Jai Bir Singh (2026 INSC 897; Civil Appeal No. 897/2002) has revisited the scope of the term “industry” under the erstwhile Industrial Disputes Act, 1947 (ID Act). By a narrow 5:4 majority, the Court declined to disturb the broad interpretation laid down in Bangalore Water Supply & Sewerage Board v. A. Rajappa [(1978) 2 SCC 213]. The judgment, however, does not lay down a new authoritative definition of “industry”. Instead, it clarifies the continued application of the 1978 framework to disputes governed by the ID Act, while leaving the interpretation of “industry” under the Industrial Relations Code, 2020 (IRC) to future judicial consideration. Importantly, the Court has not completely overruled Bangalore Water Supply. The interpretation laid down in that judgment continues to govern pending disputes arising under the erstwhile ID Act.

Definition of “Industry”

Section 2(j) of the ID Act defined “industry” broadly to include business, trade, undertakings, manufacture, calling, service, employment and industrial occupations of employers and workmen. The definition under Section 2(p) of the Industrial Relations Code, 2020 is more detailed. It expressly covers systematic activity carried on through employer-worker cooperation for the production, supply or distribution of goods or services, while also prescribing specific exclusions, including certain charitable, social and philanthropic institutions.

The Broad Interpretation in Bangalore Water Supply

In Bangalore Water Supply, a seven-judge Bench adopted a broad interpretation of “industry” through what came to be known as the “triple test”.

An activity could qualify as an industry where it involved:

• systematic and organised activity;
• cooperation between employer and employee; and
• production or distribution of goods or provision of services to satisfy human wants.

The Court further held that the absence of a profit motive was not decisive. Consequently, activities undertaken by educational institutions, hospitals, charitable organisations and certain governmental or welfare bodies could fall within the definition of “industry”, provided that the applicable tests were satisfied.

The Court also laid down the “dominant nature test” for organisations carrying out multiple activities. Where an undertaking performs several functions, the predominant nature of its services and the integrated character of its departments are relevant in determining whether the undertaking constitutes an “industry”. The present judgment retains this aspect of the framework.

Why Was the 1978 Interpretation Reconsidered?

The present appeals arose in the context of a dispute concerning whether the Social Forestry Department, established as a welfare-oriented initiative for environmental improvement, could be regarded as an “industry” under Section 2(j) of the ID Act.

The issue had remained before the Supreme Court for several years. In Chief Conservator of Forests v. Jagannath Maruti Kondhare [(1996) 2 SCC 293], the Supreme Court held that the Social Forestry Department could fall within the definition of “industry”.

Subsequently, in State of Gujarat v. Pratamsingh Narsinh Parmar [(2001) 9 SCC 713], a two-judge Bench held that Social Forestry was a welfare scheme undertaken by the State for environmental improvement rather than an “industry”. The apparent divergence between the two decisions ultimately resulted in the reference to the nine-judge Bench.

The present Bench clarified that the two decisions were not in actual conflict. According to the Court, Pratamsingh Parmar did not reject the principle applied in Jagannath Maruti Kondhare, but proceeded on the basis that sufficient factual material was not available in that case.

Parliament had also attempted to narrow the definition of “industry” through the Industrial Disputes (Amendment) Act, 1982. However, the amendment was never brought into force.

The issue subsequently came before a larger Bench in 2005 for consideration of whether the broad interpretation adopted in Bangalore Water Supply required reconsideration.

The question acquired renewed significance following the repeal of the ID Act and its replacement by the Industrial Relations Code, 2020, which came into force on November 21, 2025. Since the present appeals arose from proceedings governed by the earlier statutory framework, they continued to be considered under the ID Act.

What Did the Nine-Judge Bench Hold?

The nine-judge Bench did not completely overrule Bangalore Water Supply.

The CJI-led opinion, supported by Justices Satish Chandra Sharma, Alok Aradhe and Vipul M. Pancholi, proposed a refinement of the Bangalore Water Supply test. It observed that the goods or services involved should possess a “discernible commercial character that is analogous to trade or business”.

At the same time, the opinion clarified that an activity need not be profit-making to qualify as an industry. The absence of a profit motive, by itself, would therefore not be determinative. The nature and character of the activity remain central to the inquiry.

In contrast, Justices B.V. Nagarathna, Dipankar Datta, Ujjal Bhuyan and Joymalya Bagchi affirmed the correctness of Bangalore Water Supply. Justice P.S. Narasimha also declined to disturb the 1978 interpretation, particularly noting that the ID Act had already been repealed.

A significant aspect of the judgment is the Court’s clarification that the meaning of “industry” under Section 2(p) of the Industrial Relations Code, 2020 must be examined independently. The interpretation of the repealed Section 2(j) of the ID Act cannot simply be carried forward as the definitive interpretation of the new statutory provision.

Key Takeaways

1. Bangalore Water Supply Continues to Govern ID Act Disputes

The Supreme Court has not completely overruled Bangalore Water Supply. Its interpretation continues to apply to disputes governed by the erstwhile ID Act.

However, the judgment makes clear that Bangalore Water Supply cannot be treated as the sole basis for determining the meaning of “industry” under the new Industrial Relations Code, 2020.

2. Commercial Character

The CJI-led opinion proposed that the production, distribution or provision of goods or services should possess a “discernible commercial character that is analogous to trade or business”.

At the same time, the absence of a profit motive does not, by itself, exclude an activity from the scope of “industry”.

3. Dominant Nature Test Retained

The judgment retains the dominant nature test for composite undertakings.

Where an organisation carries out several different activities, the predominant nature of its services and the integrated character of its departments remain relevant in determining whether the undertaking qualifies as an “industry”.

4. Sovereign Functions

The Court also considered the exclusion of core sovereign functions and the distinction between sovereign functions and activities having an economic or commercial character.

The mere fact that an activity is performed by the State is not, by itself, sufficient to determine whether the activity constitutes an “industry”.

5. Charitable and Welfare Activities

The Court examined the treatment of charitable and welfare-oriented activities under the existing legal framework.

The fact that an activity is characterised as charitable or welfare-oriented does not, by itself, determine whether it falls within the definition of “industry”. The nature and character of the activity remain relevant to the determination.

Conclusion

The nine-judge Constitution Bench judgment in State of U.P. v. Jai Bir Singh marks an important development in the interpretation of “industry” under Indian labour law.

While the Court has declined to completely displace the broad approach adopted in Bangalore Water Supply, it has also made an important distinction between the interpretation applicable under the repealed Industrial Disputes Act, 1947 and the statutory framework introduced by the Industrial Relations Code, 2020.

Accordingly, the 1978 “triple test” continues to have relevance for pending disputes under the ID Act, but the scope of Section 2(p) of the Industrial Relations Code will have to be determined independently. The judgment therefore leaves significant questions concerning the application of the new definition open for future litigation and judicial clarification.

The Ministry of Corporate Affairs (MCA) has notified the Companies (Indian Accounting Standards) Amendment Rules, 2026, further amending the Companies (Indian Accounting Standards) Rules, 2015. The amendments align several Indian Accounting Standards (Ind AS) with recent international accounting developments, including the Annual Improvements to Ind AS (2024), amendments concerning the classification and measurement of financial instruments, and new accounting requirements for contracts referencing nature-dependent electricity.The amendments come into force from the date of their publication in the Official Gazette and are generally applicable to annual reporting periods beginning on or after April 1, 2026.

Background: Why These Amendments Were Introduced

The amendments address several emerging accounting issues arising from developments in financing practices, digital payment systems and renewable energy transactions. Three developments are particularly significant.

1.      Sustainability-Linked and ESG-Linked Financing

Sustainability-linked and ESG-linked loans and other financial instruments have become increasingly common, with interest rates or other contractual terms linked to environmental, social or other performance targets. A key accounting issue has been whether such contingent features affect the classification of a financial asset under Ind AS 109. In particular, entities have had to assess whether the contractual cash flows continue to satisfy the “solely payments of principal and interest” (SPPI) test. The amendments clarify that a financial instrument containing contingent features linked to ESG or other non-financial targets does not automatically fail the SPPI test. Where the contractual cash flows, both before and after the occurrence of the contingent event, remain consistent with a basic lending arrangement, the instrument may continue to qualify for the relevant classification. The amendments also introduce enhanced disclosure requirements in relation to such financial instruments.

2.      Accounting for Electronic Payment Settlements

The amendments address the practical issue of determining when a financial liability should be derecognised where payment is made through an electronic payment system. There may be a time gap between the initiation of an electronic payment and the actual settlement of funds. The amendments clarify that, as a general principle, a liability is derecognised when it is settled. However, a practical expedient has been introduced under which an entity may deem a financial liability to be settled before the formal settlement date, provided specified conditions are satisfied. These conditions include the payment being irrevocable, the entity no longer having access to the cash, and settlement risk being insignificant. This clarification is particularly relevant to entities making significant payments through electronic banking systems.

3.      Nature-Dependent Electricity Contracts

The amendments also address accounting for contracts relating to the purchase of nature-dependent electricity, including electricity generated from renewable sources such as wind and solar power. Renewable energy contracts may involve situations where the quantity of electricity generated varies depending on weather conditions. As a result, an entity may occasionally receive more electricity than it can consume and sell the surplus back to the market. The amendments introduce a “net purchaser” test to determine whether such contracts can continue to qualify for the “own use” exemption under Ind AS 109. Under the revised framework, an entity may continue to apply the own-use treatment where it is, overall, a net purchaser of electricity during the relevant contractual period, even where surplus electricity is occasionally sold. This is intended to provide greater certainty for entities entering into long-term renewable energy arrangements and reduce unintended accounting volatility.

Key Amendments to Ind AS

Renewable Energy and Power Purchase Agreements

Entities entering into contracts for nature-dependent electricity, including wind and solar power purchase agreements (PPAs), will need to reassess the accounting treatment of such arrangements under Ind AS 109.

New paragraphs B2.7–B2.8 introduce the net purchaser assessment for determining whether such contracts qualify for the own-use exemption.

Additional disclosure requirements have also been introduced under Ind AS 107, including paragraphs 30A–30C.

Sustainability-Linked Financial Instruments

The amendments to Ind AS 109 clarify the treatment of financial assets containing contingent features linked to ESG metrics or other non-financial variables.

New paragraphs B4.1.8A and B4.1.10A clarify that such features do not automatically cause a financial asset to fail the SPPI test, provided the contractual cash flows remain consistent with a basic lending arrangement.

Entities will also be required to provide additional disclosures under paragraphs 20B–20D of Ind AS 107.

Enhanced Disclosures for FVOCI Equity Investments

Additional disclosures are prescribed for each class of equity investments designated at fair value through other comprehensive income (FVOCI).

The disclosures include disaggregated information concerning fair value gains or losses relating to investments that have been derecognised as well as those that remain recognised. Entities are also required to disclose transfers within equity upon derecognition.

These requirements are introduced through amended paragraphs 11A and 11B of Ind AS 107.

Electronic Payment Settlement

New paragraphs B3.3.8–B3.3.10 introduce a practical expedient for financial liabilities settled through electronic payment systems.

An entity may treat a liability as settled before the formal settlement date where the prescribed conditions concerning irrevocability of payment, lack of access to cash and insignificant settlement risk are satisfied.

The amendment is intended to address differences in accounting practices arising from the timing gap between initiation and settlement of electronic payments.

Hedge Accounting for Nature-Dependent Electricity

The amendments also introduce a new Section 6.10 dealing with hedge accounting for contracts referencing nature-dependent electricity.

The new provisions permit an entity to designate a variable nominal amount of forecast electricity transactions as the hedged item where the hedging instrument references nature-dependent electricity.

Existing hedging relationships may also be discontinued and redesignated where the revised requirements permit such treatment.

Transition Requirements

The amendments generally require retrospective application in accordance with Ind AS 8. The relevant transition provisions are contained in paragraphs 7.2.47–7.2.49 for classification and measurement amendments and paragraphs 7.2.51–7.2.53 for nature-dependent electricity contracts. Restatement of prior periods is permitted but is not mandatory in all circumstances and must be undertaken without the use of hindsight. Where prior periods are not restated, the cumulative effect of applying the amendments is recognised through an adjustment to opening retained earnings or another appropriate component of equity at the date of initial application. Entities are also provided certain disclosure reliefs in the first year of application where prior periods have not been restated.

Who Will Be Affected?

The amendments have implications across a range of businesses and are not limited to entities operating in the renewable energy sector.

· Companies using electronic payment systems will need to assess whether their payment arrangements satisfy the conditions for applying the new settlement practical expedient.

· Companies with sustainability-linked or ESG-linked borrowings should review the classification of financial instruments containing contingent features linked to environmental, social or other performance indicators.

· Companies purchasing renewable energy through PPAs or other long-term arrangements should reassess whether their contracts satisfy the revised own-use requirements and the net purchaser test.

· Entities holding FVOCI equity investments will need to comply with the enhanced disclosure requirements introduced under Ind AS 107.

· First-time adopters of Ind AS will also need to consider the revised transition requirements relating to hedge accounting for nature-dependent electricity contracts.

Conclusion

The Companies (Indian Accounting Standards) Amendment Rules, 2026 seek to address accounting issues arising from evolving financing structures, electronic payment systems and the increasing adoption of renewable energy arrangements. The amendments provide greater clarity on the treatment of sustainability-linked financial instruments, introduce a practical expedient for certain electronic payments, and establish a specific framework for nature-dependent electricity contracts and related hedge accounting. For companies preparing financial statements for periods beginning on or after April 1, 2026, the amendments warrant an early review of existing financial instruments, payment arrangements, renewable energy contracts and disclosure practices to assess their impact on accounting policies, classification, measurement and financial statement disclosures.

Foreign owned or controlled companies (FOCCs) occupy an unusual position in Indian regulation. Incorporated in India, they are treated as resident entities for most day-to-day purposes, but because of who owns and controls them, they simultaneously carry a foreign character when it comes to investment classification and pricing rules. It's not a legal contradiction; it's a deliberate design choice by regulators. But that dual identity creates a genuinely tricky question the moment an FOCC tries to fulfil its CSR obligations by donating to an Indian NGO: does the Foreign Contribution Regulation Act (FCRA) apply to that payment?

CSR Doesn't Care Who Owns You

Start with the basics. The Companies Act triggers CSR obligations based on financial thresholds revenue, net worth, or profit not on who owns the company. A foreign-owned entity that crosses those thresholds has the exact same CSR duty as a purely domestic one. So when an FOCC spends on CSR, it isn't doing so because it's foreign-owned; it's doing so because Indian company law treats it like any other Indian company that has hit the numbers. The obligation itself is entirely domestic in nature.

The complication shows up only once that CSR money moves specifically, when it lands with an Indian non-profit. At that point, the question shifts from 'what does company law require' to 'what is FCRA going to make of this payment.'

Where FCRA Steps In

FCRA operates on a restrictive default: no India-resident person or entity may accept 'foreign contribution' unless the law expressly allows it, typically through FCRA registration or prior government approval. Given that starting point, the natural question is whether CSR funds flowing from an FOCC to an NGO should be assessed under foreign exchange rules or under FCRA instead.

FCRA's definition of 'foreign contribution' is deliberately wide it captures donations or transfers of currency, articles, or securities from a 'foreign source.' So the real question becomes: does an FOCC itself qualify as a 'foreign source'?

Is an FOCC a 'Foreign Source'?

FCRA's definition of 'foreign source' is broad enough to sweep in foreign governments, foreign corporations, and even subsidiaries or multinational entities. On the surface, that looks like bad news for FOCCs; even though they're incorporated in India, their foreign ownership could arguably pull them into this category.

But the definition isn't absolute. FCRA carves out Indian companies that received their foreign investment properly  in compliance with India's foreign exchange laws and within permitted sectoral limits. Read plainly, that means simply being foreign-owned or controlled shouldn't automatically make a company a 'foreign source,' provided the investment came through the legitimate FDI route. For most FOCCs, that exception could meaningfully change the analysis in their favour.

There's a wrinkle, though. The Ministry of Home Affairs had earlier indicated, via FAQs, that foreign share capital flowing into Section 8 (not-for-profit) companies would count as foreign contribution a position that would have swept FOCC-linked capital back into FCRA's net. That FAQ has since been dropped from the MHA's current guidance, but without any explicit clarification replacing it. So the ambiguity hasn't been resolved; it's just been left unaddressed.

So Where Does That Leave FOCCs?

Put the pieces together and the picture is more nuanced than a straightforward 'yes' or 'no.' The broad definition of 'foreign source' initially seems to pull FOCCs toward FCRA's ambit. But the statutory exception for FDI-compliant Indian companies, combined with the MHA's quiet removal of its earlier restrictive FAQ, opens up a real argument that FOCC-routed CSR contributions may fall outside FCRA's reach even if that argument isn't yet backed by explicit regulatory confirmation.

That's the essence of the FOCC paradox: the same entity can be 'Indian' for one regulatory purpose and 'foreign-linked' for another, not because the frameworks contradict each other, but because each is answering a different question. Whether those answers line up consistently is something FOCCs  and the NGOs receiving their CSR funds still have to navigate carefully, ideally with specific legal advice before large CSR transfers are structured.

This piece is for general informational purposes only and does not constitute legal advice. Please consult a qualified professional for guidance specific to your situation.

India's data center race just got a new frontrunner. On July 9, 2026, the Gujarat government rolled out the Viksit Gujarat Data Center Policy 2026–2029, a standalone policy built specifically for hyperscale, colocation and AI-optimised data centers. It replaces the older, broader IT incentive framework that had governed the sector since 2022, signaling that Gujarat now sees data centers as a priority industry in their own right, not just a subset of IT.

Here's a breakdown of what the policy offers and why it matters.

A Generous Fiscal Package

The headline incentive is a 2.5% capital subsidy on Eligible Fixed Capital Investment for projects in the Dholera region, claimable over a 10-year window. Notably, the EFCI base is capped at 80% of total fixed capital investment or INR 60,000 crore — whichever is lower — which gives a sense of just how large a single project could be under this scheme.

Beyond that, developers can access:

• Interest subsidy of up to 4% per annum for 10 years, capped at INR 25 crore annually, on term loans used for capital investment

• Power tariff subsidy of INR 1 per unit for 20 years starting from commercial operations

• Full exemption on stamp duty and registration for land lease or purchase

• 100% reimbursement of electricity duty for 20 years

• SGST reimbursement covering plant and machinery, infrastructure, and operational services, running anywhere from 8 to 20 years depending on the category

• Additional capital support for captive desalination plants, tied to capacity

Importantly, total fiscal incentives are capped at 75% of EFCI within an 8-year investment window (extendable by 2 years), and payouts are spread over 20 years with annual disbursement limited to 5% of the total eligible amount, carried forward as needed. This is a long-horizon, structured incentive program rather than a one-time payout.

Regulatory and Operational Support

Gujarat is also easing the non-financial side of setting up a data center. The policy paves the way for state support in securing electricity distribution licenses, dual-feeder power supply from independent transmission sources, and access to open power procurement. These are the kinds of infrastructure guarantees that heavy-power industries like data centers care about as much as tax breaks.

On the ground, developers get relaxed construction norms: extra floor space index, up to 70% ground coverage, taller boundary walls, rooftop chiller installations (subject to clearances), and stacked utilities across floors. There's also a much lighter parking requirement — just one car space per 1,000 square metres of office area — reflecting how little foot traffic these facilities actually generate.

The Eligibility Bar Is High

This isn't a policy for small players. Only projects with an approved installed IT load capacity of 150 MW or above qualify, and incentives are capped at an aggregate installed capacity target of 7.5 GW statewide. In other words, Gujarat is deliberately courting hyperscalers and large colocation operators rather than spreading incentives thin across smaller entrants.

There's also a green energy mandate: at least 51% of electricity consumption must come from renewable sources, aligning the policy with India's broader clean-energy commitments even as it courts power-hungry AI infrastructure.

Why This Matters

With AI workloads driving explosive demand for compute and storage, states across India are competing to become the country's data center hub. Gujarat's policy — anchored around Dholera's planned smart city infrastructure — represents one of the most aggressive and structured incentive packages seen yet, combining capital subsidies, power cost relief, tax reimbursements and regulatory ease into a single package designed for the largest players in the industry.

For investors and operators evaluating India's data center landscape, this policy is worth close attention. The scale of incentives, the long disbursement horizon, and the operational flexibility built into the framework could make Gujarat a serious contender against established hubs like Mumbai, Chennai and Hyderabad.

The policy will remain in effect for three years from notification, unless extended or superseded.

The Hon’ble Supreme Court of India, on August 7, 2026, heard a batch of public interest petitions challenging provisions of the Digital Personal Data Protection Act, 2023 (DPDP Act) and the Digital Personal Data Protection Rules, 2025 (DPDP Rules). The principal challenge concerns Section 44(3) of the DPDP Act, which substitutes Section 8(1)(j) of the Right to Information Act, 2005 (RTI Act) and removes the earlier public-interest safeguard governing disclosure of personal information.

The lead petition, W.P. (C) No. 177 of 2026, filed by RTI expert Venkatesh Nayak, has been heard along with connected matters challenging various provisions of the DPDP framework. The petition principally challenges Sections 44(3), 17(1)(c), 17(2), 33(1) and 36 of the DPDP Act, read with Rules 17 and 23(2) of the DPDP Rules, on the ground that they violate Articles 14, 19(1)(a) and 21 of the Constitution.

The Court had earlier, by order dated February 16, 2026, issued notice and declined to stay the operation of the DPDP framework. The Court observed that the petitions raised complex and constitutionally sensitive questions concerning the balance between the right to privacy and the right to information and indicated that the matter warranted consideration by a larger Bench.

Latest Proceedings before the Supreme Court

A Bench comprising Chief Justice Surya Kant and Justices Joymalya Bagchi and V. Mohana heard submissions advanced on behalf of the petitioners. Solicitor General Tushar Mehta appeared for the Union of India.

The petitioners contended that the amendment to Section 8(1)(j) of the RTI Act substantially alters the existing balance between the right to information and the right to privacy. It was argued that information concerning public officials, public functions and matters of public interest could now potentially be denied merely because it is characterised as “personal information”.

The petitioners further submitted that the amendment could adversely affect investigative journalism, as journalists may be required to obtain consent from the concerned data principal and individuals could subsequently seek erasure of information relevant to public-interest reporting.

The Bench indicated that it would examine, among other issues, whether the distinction between digital personal data and other forms of information constitutes an intelligible differentia having a rational nexus with the object of the legislation and whether the amended law can impose a blanket prohibition on disclosure of personal information.

The Union of India’s counter affidavit is awaited.

Section 44(3) and the RTI Act

Prior to the amendment, Section 8(1)(j) of the RTI Act provided a structured exemption for personal information. Disclosure could be restricted where the information had no relationship with public activity or interest or where disclosure would cause an unwarranted invasion of privacy, unless the competent authority was satisfied that the larger public interest justified disclosure.

The provision also contained a proviso stating that information which could not be denied to Parliament or a State Legislature could not be denied to any person.

Section 44(3) of the DPDP Act substitutes the existing provision with a substantially shorter formulation:

“(j) information which relates to personal information.”

According to the petitioners, the amendment removes the earlier safeguards and converts a qualified exemption into a broad restriction on disclosure of personal information. The petitioners have contended that the amendment eliminates the statutory mechanism through which a Public Information Officer or appellate authority could balance privacy concerns against the larger public interest.

Constitutional Challenge to the Amendment

The petitioners have challenged the amendment on several constitutional grounds.

First, it has been contended that the right to information forms part of the fundamental rights protected under Article 19(1)(a), and that removing the public-interest override imposes an unreasonable restriction on that right.

Second, the petitioners have argued that privacy cannot, by itself, constitute a ground for restricting a right protected under Article 19(1)(a) beyond the permissible restrictions contemplated by Article 19(2).

The petitioners have further relied upon the jurisprudence recognising the public’s right to information concerning public functionaries and public activities. According to the challenge, the amendment reverses the balance previously recognised by the Supreme Court between transparency and privacy.

The petitioners have also invoked the proportionality doctrine, contending that a blanket restriction on disclosure prevents the case-by-case balancing of competing rights contemplated under the existing RTI framework.

Another ground of challenge is that the DPDP Act primarily regulates digital personal data, whereas the amended Section 8(1)(j) of the RTI Act refers broadly to “personal information”. The petitioners therefore contend that the amendment travels beyond the stated scope and objects of the DPDP legislation.

The amendment has also been challenged under Article 14 on the ground that it allegedly treats public functionaries and ordinary citizens alike despite the different public-interest considerations involved in disclosure concerning persons exercising public functions.

The deletion of the proviso relating to information that cannot be denied to Parliament or a State Legislature has also been challenged as undermining the principle of informational symmetry between elected representatives and citizens.

Challenge to Surveillance and Administrative Provisions

The petitions also raise constitutional challenges to several other provisions of the DPDP Act and Rules.

Sections 17(1)(c) and 17(2) have been challenged on the ground that they provide broad exemptions to State and non-State actors from the ordinary requirements of the data protection framework without adequate safeguards, review mechanisms or objective scrutiny.

Section 33(1), which provides for penalties where a data breach is considered “significant”, has been challenged on the ground that the expression “significant” is not sufficiently defined and may confer unguided discretion.

Section 36 has also been questioned for empowering the Central Government to require information from the Data Protection Board or data fiduciaries without, according to the petitioners, adequate limitations regarding the purpose, scope or review of such power.

Rule 23(2) of the DPDP Rules has similarly been challenged for permitting exemptions from informing the Data Principal in specified circumstances involving sovereignty and integrity concerns without providing adequate procedural safeguards.

The petitioners have also questioned Rule 17, which governs the Search-cum-Selection Committees for appointment of the Chairperson and members of the Data Protection Board. It is contended that the predominance of the Executive in the appointment process raises concerns regarding the independence of a body exercising quasi-judicial functions.

The broad definitions of “data fiduciary”, “processing” and “personal data” have further been challenged on the ground that they may bring journalists, academics, lawyers, researchers and NGOs within the compliance framework and potentially have a chilling effect on rights under Articles 19(1)(a) and 19(1)(g).

Relief Sought

The lead petitioner has sought a declaration that Sections 44(3), 17(1)(c), 17(2), 33(1) and 36 of the DPDP Act, together with Rules 17 and 23(2) of the DPDP Rules, are unconstitutional and violative of Articles 14, 19(1)(a) and 21 of the Constitution.

The petitions also seek appropriate directions to safeguard the right to information and ensure adequate procedural and constitutional safeguards in the implementation of the data protection framework.

Connected Petitions

The proceedings have been heard along with several connected petitions raising overlapping constitutional challenges.

In The Reporters Collective Trust & Anr. v. Union of India, W.P. (C) No. 211 of 2026, the petitioners have challenged, among other provisions, the absence of an exemption for processing personal data for journalistic purposes and the powers conferred upon the Central Government under Section 36 read with Rule 23.

The National Campaign for People’s Right to Information (NCPRI), in W.P. (C) No. 212 of 2026, has raised similar concerns regarding the impact of the DPDP framework on the RTI regime.

Another petition, Geeta Sheshu & Anr. v. Union of India & Ors., W.P. (C) No. 275 of 2026, raises a broader challenge to the DPDP Act and Rules, including issues concerning journalistic exemptions, State data processing, compensation for affected Data Principals, independence of the Data Protection Board and safeguards against surveillance.

The petition also alleges that the present framework represents a departure from the privacy framework recognised in K.S. Puttaswamy and the recommendations of the B.N. Srikrishna Committee.

Since notice was issued, further petitions raising similar challenges, including W.P. (C) Nos. 286, 655 and 722 of 2026, have also been tagged with the lead matter.

Conclusion

The proceedings before the Supreme Court raise a significant constitutional question concerning the interaction between privacy, data protection and transparency.

At the centre of the challenge is Section 44(3) of the DPDP Act and its amendment to Section 8(1)(j) of the RTI Act. The Court will have to examine whether the removal of the earlier public-interest balancing mechanism creates an impermissible restriction on the right to information and whether the amended provision satisfies the constitutional requirements of equality and proportionality.

The proceedings also raise wider questions concerning State exemptions, governmental access to data, independence of the Data Protection Board and safeguards against surveillance.

As the Union Government’s response is awaited, the constitutional validity of the challenged provisions remains under consideration before the Supreme Court.

This article is based on the proceedings and contentions reflected in the materials provided and does not represent a final determination by the Supreme Court.

The Joint Committee of Parliament examining the Corporate Laws (Amendment) Bill, 2026, chaired by Shri Sudheer Gupta, has presented its report to the Lok Sabha and laid it before the Rajya Sabha on August 3, 2026. The Committee has broadly endorsed the Bill, which seeks to amend the Companies Act, 2013 and the Limited Liability Partnership Act, 2008 to ease compliance, decriminalise procedural defaults and strengthen corporate governance.

After examining more than 900 suggestions received from stakeholders, the Committee has recommended a number of targeted modifications to the Bill. The Committee recorded 169 numbered observations and recommendations and adopted its report at its 25th sitting held on July 31, 2026. Two of the 31 members submitted notes of dissent.

Key Recommendations of the Joint Committee

1. Annual Filing Framework for Regulated LLPs : One of the significant recommendations relates to LLPs regulated by SEBI or the International Financial Services Centres Authority (IFSCA), including Alternative Investment Funds (AIFs). The Committee has recommended that prescribed classes of such LLPs should be permitted to file changes to their LLP agreements annually, instead of being required to report every change within 30 days. The recommendation seeks to address the frequent entry and exit of partners in AIF structures, which had reportedly discouraged AIFs from adopting the LLP structure, The Committee has accepted the corresponding relaxation for reporting changes in partners under Section 25(2) of the LLP Act. However, changes in designated partners would continue to require intimation within 30 days under Section 9.

2. Confidentiality of Investor Information

The Committee has recommended inserting a proviso to Section 36 of the LLP Act to restrict public inspection of specified documents relating to prescribed classes of LLPs registered and regulated by SEBI or IFSCA. The proposed protection is particularly relevant for structures involving sovereign funds, institutional investors and family offices, where disclosure of investor information may raise legitimate privacy and commercial confidentiality concerns.

3. New Provisions for LLPs

The Committee has proposed insertion of three new provisions—Sections 69A, 69B and 69C—in the LLP Act.

These provisions would provide for:

• Refund of fees where a filing fails for technical reasons;
• Rectification of clerical, arithmetical, typographical or factual errors in filed documents; and
• Application of relevant consent and data-processing provisions of the Digital Personal Data Protection Act, 2023 to specified electronic records maintained under the LLP Act.

The Committee has also recommended that the Ministry of Corporate Affairs consider specifically including Category I and Category II AIFs within the prescribed class of LLPs eligible for the proposed annual reporting and foreign currency contribution-related reliefs.

4. Director Disqualification Framework

The Committee has recommended substantial changes to the proposed amendments relating to director disqualification. It has recommended dropping the proposed “fit and proper person” criterion under Section 164(1)(k), observing that such a standard may not be capable of objective application across different categories of directors and that leaving its substantive contours to subordinate legislation could amount to excessive delegation.

The Committee has also recommended removing the proposed disqualification arising from having been “subjected to penalty for default”, noting that such a provision would be inconsistent with the Bill’s broader objective of decriminalising procedural defaults. Further, the Committee has recommended reducing the cooling-off period applicable to auditors, secretarial auditors, cost auditors, registered valuers and insolvency professionals to two years.

5. Changes to Buy-Back Provisions

The Committee has supported the proposed additional flexibility relating to buy-backs but found the drafting concerning the permissible limits and timing of multiple offers unclear. It has recommended that Section 68(2)(c) be redrafted to permit prescribed classes of companies to buy back up to 25% or such higher percentage of paid-up capital and free reserves, subject to an express ceiling of 25% of total paid-up equity capital in any financial year. The Committee has also recommended clarification of the two-offer mechanism under Section 68(2)(g), including that both offers should fall within one year from commencement of the first offer and that no further buy-back should take place within six months of closure of the preceding offer.

6. Registration of Charges

The Committee has supported the proposed extension of the period for registration of charges from 60 days to 120 days. However, it observed that referring merely to a “class of companies” did not adequately reflect the legislative intention of providing relief to small companies. Accordingly, it has recommended that Section 77(1) be appropriately redrafted to make the intended benefit clearer.

7. Voluntary Strike-Off of Companies

The Committee has recommended strengthening the framework governing voluntary strike-off. The Registrar would be required to decide an application for strike-off within 60 days of receipt of a complete application, with reasons to be recorded where the process is delayed. The Committee has also recommended extending voluntary strike-off provisions to inactive Section 8 companies having no assets, liabilities or public funds.

8. CSR Framework

The Committee has endorsed the proposed increase in the CSR applicability threshold under Section 135, including:

• Increase in the net profit threshold from ₹5 crore to ₹10 crore; and
• Increase in the CSR Committee exemption threshold from ₹50 lakh to ₹1 crore.

However, the Committee has recommended safeguards around the proposed negative list of entities that may be prohibited from receiving CSR contributions. The Committee has suggested that exclusion criteria should be objective and transparent, based solely on statute or orders of a competent authority, operate only for the period and conditions specified in the relevant notification, and provide a statutory mechanism for removal once the grounds for exclusion cease to exist. The Committee has also recommended extending the period for transferring unspent CSR amounts relating to ongoing projects from 30 days to 90 days, in line with the proposed extension for other unspent CSR amounts.

Separately, the Government has been asked to examine whether CSR contributions may be permitted in kind, subject to appropriate valuation, verification and disclosure safeguards.

9. Reforms Relating to NFRA

The Committee has proposed several changes to the proposed framework governing the National Financial Reporting Authority (NFRA).

Among other recommendations, it has proposed:

• Deletion of the words “general or” from the proposed delegation power;
• Limiting “professional or other misconduct” to audit-related matters;
• Removing the proposed six-month imprisonment provision;
• Reducing proposed penalties under Sections 132A(3) and 132C(2);
• Requiring NFRA to conduct an enquiry before issuing directions under Section 132C;
• Aligning recovery provisions with the proposed Section 454B; and
• Removing the provision transferring the power to appoint NFRA's Secretary and employees from the Central Government to NFRA.

These recommendations are intended to maintain regulatory accountability while ensuring consistency with the Bill's broader decriminalisation approach.

10. Fast-Track Mergers and Minority Shareholder Protection

The Bill proposes reducing the shareholder approval threshold for fast-track mergers under Section 233 from 90% to three-fourths in value of members present and voting. The Committee has supported the broad objective but considered the proposed reduction insufficient to address minority shareholder concerns. It has therefore recommended providing dissenting shareholders with a fair-value exit or buy-out option in the manner prescribed. The Committee has also recommended that the reduced creditor approval threshold of three-fourths be calculated with reference to creditors present and voting, aligning the provision with Section 230. Further, it has recommended a definite 60-day timeline for the Registrar or C-PACE to decide applications under Section 233, with reasons to be recorded for delay and a proposed deemed-approval mechanism where the application is not decided within the prescribed period.

11. Conversion of Specified Trusts

The Bill contemplates a framework for conversion involving single-scheme trusts. The Committee has recommended an enabling carve-out for multi-scheme specified trusts registered or regulated by SEBI or IFSCA, along with a detailed framework addressing the legal and operational consequences of such conversion.

12. Register of Members and Trusts

The Committee has recommended insertion of a new Section 88(2A) providing that notice of any trust should not be entered in the register of members or debenture holders. Under the proposed framework, the trustee would continue to be recorded as the legal owner, while the trust may be recognised as the beneficial owner in accordance with the relevant provisions of the Companies Act. Companies that already have such entries would be given one year to remove them.

13. Changes to Director Age Limits

The Committee has recommended amendments to Section 196(3)(a) concerning the age requirements for appointment as a Managing Director, Whole-time Director or Manager.

The proposed changes would:

• Reduce the minimum age from 21 years to 18 years; and
• Increase the upper age limit from 70 years to 75 years.

The recommendation seeks to provide greater flexibility in the appointment of managerial personnel.

14. Notice Period for EGMs of Listed Companies

The Committee has accepted the proposed reduction of the notice period for extraordinary general meetings conducted entirely through video conferencing to seven days for companies generally.

However, following SEBI's submission, it has recommended a separate requirement of at least 15 days' notice for listed companies, considering the nature and significance of resolutions typically placed before shareholders at an EGM.

15. Cross-Border Schemes of Arrangement

The Committee has accepted the proposed single-bench treatment for schemes of arrangement under Section 230. However, it has recommended inserting a clarification that the single-bench requirement would not apply to applications under Section 234, which governs cross-border mergers. This seeks to maintain the distinct procedural framework applicable to cross-border transactions.

16. Legacy Treasury Shares

The Committee has recommended a new Section 233A dealing with shares held by a transferee company in its own name or through a trust pursuant to a compromise or arrangement undertaken before the commencement of the Companies Act, 2013. Such shares would have to be dealt with or disposed of within three years from commencement of the amending legislation. Shares remaining undisposed of after this period would be cancelled and extinguished, with such cancellation being deemed to constitute a reduction of share capital to which Section 66 would not apply. Continuing default would attract a penalty of ₹10,000 per day on the company and every officer in default. The Committee has recommended that affected companies, particularly entities involved in older restructuring arrangements, undertake a shareholding audit to identify such legacy holdings.

17. Compounding of Offences

The Committee has endorsed the proposed increase in the Regional Director's jurisdiction for compounding offences. The monetary threshold would increase from offences punishable with a fine of up to ₹25 lakh to ₹1 crore. The Committee noted the Ministry's assessment that approximately 90% of compounding applications could fall within the jurisdiction of Regional Directors. It has also recommended amendments to Section 441 to provide greater clarity regarding the persons who may apply for compounding and to provide statutory backing for end-to-end electronic compounding.

Provisions Accepted Without Amendment

Apart from the above recommendations, the Committee has accepted several provisions of the Bill without modification.

These include:

• Enhanced thresholds for determining a small company under Section 2(85);
• Extension of share-linked schemes to restricted stock units and stock appreciation rights;
• Reduced board-meeting and director-interest disclosure requirements;
• Proportional penalty provisions under Section 446B; and
• Increased thresholds for fraud-related provisions under Section 447.

Conclusion

The Joint Committee's report represents a substantial review of the Corporate Laws (Amendment) Bill, 2026, while retaining the Bill's broader objectives of reducing compliance burdens, rationalising penalties and improving the ease of doing business. The recommendations are particularly significant for LLPs, AIFs, listed companies, directors, auditors, companies undertaking mergers, entities subject to CSR obligations and companies dealing with legacy shareholding structures.

At the same time, several recommendations seek to introduce additional safeguards, particularly in relation to minority shareholder protection, CSR recipients, director disqualification, NFRA powers and confidentiality of investor information. The Bill, as reported by the Joint Committee, now returns to Parliament for consideration. It is not yet law. Under Clause 1, the amendments will come into force only from such date as the Central Government may notify in the Official Gazette, and different dates may be appointed for different provisions. Accordingly, companies and other stakeholders should treat the Committee's recommendations as part of the legislative process and not as presently enforceable amendments to the Companies Act, 2013 or the LLP Act, 2008.

The Lok Sabha, on August 5, 2026, passed the Bankers’ Books Evidence Bill, 2026, seeking to replace the Bankers’ Books Evidence Act, 1891 and modernise the legal framework governing the use of banking records as evidence in legal proceedings.

The erstwhile legislation was enacted at a time when banking records were predominantly maintained in physical form. While the framework was subsequently amended by the Information Technology Act, 2000 to accommodate computer-generated records, the rapid digitisation of banking operations has created a need for a more comprehensive statutory framework.

The 2026 Bill seeks to address this shift by expressly recognising electronic and digital banking records, including records maintained through cloud-based systems and disaster-recovery infrastructure, while prescribing safeguards for their authenticity, integrity and admissibility.

Key Provisions of the Bill

1. Expanded Definition of “Bankers’ Books”

Section 2 substantially expands the scope of the expression “bankers’ books.”

The definition covers ledgers, day-books, cash-books, account books and other records maintained in the ordinary course of banking business, irrespective of whether such records are maintained in physical form or through electronic or digital mechanisms.

Importantly, the definition also extends to records maintained at:

• Onsite locations;
• Offsite locations;
• Virtual or cloud locations; and
• Backup or disaster-recovery sites.

The expanded definition therefore seeks to ensure that the evidentiary framework remains applicable to the manner in which banking data is actually generated, stored and maintained in modern banking systems.

2. Separate Certification Regimes for Physical and Digital Records

The Bill introduces separate certification mechanisms for physical and electronic records.

Certified copies of physical bankers’ books are to be prepared in the form prescribed under the First Schedule, while certified copies of electronic or digital records are to follow the form prescribed under the Second Schedule.

The certificate must contain the date of certification and the name and designation of the certifying officer. It may be signed or authenticated manually or through a digital or electronic signature in accordance with the Information Technology Act, 2000.

Certification may be undertaken by the branch head, office head or another officer duly authorised by the bank.

This framework provides a formal mechanism for establishing the authenticity of both physical and digitally maintained banking records.

3. Recognition and Admissibility of Electronic Records

A key feature of the Bill is the express recognition of electronic and digital bankers’ books.

Section 6 provides that the admissibility of an electronic or digital record cannot be denied merely because the record exists in electronic form.

However, admissibility is subject to the safeguards prescribed under Section 7. These include requirements relating to:

• Regular use of the relevant system;
• Proper operation of the system;
• Absence of unauthorised alteration or tampering;
• Entry of data by authorised persons;
• Secure transfer of records onto identifiable removable media; and
• Adequate security of the network and devices against cyber risks.

The proposed framework therefore places particular emphasis on the authenticity, integrity and reliability of electronic banking records.

4. Wider Definition of “Legal Proceeding”

The Bill adopts a broad definition of “legal proceeding” under Section 2.

The expression includes proceedings or inquiries in which evidence may be taken, arbitration proceedings, and investigations or inquiries undertaken for the collection of evidence under the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS) or any other law by a police officer or other authorised person.

Accordingly, the evidentiary framework is not confined to conventional court proceedings and extends to arbitration and specified investigative proceedings.

5. Extension to Other Financial-Sector Entities

Section 4 empowers the Central Government to extend the application of the proposed legislation to the books of any entity or class of entities operating in the financial sector.

Such extension may be made through notification and may be subject to conditions prescribed by the Government.

The Government may also rescind, vary or modify such notification.

This provision provides flexibility to bring other financial-sector entities within the statutory framework as the financial ecosystem evolves.

6. “Special Cause” for Compelling Bank Officers

The Bill also provides safeguards against unnecessary compulsion of bank officers in legal proceedings.

Under Section 8, where the bank is not a party to the proceeding, an officer of the bank cannot ordinarily be compelled to produce bankers’ books or appear as a witness.

An exception may be made where the Court records “special cause” in writing.

Special cause may arise where:

• The accuracy or genuineness of an entry is in doubt;
• The regularity of record-keeping has been interrupted; or
• The bank has failed to comply with an order for inspection.

The provision seeks to strike a balance between the evidentiary requirements of proceedings and the need to prevent unnecessary production of banking records or appearance of bank officials.

7. Inspection and Production of Bank Records

Section 9 establishes the procedure for inspection and production of bankers’ books.

On an application by a party, the Court may permit inspection and copying of relevant entries or direct the bank to produce certified copies.

The Court may also require the bank to provide a certificate confirming that no other relevant entries exist.

Ordinarily, such an order must be served upon the bank three clear days before it is required to be complied with, excluding bank holidays, unless the Court directs otherwise.

This mechanism is intended to facilitate access to relevant banking evidence while maintaining procedural safeguards for banks.

8. Investigations under the BNSS

The Bill also provides a specific mechanism for investigations and inquiries falling within the definition of “legal proceeding”.

Where Sections 8 to 10 apply to such an investigation or inquiry, references to an order of the Court are to be read as references to an order of an officer not below the rank of Superintendent of Police, or such other officer as may be specified.

This enables authorised investigative authorities to obtain relevant banking records in accordance with the statutory framework.

Practical Significance

The proposed legislation represents a significant modernisation of the legal framework governing banking evidence. The express recognition of electronic, digital, cloud-based and disaster-recovery records is particularly relevant given the increasing reliance of banks on centralised databases, digital banking platforms and technology-driven record management systems. For banks, the Bill places greater emphasis on maintaining reliable systems, preventing unauthorised alteration of records and ensuring that electronically generated records can satisfy the prescribed evidentiary requirements. For courts, litigants, arbitrators and investigating authorities, the framework is expected to provide greater clarity regarding the manner in which certified banking records may be produced and relied upon as evidence. At the same time, the safeguards relating to certification, inspection and the production of original banking records seek to protect banks from unnecessary disclosure and avoid disruption to their ordinary operations.

Conclusion

The Bankers’ Books Evidence Bill, 2026 seeks to replace a century-old evidentiary framework with legislation designed for the realities of modern digital banking. By recognising electronic and digital records on an express statutory footing, prescribing dedicated certification mechanisms and introducing safeguards relating to authenticity, integrity and cyber security, the Bill seeks to make the evidentiary process more compatible with contemporary banking systems. The Bill, as passed by the Lok Sabha on August 5, 2026, will now proceed to the Rajya Sabha. It will come into force on such date as the Central Government may appoint by notification in the Official Gazette. If enacted, the new framework is likely to have significant practical implications for banks, financial-sector entities, courts, arbitrators, litigants and investigating authorities, particularly in proceedings where electronically maintained banking records constitute an important part of the evidence.

The Ministry of Ports, Shipping and Waterways has notified the Indian Ports Rules, 2026, bringing into operation the procedural framework under the Indian Ports Act, 2025 with effect from July 21, 2026. Framed under Sections 76 and 78 of the Act, the Rules prescribe the manner in which the statutory provisions governing ports are to be implemented and establish a detailed compliance regime for port authorities, vessel operators, and other maritime stakeholders.

While the Indian Ports Act, 2025 provides the legislative foundation for regulating India’s ports, the newly notified Rules operationalise the statute by laying down procedures relating to port administration, environmental compliance, waste management, pollution reporting, navigational safety, and welfare of seafarers.

One of the most significant aspects of the Rules is the introduction of a comprehensive framework for managing ship-generated waste and strengthening environmental compliance at Indian ports.

Scope and Applicability

The Rules apply in their entirety to all major ports as well as notified navigable rivers and channels leading to ports.

For ports other than major ports, the applicability is more limited. Only specific provisions dealing primarily with waste management, pollution control, navigational matters, and welfare obligations apply.

This differentiated approach recognises the varying operational capacities of different categories of ports while ensuring that essential environmental and safety standards are uniformly maintained across the sector.

Strengthening Port Administration

The opening chapter of the Rules establishes the administrative framework necessary for implementing the Indian Ports Act, 2025.

The Rules define several key expressions that underpin the regulatory framework, including:

·       Advance Waste Notice;

·       Pollution Incident;

·       Maritime Single Window;

·       Port Waste Reception and Handling Plan;

·       Shore-based Welfare Services; and

·       Waste Delivery Receipt.

The Rules further provide for the appointment of officers and employees serving the Maritime State Development Council, appointment of port officers, delegation of powers by the Conservator with Government approval, and appointment of Health Officers for every major port.

In addition, receipts issued for fees and other charges collected under the Act must now follow the prescribed format and be retained for a minimum period of seven years, strengthening administrative accountability and record management.

A Comprehensive Framework for Ship-Generated Waste

The most significant reforms introduced by the Rules relate to environmental protection and management of ship-generated waste.

Every port is now required to establish, operate and maintain adequate Port Reception Facilities capable of receiving waste from vessels without causing undue operational delay.

The facilities must be capable of handling waste falling under Annexes I, II, IV, V and VI of the MARPOL Convention, thereby aligning India’s domestic framework with internationally accepted maritime environmental standards.

The Rules also prescribe technical and operational standards governing these facilities and lay down procedures for the handling and disposal of waste received from vessels.

The emphasis on adequate waste reception infrastructure reflects India’s commitment to reducing marine pollution while ensuring compliance with global maritime obligations.

Mandatory Port Waste Reception and Handling Plans

Each port is required to prepare a Port Waste Reception and Handling Plan in consultation with stakeholders, including shipping agents and other port users.

The Plan must identify:

·       Available reception facilities;

·       Procedures for waste collection and handling;

·       Charging mechanisms;

·       Consultation processes with users; and

·       Other operational arrangements relating to waste management.

Unlike the draft Rules released earlier in 2026, the final Rules provide that the Plan will be approved by the port’s Board rather than the Central Government.

Similarly, while the Authority may review the Plan every two years, such review is no longer mandatory, providing greater operational flexibility.

The Rules also require the Plan to be made available to port users, preferably through electronic means, thereby improving transparency and accessibility.

New Obligations for Vessel Operators

The Rules impose several important compliance obligations upon vessels calling at Indian ports.

Every vessel intending to enter a port must submit an Advance Waste Notice at least twenty-four hours before arrival, irrespective of whether any waste is intended to be discharged.

Before departure, the master of the vessel must ensure that all waste which cannot lawfully be discharged at sea is delivered to the designated Port Reception Facility unless an exemption has been granted under the prescribed conditions.

These requirements are intended to improve advance planning, reduce operational delays, and minimise unlawful discharge of waste into marine environments.

Waste Delivery Receipts and Record-Keeping

The Rules introduce strict documentation requirements relating to waste disposal.

Following completion of waste discharge, every Port Reception Facility must issue a Waste Delivery Receipt within one hour.

Where issuance is delayed, the reasons must be recorded in writing.

Ports are also required to maintain records of all waste delivery receipts and preserve them for future inspection, thereby strengthening regulatory oversight and ensuring traceability of waste management activities.

Biennial Audits and Pollution Reporting

Environmental compliance under the Rules is reinforced through mandatory audits.

Port Reception Facilities must undergo audits at least once every two years, conducted by auditors authorised by the Directorate General of Maritime Administration.

Any deficiencies identified during the audit are ordinarily required to be rectified within ninety days, while audit records must be retained for a minimum period of seven years.

The Rules also establish a detailed reporting framework for pollution incidents occurring within port limits.

The reporting timeline is particularly stringent:

·       Initial verbal reporting by the vessel’s master within fifteen minutes of detecting the incident;

·       Submission of a Coastal Pollution Incident Report by the port within two hours; and

·       A detailed supplementary report within twenty-four hours.

These timelines are intended to facilitate rapid emergency response and minimise environmental damage.

Operational and Welfare Provisions

Beyond environmental compliance, the Rules also address a range of operational matters relating to port administration.

These include procedures governing:

·       Notification of navigable rivers and channels;

·       Declaration of new ports and alteration of port limits;

·       Removal of navigational obstructions and payment of compensation;

·       Recovery of expenses for damage caused to port property;

·       Reporting vessel arrivals through the Maritime Single Window; and

·       Appointment of authorities responsible for imposing statutory penalties.

The Rules further strengthen India’s commitment to seafarer welfare by requiring ports to provide shore-based welfare services on a non-discriminatory basis in accordance with the Maritime Labour Convention, 2006.

Ports must also facilitate access to consular assistance and fair treatment mechanisms while ensuring compliance with applicable international maritime conventions.

Practical Implications

The Indian Ports Rules, 2026 significantly expand the compliance obligations of both port authorities and vessel operators.

Ports will need to review existing waste reception infrastructure, update operational procedures, strengthen record-keeping systems, and establish mechanisms for timely pollution reporting and periodic audits.

Shipping companies and vessel operators, meanwhile, must ensure compliance with advance waste notification requirements, waste disposal procedures, and documentation obligations before entering or departing Indian ports.

Notably, the Rules came into force immediately upon publication and do not provide any transition period. Consequently, regulated entities are expected to comply with the new framework without delay.

Conclusion

The Indian Ports Rules, 2026 represent a major step in operationalising the Indian Ports Act, 2025 and modernising India’s port governance framework. By introducing detailed procedures governing port administration, environmental protection, ship-generated waste management, pollution reporting, record maintenance, and seafarer welfare, the Rules align India’s regulatory framework more closely with international maritime standards.

For ports and maritime operators, the notification marks the beginning of a more structured compliance regime that places greater emphasis on environmental accountability, operational transparency, and regulatory oversight. Early review of internal policies, infrastructure, and reporting mechanisms will be essential to ensure compliance with the new requirements and to minimise operational and regulatory risks.

The Reserve Bank of India (RBI) has released its much-awaited draft Guidance on Regulatory Expectations for Data Governance, inviting public comments until August 17, 2026. The proposed framework marks a significant shift in the regulatory treatment of data, recognising it not merely as an operational resource but as a strategic organisational asset that requires board-level oversight, clearly defined accountability, and enterprise-wide governance.

Applicable to banks, non-banking financial companies (NBFCs), and several other RBI-regulated entities, the draft seeks to establish a uniform framework governing the entire data lifecycle from data creation and collection to storage, processing, sharing, and eventual archival or disposal. Once finalised, it is expected to become the baseline regulatory standard for data governance across India's financial sector.

A Shift Towards Enterprise-Wide Data Governance

The draft draws heavily from evolving international best practices, particularly the Basel Committee on Banking Supervision's Principles for Effective Risk Data Aggregation and Risk Reporting (BCBS 239). Rather than treating data governance solely as an information technology or compliance function, the RBI proposes integrating it into an institution's overall governance, risk management, and business strategy.

The framework requires every regulated entity to adopt a Board-approved Data Governance Framework that is proportionate to its size, complexity, business model, and technology architecture. The framework must also be reviewed at least annually to ensure that it remains aligned with evolving regulatory and operational requirements.

This approach reflects the RBI's increasing emphasis on strengthening data integrity, improving supervisory reporting, and enhancing operational resilience across the financial sector.

Board-Level Oversight and Dedicated Data Leadership

One of the defining features of the proposed framework is the introduction of a structured governance model with clearly demarcated responsibilities.

Every regulated entity will be required to establish a dedicated Data Function headed by a senior executive not below the rank of Chief General Manager (or its equivalent). This function will serve as the central coordination point for all enterprise-wide data governance activities.

The framework also requires each data domain to have clearly designated personnel responsible for different aspects of data management, including:

• Data Owner – responsible for business accountability and governance of data;
• Data Steward – responsible for maintaining data quality and ensuring adherence to governance standards; and
• Data Custodian – responsible for the technical management, security, and storage of data.

To ensure effective oversight, the RBI proposes a two-tier governance structure comprising:

• a Board-level Data Governance Committee (DGC) responsible for strategic oversight; and
• an Executive-level Data Governance Executive Committee responsible for operational implementation.

Despite the delegation of responsibilities, the Board of Directors will continue to retain ultimate responsibility for the institution's data governance framework.

Greater Focus on Data Quality and Traceability

The draft places considerable emphasis on the quality, accuracy, and reliability of organisational data.

Regulated entities are expected to ensure that data is accurate, complete, consistent, and fit for its intended purpose. Institutions must establish mechanisms for identifying and rectifying data quality issues in a timely manner while maintaining continuous oversight over data integrity.

The RBI has also proposed mandatory implementation of enterprise-wide metadata management and data lineage frameworks.

Data lineage refers to the ability to trace the origin, movement, transformation, and usage of data throughout its lifecycle. Such traceability is expected to enhance transparency, facilitate regulatory reporting, and improve internal risk management.

Importantly, data governance is expected to be closely integrated with the institution's broader risk management framework, reflecting the RBI's recognition that poor data quality itself constitutes a significant operational risk.

The Single Source of Truth Requirement

Perhaps the most ambitious aspect of the draft is the requirement that every regulated entity maintain a Single Source of Truth (SSOT) for its organisational data.

The objective is to eliminate multiple inconsistent datasets across different business functions by ensuring that all users rely upon one authoritative source of information.

The RBI has also proposed that institutions classify data based on its:

• criticality;
• sensitivity; and
• regulatory relevance.

This classification framework is intended to facilitate more effective data management while ensuring appropriate protection for sensitive and business-critical information.

For many large financial institutions, however, implementing a true SSOT may prove to be one of the most challenging aspects of the proposed framework, given the existence of multiple legacy systems operating across core banking, treasury, payments, cards, lending, and group entities.

Strengthened Controls Over Third-Party Data Access

The draft also introduces enhanced safeguards governing outsourced functions and third-party service providers.

Where regulated entities permit external vendors or service providers to access organisational data, access must be granted strictly on a need-to-know basis.

In addition, outsourcing agreements will be required to contain robust confidentiality obligations and appropriate safeguards governing the handling of institutional data.

The framework also addresses cross-border data risks by requiring institutions to assess and manage risks associated with overseas storage, processing, transfer, or usage of data. Importantly, such arrangements must not impair the regulated entity's ability to access, retrieve, manage, or supervise its own data.

Alignment with DPDP and Existing Regulatory Frameworks

The proposed guidance seeks to align data governance obligations with India's broader legal and regulatory framework.

Regulated entities will be expected to ensure compliance not only with RBI requirements but also with the Digital Personal Data Protection Act, 2023 and the Digital Personal Data Protection Rules, 2025.

The draft further requires institutions to integrate data governance into their compliance and enterprise risk management frameworks, thereby treating data governance as a core governance function rather than a standalone regulatory obligation.

Audit and Compliance Expectations

The RBI has proposed that the entire data governance framework be subject to periodic internal and external audits.

Where applicable, audits may also be conducted through CERT-In empanelled auditors, with audit findings being placed before the Audit Committee of the Board.

This reflects the regulator's expectation that data governance should remain subject to continuous independent assurance and board-level scrutiny.

Practical Challenges Ahead

While the draft represents a significant step towards strengthening governance of data within India's financial system, implementation is likely to present substantial practical challenges.

For large banks and upper-layer NBFCs, establishing a genuine Single Source of Truth across fragmented legacy systems may require significant technology investment and organisational restructuring. Enterprise-wide metadata management, data lineage mapping, and integration of multiple business systems are similarly expected to involve considerable operational effort.

Several aspects of the framework would also benefit from further regulatory clarification, including implementation timelines, transition periods, application of the proportionality principle to smaller institutions, and the interaction between the proposed guidance, existing RBI directions, and the Digital Personal Data Protection framework.

Conclusion

The RBI's draft Guidance on Regulatory Expectations for Data Governance marks a fundamental shift in how financial institutions are expected to manage organisational data. By elevating data governance to a board-supervised function supported by dedicated senior leadership, enterprise-wide accountability, and independent audit mechanisms, the regulator seeks to establish a more resilient, transparent, and risk-sensitive data ecosystem.

Although implementation will require substantial investment in governance structures, technology, and data architecture, the framework reflects the growing recognition that high-quality data is central to effective risk management, regulatory compliance, operational resilience, and customer trust. Once finalised, the guidance is expected to become a cornerstone of governance for banks, NBFCs, and other RBI-regulated entities operating in an increasingly data-driven financial landscape.

With digital payments becoming the backbone of India's financial ecosystem, the Reserve Bank of India (RBI) has significantly strengthened the regulatory framework governing customer protection against banking frauds. Through the Reserve Bank of India (Commercial Banks – Responsible Business Conduct) Third Amendment Directions, 2026, issued on June 24, 2026, the RBI has replaced its earlier framework on Limiting Liability of Customers in Unauthorised Electronic Banking Transactions with a far more comprehensive regime addressing fraudulent electronic banking transactions.

The revised framework, which will apply to all electronic banking transactions undertaken on or after January 1, 2027, reflects RBI's recognition of the evolving nature of digital frauds. Rather than focusing only on unauthorised transactions, the new regime seeks to address a wider spectrum of frauds while placing greater responsibility on banks to prevent fraud, respond promptly to customer complaints, and strengthen consumer confidence in digital banking.

A Broader Approach to Digital Banking Fraud

One of the most significant aspects of the amendment is the introduction of the concept of "fraudulent electronic banking transactions." Unlike the previous framework, which was largely confined to unauthorised transactions, the revised regime adopts a much broader definition.

Fraudulent electronic banking transactions now include:

• unauthorised electronic banking transactions;
• transactions executed by third parties using customer credentials obtained through fraudulent means; and
• transactions authorised by customers under coercion, intimidation or duress.

By recognising frauds that involve social engineering, phishing, credential theft, and coercive approvals, the RBI has aligned the regulatory framework with the realities of today's digital fraud landscape.

New Definitions Bring Regulatory Clarity

To operationalise the revised framework, the RBI has introduced several important definitions into the Principal Directions.

These include:

• Electronic Banking Transaction;
• Fraudulent Electronic Banking Transaction;
• Unauthorised Electronic Banking Transaction;
• Negligence by a Bank;
• Negligence by a Customer;
• Third-Party Breach; and
• Shadow Reversal.

The introduction of these definitions is expected to reduce ambiguity while ensuring greater consistency in determining liability and processing customer claims.

Enhanced Responsibilities for Banks

The amended framework substantially expands the obligations of banks.

Every bank is now required to formulate a transparent, fair and non-discriminatory Customer Protection Policy covering electronic banking transactions.

The policy must clearly address:

• customer rights and obligations;
• complaint handling procedures;
• fraud reporting mechanisms;
• timelines for grievance redressal; and
• customer awareness initiatives.

Beyond policy formulation, banks are expected to implement robust fraud prevention systems, continuously assess emerging fraud risks, strengthen cybersecurity controls, and undertake sustained customer awareness programmes relating to evolving digital fraud techniques.

The emphasis has clearly shifted from merely compensating customers after fraud occurs to proactively preventing fraud in the first place.

Stronger Customer Alert Mechanism

Recognising that early detection remains one of the most effective safeguards against fraud, the RBI has prescribed enhanced alert mechanisms.

Banks are now required to:

• obtain customers' mobile numbers and, wherever available, email addresses at the time of onboarding;
• periodically verify these contact details; and
• issue mandatory SMS alerts for every electronic banking transaction exceeding ₹500.

Additionally, email alerts must be sent for all electronic banking transactions wherever the customer has provided an email address.

These measures are intended to ensure that customers are immediately informed of suspicious activity and can promptly report any fraudulent transaction.

24×7 Fraud Reporting Channels

The revised framework also seeks to make fraud reporting significantly more accessible.

Banks must establish round-the-clock reporting channels, including:

• mobile banking applications;
• internet banking portals;
• dedicated email addresses;
• toll-free helplines;
• Interactive Voice Response (IVR) systems;
• instant messaging platforms;
• phone banking; and
• home branch reporting facilities.

Customers are also advised to report incidents simultaneously through the National Cyber Crime Reporting Portal or the National Cyber Crime Helpline (1930).

Upon receiving a complaint, banks are required to immediately acknowledge the complaint and initiate steps to prevent further fraudulent transactions.

Customer Liability Framework

The amended Directions provide a more comprehensive allocation of liability between banks and customers.

Zero Liability in Case of Bank Negligence

Customers will bear zero liability where the fraudulent transaction occurs due to negligence on the part of the bank, irrespective of whether the customer reported the fraud immediately.

Third-Party Breach

Where the fraud arises due to a third-party breach and the customer reports the incident within five calendar days, the customer will also enjoy zero liability.

Customer Negligence

Where the fraud occurs due to negligence attributable to the customer, the customer will bear the loss incurred only until the fraud is reported.

Once the fraud is reported, any subsequent loss must be borne entirely by the bank.

This framework seeks to balance consumer protection with the need for customers to exercise reasonable caution while using digital banking channels.

Introduction of Compensation Framework

A notable feature of the revised regime is the introduction of a structured compensation mechanism for small-value domestic fraudulent transactions.

Individual customers, including sole proprietors, suffering a gross loss of up to ₹50,000 may be eligible for compensation equal to:

• 85% of the net loss, or
• ₹25,000,

whichever is lower, subject to fulfilment of the prescribed conditions.

This represents an important step towards ensuring faster financial relief for victims of smaller digital frauds.

Shadow Reversal for Credit Card Fraud

The RBI has also introduced the concept of Shadow Reversal for fraudulent credit card transactions.

Under this mechanism, banks are required to provisionally reverse the disputed transaction amount in the customer's account within five calendar days of receiving the complaint.

Although customers cannot utilise the credited amount until the dispute is finally resolved, the mechanism ensures that they are not burdened with repayment obligations during the pendency of the investigation.

This is expected to significantly improve consumer confidence in credit card transactions.

Faster Complaint Resolution and Stronger Governance

The revised Directions also prescribe strict timelines for resolution of fraud complaints.

Banks must resolve:

• domestic fraudulent electronic banking transaction complaints within 45 days; and
• cross-border fraudulent transaction complaints within 60 days.

In addition, banks are required to establish internal governance mechanisms for periodic reporting of fraudulent electronic banking transactions to their Board of Directors or an appropriate Board Committee. Detailed records relating to fraud complaints, compensation claims, and their resolution must also be maintained for supervisory, audit, and inspection purposes.

Conclusion

The RBI's revised customer protection framework represents one of the most comprehensive overhauls of India's digital banking fraud regime in recent years. By expanding the definition of fraudulent transactions, strengthening customer rights, introducing compensation mechanisms, mandating faster complaint resolution, and imposing greater preventive obligations on banks, the Directions seek to create a more secure and consumer-centric digital banking ecosystem.

As digital transactions continue to grow in scale and sophistication, the revised framework reflects a clear regulatory shift from reactive dispute resolution to proactive fraud prevention and customer protection. The success of these reforms will, however, depend on effective implementation by banks and greater awareness among customers regarding their rights and reporting obligations under the new regime.

In a significant step towards strengthening the working capital ecosystem for Micro, Small and Medium Enterprises (MSMEs), the Ministry of Micro, Small and Medium Enterprises, through a notification dated June 30, 2026, has made it mandatory for all Central Public Sector Enterprises (CPSEs) to route invoices relating to procurement of goods and services from MSMEs through the Trade Receivables Discounting System (TReDS).

The move is aimed at addressing one of the most persistent challenges faced by MSMEs—delayed payments. By institutionalising invoice routing through RBI-authorised TReDS platforms, the Government seeks to improve payment transparency, facilitate faster access to finance, and strengthen liquidity for MSMEs without imposing any additional financing obligations on suppliers.

What is TReDS?

The Trade Receivables Discounting System (TReDS) is an electronic platform established under the regulatory framework of the Reserve Bank of India (RBI) to facilitate the financing of trade receivables of MSMEs.

Under the mechanism, once a buyer accepts an MSME invoice, banks and NBFCs competitively bid to discount the receivable. The MSME supplier can then choose to receive immediate payment by discounting the invoice, while the financier receives payment from the buyer on the due date.

Importantly, financing under TReDS is collateral-free and operates without recourse to the MSME seller, making it an efficient source of working capital.

Mandatory Routing of MSME Invoices

The notification requires every operating CPSE to route invoices relating to procurement from MSMEs through any TReDS platform authorised by the RBI.

However, the Government has clarified that routing invoices through TReDS does not make invoice discounting compulsory.

MSME suppliers continue to retain complete discretion regarding whether they wish to avail financing against the approved invoices. The platform merely creates an enabling framework through which suppliers may access competitive financing whenever required.

This distinction ensures that the notification promotes financial inclusion without interfering with commercial autonomy.

Compliance Obligations for CPSEs

Apart from routing invoices through TReDS, the notification introduces additional compliance requirements for Central Public Sector Enterprises.

CPSEs are now required to:

• Register themselves with at least one RBI-authorised TReDS platform;
• Route invoices relating to procurement from MSMEs through the platform;
• Disclose details of invoices routed and settled through TReDS; and
• Obtain a certificate from their statutory auditors confirming registration with a TReDS platform and compliance with the notification during the annual audit process.

These reporting requirements are intended to enhance transparency and improve monitoring of payment practices by public sector enterprises.

Addressing Delayed Payments to MSMEs

Delayed payments have long been recognised as one of the principal constraints affecting India's MSME sector. Extended payment cycles often result in liquidity shortages, increased borrowing costs and disruptions in business operations, particularly for smaller enterprises with limited access to formal credit.

The mandatory routing of invoices through TReDS seeks to mitigate these challenges by creating a transparent digital trail of invoices and enabling suppliers to convert approved receivables into immediate cash whenever necessary.

Since multiple banks and NBFCs participate on the platform, financing is offered through competitive bidding, allowing MSMEs to obtain working capital at market-driven interest rates without furnishing collateral.

Existing TReDS Ecosystem

India currently has five RBI-authorised TReDS platforms operating in the market:

• RXIL
• M1xchange
• Invoicemart
• C2treds
• DTX

These platforms provide a common digital marketplace connecting MSME suppliers, buyers and financiers, thereby facilitating efficient receivables financing across industries.

The latest notification is expected to significantly increase transaction volumes on these platforms by bringing all Central Public Sector Enterprises within the mandatory routing framework.

Conclusion

The mandatory adoption of TReDS by Central Public Sector Enterprises represents another important step in the Government's ongoing efforts to strengthen the MSME ecosystem. While the notification does not compel suppliers to discount their invoices, it ensures that every eligible invoice is routed through a transparent digital platform capable of providing immediate access to collateral-free financing.

By combining mandatory invoice routing with supplier choice, competitive financing and enhanced compliance requirements for CPSEs, the framework seeks to improve payment discipline, enhance liquidity for MSMEs and promote a more efficient receivables financing ecosystem.

As invoice financing continues to emerge as a critical tool for improving cash flows, the expanded use of TReDS is expected to play a significant role in reducing payment delays and strengthening the financial resilience of India's MSME sector.

In a significant ruling that provides much-needed clarity on limitation under the Arbitration and Conciliation Act, 1996, the Supreme Court has held that where the jurisdiction of the arbitral tribunal is validly invoked through an application under Section 33, the limitation period for filing a challenge under Section 34 begins only from the date on which the Section 33 application is disposed of. Importantly, the Court clarified that this consequence follows irrespective of whether the Section 33 application is ultimately allowed, dismissed, or even held to be not maintainable.

The judgment, delivered in National Highway Authority of India v. T. Younis & Anr., resolves an important procedural question that has frequently arisen in arbitration proceedings whether parties are required to simultaneously file a Section 34 challenge while a Section 33 application remains pending merely to safeguard limitation.

The Dispute Before the Court

The litigation arose from land acquisition proceedings under the National Highways Act, 1956, relating to a highway project in Bellary District, Karnataka. Following the remand of an earlier arbitral award, the Arbitrator passed a fresh award granting the landowners certain statutory benefits under Sections 23 and 34 of the Land Acquisition Act, 1894.

Aggrieved by the grant of these benefits, the National Highways Authority of India (NHAI) filed an application under Section 33(1)(a) of the Arbitration and Conciliation Act seeking correction of the award. Simultaneously, the landowners invoked Section 33(4) seeking an additional award.

The arbitral tribunal considered both applications together and dismissed them by a common order.

Following the dismissal of the Section 33 applications, NHAI instituted proceedings under Section 34 challenging the arbitral award.

Why the Section 34 Petition Was Rejected

The controversy arose because the Karnataka High Court held that NHAI's application under Section 33(1)(a) was itself not maintainable, observing that it substantially sought a review of the award rather than correction of an error.

Proceeding on that basis, the High Court concluded that such an application could not postpone the commencement of limitation under Section 34(3). Consequently, the challenge filed by NHAI was held to be barred by limitation.

The decision effectively meant that even though Section 33 proceedings had remained pending before the arbitral tribunal, limitation for challenging the award had continued to run.

The Supreme Court's Interpretation

The Supreme Court disagreed with the approach adopted by the High Court.

Examining the language of Section 34(3), the Court observed that the statute expressly provides that where a request under Section 33 has been made, the limitation period for filing an application under Section 34 shall commence from the date on which that request is disposed of.

The provision, the Court noted, does not distinguish between:

• applications that are ultimately allowed;
• applications that are dismissed; or
• applications later found to be not maintainable.

Once the arbitral tribunal's jurisdiction is formally invoked under Section 33 and the application is entertained, the statutory consequence automatically follows—limitation under Section 34 begins only after the Section 33 proceedings conclude.

According to the Court, importing additional conditions into Section 34(3) would amount to rewriting the legislative scheme.

Parties Need Not File Protective Section 34 Petitions

One of the most practical aspects of the judgment is the Court's recognition that parties should not be compelled to institute "protective" Section 34 proceedings merely because their Section 33 application remains pending.

The Court observed that once the arbitral tribunal is seized of a request under Section 33, parties are entitled to await its outcome before deciding whether a challenge under Section 34 is necessary.

Requiring parties to simultaneously pursue both remedies would unnecessarily burden litigants as well as courts and would undermine the procedural framework carefully created by the Arbitration Act.

The judgment therefore reinforces procedural certainty while preventing unnecessary multiplicity of proceedings.

Distinguishing Earlier Precedent

The respondents had relied upon the Supreme Court's earlier decision in State of Arunachal Pradesh v. Damani Construction Co. to argue that limitation could not be extended through an invalid Section 33 application.

The Supreme Court, however, distinguished that decision.

It observed that Damani Construction concerned a mere communication requesting reconsideration of the award rather than a formal application invoking the jurisdiction of the arbitral tribunal under Section 33.

Accordingly, the earlier judgment did not govern situations where a properly instituted Section 33 application had actually been entertained and adjudicated by the arbitral tribunal.

The Court also reaffirmed the principles laid down in Geojit Financial Services Ltd. v. Sandeep Gurav, which supported the view that disposal of a Section 33 application triggers commencement of limitation under Section 34.

Safeguard Against Abuse

While adopting a liberal interpretation of Section 34(3), the Supreme Court was careful to ensure that the provision is not misused.

The Court clarified that where a Section 33 application is found to be sham, frivolous, mala fide, or filed solely for the purpose of extending limitation, courts would be fully justified in imposing exemplary costs.

This observation balances procedural fairness with the need to discourage abuse of the arbitration process.

Thus, the judgment protects genuine litigants without creating opportunities for deliberate delay.

Final Decision

Allowing the appeal, the Supreme Court set aside the judgment of the Karnataka High Court and restored the order of the Principal District and Sessions Judge, Ballari, which had condoned the delay.

The Court directed that NHAI's application under Section 34 be decided on its merits in accordance with law.

Conclusion

The judgment provides valuable clarity on the interaction between Sections 33 and 34 of the Arbitration and Conciliation Act, 1996. By holding that limitation under Section 34 commences only upon disposal of a Section 33 application, irrespective of its eventual outcome, the Supreme Court has reinforced the plain language of the statute and eliminated uncertainty surrounding the computation of limitation.

The ruling also advances the objective of the Arbitration Act by ensuring procedural certainty, preventing unnecessary parallel proceedings, and allowing parties to meaningfully pursue correction or clarification of arbitral awards before approaching the courts. At the same time, by cautioning against frivolous or mala fide Section 33 applications, the Court has ensured that the framework cannot be exploited to artificially extend limitation.

The decision is therefore likely to become an important precedent governing limitation in arbitral challenges and will provide welcome guidance to litigants, arbitral tribunals, and courts dealing with post-award proceedings.

The Reserve Bank of India (RBI) has significantly revamped the regulatory framework governing lending to Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) by issuing a series of amendment directions across multiple prudential regulations. The reforms collectively establish the first dedicated regulatory architecture for bank financing of REITs and InvITs, reflecting the growing importance of these investment vehicles in India's infrastructure and real estate financing ecosystem.

The changes have been introduced through the following Amendment Directions:

• Commercial Banks – Credit Facilities (Third Amendment) Directions, 2026;
• Small Finance Banks – Credit Facilities (Second Amendment) Directions, 2026;
• All India Financial Institutions – Credit Facilities Amendment Directions, 2026;
• Commercial Banks – Concentration Risk Management (Third Amendment) Directions, 2026; and
• Commercial Banks – Prudential Norms on Capital Adequacy (Eighth Amendment) Directions, 2026.

Collectively, these amendments seek to strike a balance between facilitating greater access to institutional credit for REITs and InvITs while ensuring robust prudential safeguards against excessive leverage and concentration risk.

A Dedicated Lending Framework for REITs and InvITs

One of the most significant aspects of the Amendment Directions is the formal recognition of financing to REITs and InvITs as a separate category of lending. Until now, banks largely evaluated such financing under conventional corporate lending norms without a framework specifically tailored to the unique characteristics of trust-based investment structures.

Recognising that REITs and InvITs operate on business models fundamentally different from traditional corporate borrowers, the RBI has now mandated regulated entities to formulate Board-approved lending policies specifically governing financing to these entities.

These policies are required to comprehensively address:

• appraisal and credit evaluation standards;
• underwriting norms;
• debt service coverage ratio (DSCR) requirements;
• internal exposure limits;
• post-disbursement monitoring mechanisms; and
• ongoing credit surveillance.

Importantly, lenders have also been directed to independently assess the valuation methodologies adopted by REITs and InvITs. Since the valuation of these trusts is largely dependent upon projected cash flows generated by underlying operational assets, banks can no longer rely solely upon valuations furnished by borrowers and must undertake their own independent assessment of assumptions relating to revenue generation and asset performance.

Eligibility Restricted to Mature Listed Trusts

The RBI has adopted a conservative approach by restricting financing only to listed REITs and InvITs regulated by the Securities and Exchange Board of India (SEBI).

Further, at least 80% of the value of the assets held by the trust must comprise completed and income-generating assets that have generated positive operational cash flows for a minimum period of one year.

This requirement reflects the regulator's preference for financing mature operational assets rather than speculative or under-construction projects.

Banks are additionally required to examine the governing trust documents to ensure that they expressly permit the proposed borrowing and do not impose restrictions on enforcement of security interests or other lender rights.

Restrictions on End Use of Borrowings

The Amendment Directions introduce important safeguards regarding the utilisation of borrowed funds.

Borrowings cannot be deployed towards Special Purpose Vehicles (SPVs) that:

• have existing borrowings from regulated entities; and
• are already facing financial stress under the RBI's stressed asset framework.

However, refinancing of existing SPV borrowings is permitted where such facilities relate to completed and operational projects.

In the case of REITs, refinancing is permitted only after the underlying project has received the requisite Completion Certificate, Occupancy Certificate or equivalent statutory approvals.

These restrictions ensure that the framework supports productive refinancing while preventing fresh credit from being diverted towards stressed assets.

New Discipline for Loan Repayment Structures

The RBI has also prescribed specific norms governing repayment structures.

The Directions discourage financing arrangements involving bullet repayments or ballooning principal repayments, where a substantial portion of the loan becomes repayable only towards the end of the tenure.

Instead, repayment schedules are expected to broadly correspond with the projected cash flows generated by the underlying assets.

The objective is to ensure that debt servicing remains sustainable throughout the life of the facility rather than depending upon refinancing or asset monetisation at maturity.

Interestingly, this restriction does not apply to investments made by banks in bonds, debentures or commercial paper issued by REITs or InvITs.

Specialised Acquisition Finance Framework

Among the most notable reforms is the introduction of a dedicated acquisition finance framework under the All India Financial Institutions – Credit Facilities Amendment Directions, 2026.

The framework permits All India Financial Institutions (AIFIs) to finance InvITs and eligible holding structures for acquiring control of infrastructure assets.

However, such financing remains subject to detailed prudential safeguards relating to:

• eligibility of borrowers;
• independent valuation of target assets;
• leverage thresholds;
• financing limits;
• security creation; and
• consolidated credit assessment.

Credit evaluation is required to be undertaken on a pro-forma consolidated basis, thereby ensuring that lenders assess the financial position of the acquisition structure as a whole.

Further, acquisition finance cannot exceed 75% of the independently assessed acquisition value, thereby requiring substantial equity participation by the acquiring entity.

The framework also permits refinancing of acquisition finance following completion of the transaction, subject to continued compliance with applicable prudential norms.

Strengthened Prudential Safeguards

The Amendment Directions introduce multiple safeguards aimed at ensuring prudent leverage and effective risk management.

Lenders are required to independently assess debt servicing capacity and ensure compliance with leverage thresholds prescribed by SEBI or such lower limits as may be prescribed internally.

Additionally, the aggregate exposure of all banks to a REIT or InvIT, together with its underlying SPVs and holding companies, cannot exceed 49% of the value of its assets, unless a lower internal limit has been adopted.

The value of assets for this purpose must be determined strictly in accordance with SEBI's valuation framework.

These safeguards seek to prevent excessive leverage while maintaining consistency with the regulatory framework governing REITs and InvITs.

Comprehensive Security Framework

The RBI has also strengthened the security requirements applicable to financing extended to REITs and InvITs.

All lending must be fully secured through appropriate security interests over underlying assets, including:

• immovable properties;
• receivables;
• operational cash flows;
• equity interests in SPVs; and
• other project-related assets.

In addition to conventional security creation, lenders are expected to incorporate contractual protections such as:

• escrow arrangements;
• cash-flow ring-fencing;
• step-in rights; and
• restrictions on creation of additional indebtedness.

These measures are intended to enhance lender protection while preserving the financial stability of the underlying trust structures.

Changes to Concentration Risk and Capital Adequacy Norms

The RBI has simultaneously amended its prudential framework governing concentration risk and capital adequacy.

Banks are now required to prescribe internal exposure limits for the real estate sector, while aggregate exposure to REITs cannot exceed 10% of the bank's eligible capital base.

Further, exposures to REITs have been classified as Commercial Real Estate (CRE) exposures for capital adequacy purposes and will therefore attract the applicable CRE risk weights.

These amendments ensure that increased financing of REITs occurs within a prudentially regulated capital framework.

Conclusion

The RBI's comprehensive lending framework marks an important milestone in the evolution of India's REIT and InvIT ecosystem. By recognising financing to these investment vehicles as a specialised category of lending, the regulator has introduced greater clarity and predictability for banks, financial institutions and market participants.

At the same time, the framework incorporates extensive safeguards relating to leverage, valuation, refinancing, acquisition finance, security creation and concentration risk, ensuring that increased access to institutional credit does not compromise financial stability.

As REITs and InvITs continue to play an increasingly important role in financing commercial real estate and infrastructure assets, the new framework is expected to strengthen lender confidence, facilitate long-term capital formation and contribute significantly to the continued development of India's alternative investment market.

In a landmark judgment with far-reaching implications for India’s gaming industry, the Supreme Court has upheld the constitutional validity of the Goods and Services Tax (GST) framework applicable to online gaming, fantasy sports, betting, gambling and casino transactions. The decision settles one of the most significant tax disputes in recent years and confirms the Government’s position that GST is payable on the full amount staked by participants rather than merely on the platform fee or commission retained by gaming operators.

The ruling came in a batch of appeals and connected matters led by Directorate General of Goods and Services Tax Intelligence (HQS) v. Gameskraft Technologies Private Limited, where the Court overturned the Karnataka High Court’s decision that had earlier quashed substantial GST demands raised against gaming companies.

The judgment is expected to have a profound impact on the online gaming ecosystem, particularly on business models that were historically structured around taxation of platform commissions rather than the total value of player stakes.

Background of the Dispute

The controversy originated from GST investigations initiated against several online gaming operators, fantasy sports platforms, poker operators and casino businesses. Tax authorities alleged that these entities had incorrectly classified their activities and had discharged GST only on the platform fee retained by them, instead of paying tax on the entire amount deposited and staked by players.

One of the most prominent cases involved Gameskraft Technologies Private Limited, against whom the Directorate General of GST Intelligence issued a show cause notice alleging significant short-payment of GST. Similar disputes arose across the online gaming industry, leading to multiple writ petitions and constitutional challenges before various courts.

In 2023, the Karnataka High Court ruled in favour of Gameskraft and quashed the GST demand notices, holding that the transactions could not be treated in the manner suggested by the tax authorities. The Revenue challenged this decision before the Supreme Court, resulting in a comprehensive examination of the GST treatment of online gaming and related activities.

The Central Question Before the Court

The primary issue before the Supreme Court was whether online gaming operators were liable to pay GST only on the platform fee earned by them or on the entire amount staked by participants.

The gaming companies argued that they merely facilitated interactions between players and retained a small platform fee for providing technological infrastructure. According to them, the stake amount belonged to the players and therefore should not form part of the taxable value.

Several operators also argued that games such as fantasy sports, rummy and poker are predominantly games of skill and should therefore not be equated with betting or gambling for GST purposes.

The Court, however, rejected these arguments.

Skill Versus Chance: The Court’s Approach

One of the most significant aspects of the judgment is the Court’s treatment of the long-standing distinction between games of skill and games of chance.

Traditionally, Indian courts have recognised that games involving substantial skill may be treated differently from gambling activities under various regulatory statutes. However, the Supreme Court clarified that this distinction does not determine GST liability.

According to the Court, the relevant consideration for GST purposes is whether participants stake money or money’s worth on uncertain future outcomes.

The Court observed that betting fundamentally involves placing stakes on uncertain outcomes, regardless of whether skill plays a role in influencing the result. Consequently, even games that require skill may acquire the character of betting and gambling when participation involves staking money with the possibility of winning or losing based on uncertain outcomes.

The Court therefore held that online gaming activities involving monetary stakes fall within the GST framework applicable to betting and gambling.

Actionable Claims as Taxable Supplies

A key pillar of the judgment is the Court’s analysis of actionable claims.

The Court observed that gaming platforms create a structured commercial ecosystem where participants acquire contingent rights that depend upon uncertain future events. These contingent rights constitute actionable claims under Indian law.

Importantly, the Court held that GST is not imposed on the activity of betting or gambling itself. Rather, the levy is imposed on the supply of actionable claims generated through such activities.

Since actionable claims arising from betting and gambling are specifically included within the scope of taxable supplies under the GST framework, the Court concluded that the transactions are validly subject to GST.

This reasoning reinforces the legislative framework introduced through amendments to the GST laws and valuation provisions governing online gaming and casino activities.

Online Gaming Platforms Are Not Mere Intermediaries

The Court also rejected the argument that gaming platforms merely act as intermediaries facilitating transactions between players.

According to the Court, gaming operators actively create, manage and administer the gaming ecosystem. They establish the rules of participation, maintain pooled stake structures, determine prize mechanisms and facilitate the overall gaming experience.

As a result, the operators cannot be viewed as passive facilitators.

The Court held that the platforms themselves supply actionable claims arising from organised gaming activities and therefore become liable to GST on the entire transaction value associated with such supplies.

This finding significantly strengthens the tax authorities’ position and removes the basis on which many gaming companies had sought to limit GST liability to platform commissions.

Constitutional Challenge Rejected

Several gaming operators and industry associations also challenged the constitutional validity of the GST framework itself.

The petitioners argued that the levy was excessive, discriminatory and beyond the scope of Parliament’s taxation powers. They also challenged the valuation provisions that require GST to be computed on the full stake amount.

The Supreme Court rejected these challenges.

The Court held that the GST framework is fully supported by the statutory provisions governing taxable supplies and valuation under the Central Goods and Services Tax Act, 2017. It further observed that a higher tax burden or reduced profitability cannot be a ground for declaring a fiscal statute unconstitutional.

The judgment reiterates the settled principle that courts generally accord substantial deference to legislative choices in matters of taxation unless a clear constitutional violation is established.

Industry Implications

The ruling represents a watershed moment for India’s online gaming industry.

By confirming that GST is payable on the full amount staked by players rather than merely on platform commissions, the decision substantially increases the tax burden on gaming operators. The judgment also provides long-awaited certainty regarding the legal framework governing online gaming taxation.

Going forward, gaming companies may need to reassess their pricing structures, business models and compliance strategies in light of the Court’s interpretation of the GST regime.

Conclusion

The Supreme Court’s decision conclusively settles the long-running debate on GST liability in the online gaming sector. By upholding the constitutional validity of the GST framework and confirming that actionable claims arising from betting, gambling, fantasy sports, poker and similar gaming activities are taxable on the full stake value, the Court has endorsed the Government’s approach to taxation of the gaming industry.

The ruling is likely to reshape the economics of the sector and will serve as a defining precedent for future disputes involving digital gaming, betting and casino transactions under India’s GST regime.

In a significant ruling reinforcing the time-bound nature of insolvency proceedings, the Supreme Court has clarified that statutory limitation periods prescribed under Section 62 of the Insolvency and Bankruptcy Code, 2016 (IBC) cannot be circumvented through delayed re-filing of defective appeals. In CA Ramchandra Dallaram Choudhary v. Adani Infrastructure and Developers Private Limited, the Court dismissed an appeal as time-barred and held that once the statutory timelines under the IBC and the permissible period for curing defects expire, the right to appeal itself stands extinguished.

The judgment is important not only for insolvency professionals and liquidators but also for all litigants appearing before the Supreme Court under the IBC. It reiterates the Court’s consistent approach that strict adherence to timelines is fundamental to the insolvency framework and that procedural lapses cannot be used to defeat the legislative objective of speedy resolution.

Background of the Dispute

The appeal arose from a judgment delivered by the National Company Law Appellate Tribunal (NCLAT) on December 8, 2025. Aggrieved by the decision, the liquidator of a corporate debtor sought to challenge the NCLAT order before the Supreme Court under Section 62 of the IBC.

The appeal was initially presented before the Supreme Court on January 29, 2026. Although the filing fell beyond the ordinary limitation period of forty-five days prescribed under Section 62(1), it was still within the additional fifteen-day grace period contemplated under Section 62(2), which allows delay to be condoned upon sufficient cause being shown.

However, the appeal was not in proper form. The Registry pointed out defects and reported a delay of seven days in filing. While the appellant eventually cured the defects, the appeal was re-filed after an additional delay of eighty-two days. Separate applications were therefore filed seeking condonation of both the filing delay and the re-filing delay.

The appellant argued that the delay occurred due to an internal oversight in the office of the liquidator and contended that courts generally adopt a more liberal approach while dealing with delays in re-filing as opposed to delays in filing.

The Core Legal Issue

The principal question before the Supreme Court was whether a litigant can preserve limitation by filing a defective appeal within the statutory period and thereafter cure defects after a substantial delay.

The issue assumed particular significance because insolvency proceedings under the IBC are governed by strict statutory timelines intended to facilitate expeditious resolution of disputes.

The appellant relied upon an earlier decision involving the same parties where the Supreme Court had condoned a delay in re-filing under Section 61 of the IBC. It was argued that the same liberal approach should be adopted in the present case.

Supreme Court's Analysis

The Court began by examining the scheme of Section 62 of the IBC.

Under Section 62(1), an appeal to the Supreme Court must be filed within forty-five days from the date of the NCLAT order. Section 62(2) empowers the Court to condone delay, but only up to a maximum of fifteen additional days if sufficient cause is shown.

Accordingly, the maximum period available for instituting an appeal under Section 62 is sixty days.

The Court observed that this outer limit is mandatory and jurisdictional in nature. Once the sixty-day period expires, the Court has no authority to condone any further delay.

The Court then examined the provisions of the Supreme Court Rules, 2013 relating to defective filings. Under the Rules, defects may ordinarily be cured within twenty-eight days of notification by the Registry. A litigant who fails to remove defects within this period may seek condonation of delay in re-filing.

However, the Court clarified that these procedural rules cannot override the statutory framework prescribed by Parliament under the IBC.

Defective Appeals Cannot Preserve Limitation Indefinitely

A key aspect of the judgment is the Court’s observation that a defective appeal cannot be used as a mechanism to indefinitely preserve limitation.

The Court emphasised that an appeal must be brought into a form capable of being acted upon within the time permitted by law. Merely filing a defective appeal within the limitation period does not grant a litigant unlimited time to rectify deficiencies.

Permitting such an approach would undermine the very objective of the IBC by allowing parties to bypass statutory timelines through procedural manoeuvring.

The Court cautioned that if litigants were permitted to file incomplete or defective appeals simply to save limitation and thereafter cure defects at their convenience, the discipline of timelines embedded within the insolvency framework would be seriously compromised.

Section 62 Is a Complete Code

The Supreme Court further held that Section 62 constitutes a complete code governing appeals from the NCLAT to the Supreme Court.

While the Supreme Court Rules provide procedural mechanisms for dealing with defective filings, they remain subordinate legislation and cannot be interpreted in a manner that enlarges or modifies the limitation period prescribed by the parent statute.

According to the Court, once the sixty-day period under Section 62 and the permissible period for curing defects are exhausted, the right to appeal itself ceases to exist.

In such circumstances, the Court lacks jurisdiction to entertain the appeal, irrespective of the reasons offered for the delay.

Refusal to Invoke Article 142

The appellant also sought relaxation of the limitation period through the Court’s extraordinary powers under Article 142 of the Constitution.

The Court declined this request, observing that insolvency legislation does not provide any special limitation regime for liquidators, resolution professionals, or other insolvency stakeholders.

The Court reiterated that it cannot create exceptions that Parliament itself has not provided.

This aspect of the judgment reinforces the principle that equitable considerations cannot override express statutory mandates under the IBC.

Conclusion

The Supreme Court’s decision serves as a powerful reaffirmation of the time-bound framework that lies at the heart of the Insolvency and Bankruptcy Code.

By holding that delayed re-filing of defective appeals cannot extend statutory limitation periods, the Court has sent a clear message that procedural compliance is not a mere technicality in insolvency proceedings. The ruling underscores that litigants must not only file appeals within the prescribed period but must also ensure that such appeals are brought into a proper and maintainable form within the time allowed by law.

For insolvency professionals, creditors, corporate debtors, and legal practitioners, the judgment highlights the importance of meticulous compliance with procedural requirements. More broadly, it reinforces the legislative objective of ensuring certainty, finality, and speed in insolvency resolution principles that remain central to the success of India's insolvency framework.

The Insolvency and Bankruptcy Board of India (IBBI) has further strengthened India's personal guarantor insolvency regime through a fresh set of amendments notified on June 1, 2026. The amendments, made to the Insolvency Resolution Process for Personal Guarantors to Corporate Debtors Regulations, 2019 and the Bankruptcy Process for Personal Guarantors to Corporate Debtors Regulations, 2019, are aimed at improving transparency, strengthening creditor protection, and facilitating better coordination between insolvency proceedings involving corporate debtors and their personal guarantors.

The amendments form part of a broader effort by the IBBI to continuously refine the personal guarantor framework under the Insolvency and Bankruptcy Code, 2016 (IBC). Over the last two years, the Board has introduced several reforms intended to improve efficiency, reduce procedural bottlenecks, and enhance monitoring of personal guarantor proceedings.

The latest amendments are particularly significant because they introduce comprehensive asset disclosure requirements and operationalise the newly inserted statutory framework relating to the transfer of assets between personal guarantor and corporate debtor insolvency proceedings.

Evolution of the Personal Guarantor Framework

The personal guarantor insolvency regime has undergone substantial changes since its introduction.

In January 2024, the IBBI removed restrictions that prevented a professional involved in the insolvency process of a corporate debtor from simultaneously acting in proceedings involving the related personal guarantor. This was intended to improve continuity and efficiency in interconnected insolvency matters.

Subsequently, amendments introduced in May 2025 required resolution professionals to inform the Adjudicating Authority where a personal guarantor failed to submit a repayment plan despite creditor approval.

In March 2026, the Board further strengthened the framework by introducing electronic filing requirements for monitoring personal guarantor insolvency proceedings.

The June 2026 amendments build upon these earlier reforms and represent another step towards creating a more comprehensive and transparent insolvency framework.

Comprehensive Asset Disclosure Becomes Mandatory

One of the most significant changes introduced by the amendments is the insertion of Regulation 6A, which requires every applicant initiating insolvency proceedings under Sections 94 or 95 of the IBC to submit a complete and truthful statement of assets supported by documentary evidence.

The disclosure obligation is remarkably broad and reflects the IBBI's intent to ensure complete transparency regarding the financial position of personal guarantors.

The statement of assets must include details relating to:

• Cash and bank balances;
• Business interests and commercial assets;
• Domestic and overseas investments;
• Immovable properties;
• Provident fund and retirement assets;
• Intellectual property rights and other intangible assets;
• Valuable movable assets;
• Agricultural assets and livestock;
• Receivables and advances;
• Claims and contingent assets;
• Employee stock ownership plans (ESOPs); and
• Digital assets, including cryptocurrencies and virtual digital assets.

Importantly, the obligation extends beyond assets held directly by the personal guarantor.

The amended regulation specifically requires disclosure of assets held indirectly through beneficial ownership arrangements, fiduciary relationships, joint ownership structures, trusts, or any other arrangement where the individual exercises control or derives economic benefit.

This represents a significant expansion of disclosure obligations and is expected to make it more difficult for debtors to shield assets through complex ownership structures.

Recognition of Digital Assets

A particularly noteworthy feature of the amendment is the express inclusion of cryptocurrencies and virtual digital assets within the asset disclosure framework.

As digital assets increasingly become part of personal wealth portfolios, their omission from insolvency disclosures had the potential to create significant information gaps.

The express requirement to disclose such assets demonstrates the regulator's recognition of evolving asset classes and its commitment to ensuring that insolvency disclosures remain comprehensive and relevant in the digital economy.

New Framework for Transfer of Assets

Another major development is the introduction of Regulations 11A and 20A, which operationalise Section 28A of the Insolvency and Bankruptcy Code.

The provisions establish a formal mechanism for facilitating transfers of assets where insolvency proceedings involving a personal guarantor and the related corporate debtor intersect.

Under the new framework, the resolution professional or bankruptcy trustee handling the personal guarantor process must coordinate with the resolution professional of the relevant corporate debtor regarding any proposed transfer of assets.

Before facilitating such transfers, approval must be obtained from the creditors of the personal guarantor.

Where such approval is granted, the proposed transfer must be appropriately disclosed in the statutory reports submitted under the IBC.

This framework seeks to improve coordination between interconnected insolvency proceedings and ensure that asset transfers are undertaken transparently and with creditor oversight.

Strengthening Creditor Oversight

A common theme running through the amendments is the enhancement of creditor participation and oversight.

Whether in relation to asset transfers, repayment plans, or disclosure obligations, the amendments consistently reinforce the role of creditors in supervising the insolvency process.

The requirement for creditor approval before facilitating transfers of assets reflects the broader objective of ensuring that actions affecting the insolvency estate remain subject to collective creditor scrutiny.

Such measures are likely to enhance confidence in the personal guarantor framework and improve recoveries for creditors.

Administrative Streamlining and Regulatory Updates

The amendments also introduce several procedural and administrative changes.

References to prescribed forms embedded within the regulations have been removed, with the forms now being notified separately through IBBI circulars. This approach allows the Board to update formats more efficiently without requiring formal amendments to the regulations themselves.

Additional references have also been inserted to align the regulations with recently introduced provisions of the Insolvency and Bankruptcy Code, ensuring greater consistency between the parent legislation and subordinate regulations.

Conclusion

The June 2026 amendments represent a significant strengthening of India's personal guarantor insolvency framework. By mandating comprehensive asset disclosures, expressly covering digital assets and beneficial ownership structures, and introducing a structured mechanism for asset transfers between interconnected insolvency proceedings, the IBBI has sought to enhance transparency, creditor protection, and procedural efficiency.

The reforms also demonstrate the continuing evolution of the insolvency framework towards addressing increasingly sophisticated financial arrangements and ownership structures. For creditors, insolvency professionals, and personal guarantors alike, the amendments underscore the growing emphasis on full disclosure, accountability, and coordination within insolvency proceedings.

As personal guarantor insolvency continues to play a crucial role in India's credit recovery ecosystem, these amendments are likely to strengthen confidence in the framework and contribute to more effective resolution outcomes under the Insolvency and Bankruptcy Code.

The Securities and Exchange Board of India (SEBI), through its Circular dated May 15, 2026, has provided important clarity on the permissible utilisation of borrowings by Infrastructure Investment Trusts (InvITs) where consolidated borrowings exceed 49% of the value of InvIT assets. The Circular operationalises the amendments introduced to the SEBI (Infrastructure Investment Trusts) Regulations, 2014 on April 17, 2026, and marks another significant step towards enhancing financial flexibility within India's infrastructure investment ecosystem.

The clarification comes at a time when InvITs have emerged as one of the most important vehicles for infrastructure financing and asset monetisation. As these structures continue to mature and attract institutional capital, the ability to efficiently deploy debt assumes critical importance for maintaining operational performance, funding growth, and supporting long-term infrastructure development.

Regulatory Background

Under the existing InvIT framework, infrastructure investment trusts are permitted to raise borrowings and deferred payments subject to prescribed leverage limits. However, where consolidated borrowings exceed 49% of the value of InvIT assets, the utilisation of such borrowings is restricted to purposes specifically permitted by SEBI.

Recognising the evolving financing requirements of infrastructure assets, SEBI amended Regulation 20(3)(b)(ii) of the InvIT Regulations in April 2026 to expand the scope of permissible utilisation of borrowings beyond the prescribed threshold. The latest Circular provides the much-needed operational clarity regarding the categories of expenditure that qualify under the expanded framework.

The clarification is expected to assist InvITs, sponsors, investors, lenders, and project operators in structuring financing arrangements with greater certainty.

Capital Expenditure for Asset Enhancement Recognised

One of the most significant aspects of the Circular is the explicit recognition of capital expenditure aimed at enhancing asset performance or augmenting capacity as a permissible use of borrowings above the 49% leverage threshold.

Infrastructure assets often require substantial investments after becoming operational. These investments may be necessary to improve efficiency, increase capacity, introduce technological upgrades, strengthen operational resilience, or enhance service quality.

By recognising such capital expenditure as a permissible use of debt, SEBI has acknowledged the practical realities of infrastructure asset management and the need for continuous investment throughout an asset's lifecycle.

This clarification is particularly relevant for sectors such as roads, power transmission, renewable energy, telecommunications, and logistics, where periodic upgrades and expansion projects are essential to maintain competitiveness and operational effectiveness.

Major Maintenance Expenditure for Road Assets

The Circular also provides specific relief for road sector InvITs by recognising major maintenance expenditure as a permissible category for utilisation of borrowings beyond the prescribed threshold.

Importantly, SEBI distinguishes major maintenance expenditure from routine maintenance activities.

For such expenditure to qualify, it must:

• Relate to obligations specified under the relevant concession agreement; and
• Constitute non-routine maintenance expenditure.

This distinction ensures that the borrowing flexibility is reserved for substantial maintenance requirements that preserve or restore long-term asset value rather than day-to-day operational expenses.

Road infrastructure assets often require periodic major maintenance activities such as resurfacing, structural strengthening, rehabilitation works, and large-scale repairs to comply with concession obligations and maintain service standards. Such activities typically involve significant capital outlays and can materially impact cash flows.

By permitting debt utilisation for these expenditures, SEBI has provided InvITs with an important financing tool for managing lifecycle maintenance obligations.

The Circular further clarifies that the relevant projects are those classified within the “Roads and Bridges” infrastructure sub-sector identified under the Ministry of Finance notification dated September 19, 2025, including any subsequent amendments.

Refinancing of Existing Debt Permitted

Another noteworthy aspect of the Circular is the recognition of refinancing as a permissible use of fresh borrowings above the leverage threshold.

The clarification applies to refinancing undertaken by:

• The InvIT itself;
• A Special Purpose Vehicle (SPV); or
• A Holding Company (HoldCo).

However, SEBI has imposed important safeguards to ensure disciplined refinancing practices.

The Circular specifies that:

• The original debt being refinanced must have been utilised for purposes permissible under the InvIT Regulations; and
• Only the principal amount of the debt may be refinanced.

Significantly, accumulated interest, penalties, fees, charges, or other ancillary financing costs cannot be refinanced under this framework.

This restriction reflects SEBI's intent to prevent excessive leverage accumulation and ensure that refinancing remains focused on prudent debt management rather than perpetual rollover of financing costs.

Impact on the InvIT Ecosystem

The Circular is likely to have a positive impact on India's growing InvIT market.

Infrastructure assets typically involve long gestation periods, substantial capital requirements, and complex financing structures. As InvITs continue to acquire mature operational assets, flexibility in managing debt becomes increasingly important.

The recognition of capacity-enhancing capital expenditure, major maintenance obligations, and refinancing activities provides InvITs with additional tools to optimise their capital structures and preserve asset value.

The clarification may also improve lender confidence by providing greater regulatory certainty regarding permissible debt utilisation, thereby facilitating access to financing on competitive terms.

For investors, the framework balances financial flexibility with prudential safeguards, ensuring that borrowings are directed towards value-accretive activities while maintaining discipline in leverage management.

Conclusion

SEBI's latest Circular represents a pragmatic and commercially significant development for the InvIT sector. By expanding and clarifying the permissible utilisation of borrowings beyond the 49% leverage threshold, the regulator has aligned the framework more closely with the operational realities of infrastructure ownership and management.

The recognition of capital expenditure for performance enhancement, major maintenance obligations for road assets, and structured refinancing mechanisms reflects an evolving regulatory approach that supports infrastructure growth while preserving financial discipline.

As InvITs continue to play an increasingly important role in India's infrastructure financing and asset monetisation strategy, the enhanced borrowing flexibility introduced by SEBI is likely to strengthen the sector's ability to attract long-term capital, manage infrastructure assets efficiently, and contribute to the country's broader development objectives.

In a significant enforcement move, the Central Consumer Protection Authority (CCPA) has imposed penalties on PhysicsWallah Limited and McAfee for deploying dark patterns on their digital platforms. The Ministry of Consumer Affairs, Food & Public Distribution has stated that PhysicsWallah has been fined ₹5 lakh, while McAfee has been penalised ₹1 lakh, for practices found to be contrary to the Consumer Protection Act, 2019, the Consumer Protection (E-Commerce) Rules, 2020, and the Guidelines for Prevention and Regulation of Dark Patterns, 2023.

The action reflects the growing seriousness with which Indian regulators are treating deceptive digital design. What was once viewed as a matter of user interface convenience is now being treated as a consumer rights issue, with direct legal and financial consequences for platforms that manipulate consumer choice.

The Regulatory Background

India’s fight against dark patterns has been evolving over the last few years. In June 2023, the Advertising Standards Council of India issued guidelines addressing deceptive online design patterns in advertising. These were followed by the CCPA’s Guidelines for Prevention and Regulation of Dark Patterns, 2023, which brought a formal regulatory framework into place.

The CCPA guidelines identified ten core dark patterns, including false urgency, basket sneaking, confirm shaming, forced action, subscription trap, interface interference, bait and switch, drip pricing, disguised advertisement, and nagging. Later, three more dark patterns were added: trick questions, SaaS billing, and rogue malware.

The CCPA also issued an advisory urging e-commerce platforms to conduct self-audits and eliminate dark patterns within a specified timeframe. The message was clear: misleading design is no longer a minor compliance lapse; it is a consumer protection violation.

The Case Against PhysicsWallah

The proceeding against PhysicsWallah arose from a suo motu action by the CCPA concerning the design of its official platform and mobile application. The Authority found that the platform used dark patterns in a manner that affected consumer decision-making, created unfair trade practices, and misled users.

Three design practices were specifically examined.

First, the CCPA found basket sneaking in the form of a pre-selected ₹10 donation to the PW Foundation during checkout. Users were required to actively remove the donation if they did not wish to contribute.

Second, the Authority found elements of confirm shaming in the messaging surrounding the donation. The platform used emotionally persuasive language linked to educational support, healthcare assistance, financial aid, and charitable activities, which had the effect of discouraging users from opting out.

Third, the CCPA identified forced action in the requirement that users share personal information before accessing courses described as free. It also noted that users were required to sign up or log in even where the content was advertised as freely available.

PhysicsWallah argued that the donation was optional, clearly visible, and fully reversible before payment was completed. It also contended that basic user information was collected for legitimate educational and operational purposes, and that no free or paid course was made conditional upon donating to the foundation.

The CCPA, however, concluded that the manner in which the platform was designed and presented to users violated the consumer protection framework and amounted to an unfair trade practice. It held that the conduct fell foul of the provisions relating to misleading advertisements and dark patterns, and therefore warranted penalty.

The Case Against McAfee

The proceeding against McAfee arose from its subscription renewal interface. The complaint alleged that the renewal page presented consumers with only two visible choices: “Renew Now” and “Accept Risk.” According to the CCPA, this design created pressure and fear, suggesting that failure to renew would expose the user to cybersecurity threats.

The Authority took issue with the absence of a neutral opt-out mechanism and found that the wording and presentation of the interface amounted to a manipulative design. It held that the interface was not merely persuasive, but coercive in its effect.

McAfee responded that the phrase “Accept Risk” was only intended to indicate the consequence of an expired cybersecurity subscription and did not amount to a misleading representation. The company also stated that consumers could dismiss the page through the “X” button and that no complaints had been received. McAfee further informed the Authority that it had subsequently modified the interface and introduced neutral options such as “Skip” and “No Thanks.”

The CCPA, however, made it clear that later corrective action does not erase liability for the earlier use of an unfair interface. It held that the renewal flow created an exaggerated impression of danger and necessity, and therefore constituted both a misleading advertisement and a set of dark patterns, including confirm shaming, interface interference, trick question, and forced action.

Why This Order Matters

This enforcement action is important for several reasons.

It confirms that Indian regulators are now willing to look beyond traditional advertising claims and examine the actual design architecture of digital platforms. A platform may not say anything false in words, yet still mislead users through structure, prompts, default settings, and emotional nudges.

It also demonstrates that consumer protection law in India is moving toward a more modern understanding of digital harm. The issue is no longer limited to false statements alone; it now includes manipulative design choices that distort user autonomy.

For education platforms, subscription-based services, fintech apps, e-commerce platforms, and software providers, the message is straightforward: consent must be real, not engineered. A user should be able to make a choice freely, without being nudged, shamed, cornered, or manipulated into acting against their interest.

Conclusion

The penalties imposed on PhysicsWallah and McAfee mark a clear warning to digital businesses that dark patterns will not be tolerated. The CCPA’s action shows that platforms must now ensure that their design, checkout flows, subscription renewals, and user prompts comply not only with commercial expectations but also with consumer protection law.

As India’s digital economy expands, interface design will increasingly be judged not just by how effectively it converts users, but by whether it respects their freedom of choice. This order is a strong reminder that in the digital marketplace, fairness is no longer optional.

In a significant development at the intersection of corporate social responsibility and social finance, the Ministry of Corporate Affairs (MCA) has introduced amendments to the Companies Act, 2013 and the Companies (Corporate Social Responsibility Policy) Rules, 2014, permitting companies to undertake Corporate Social Responsibility (CSR) activities through subscription to Zero Coupon Zero Principal (ZCZP) Instruments listed on Social Stock Exchanges.

The reforms, announced through a press release dated May 29, 2026, seek to provide companies with an additional avenue for deploying CSR funds while simultaneously facilitating transparent and regulated fundraising for Not-for-Profit Organisations (NPOs). The amendments are expected to strengthen India's evolving social finance ecosystem and further the objective of channeling private capital towards public welfare initiatives.

Background: Social Stock Exchanges and ZCZP Instruments

India's Social Stock Exchange (SSE) framework was introduced to enable eligible Not-for-Profit Organisations to raise funds from investors and donors through a regulated market-based mechanism.

One of the key instruments available under the SSE framework is the Zero Coupon Zero Principal (ZCZP) Instrument, a unique financial instrument that does not provide any financial return or repayment of principal to subscribers. Instead, it functions as a mechanism for directing funds towards social impact projects undertaken by eligible NPOs.

The concept is designed to bring greater transparency, accountability, and disclosure standards to philanthropic and social sector funding by leveraging the infrastructure and governance mechanisms of recognised stock exchanges.

The latest MCA amendments represent an important step in integrating the CSR framework under the Companies Act with the Social Stock Exchange ecosystem established by the Securities and Exchange Board of India (SEBI).

Amendment to Schedule VII of the Companies Act, 2013

The most notable legislative change is the amendment to Schedule VII of the Companies Act, 2013, which specifies the activities that qualify as CSR activities.

A new entry has been inserted under Schedule VII permitting:

"Subscription to Zero Coupon Zero Principal Instruments issued by a Not-for-Profit Organisation and listed on the Social Stock Exchange."

This amendment formally recognises subscription to eligible ZCZP Instruments as a permissible CSR activity and provides statutory backing for companies seeking to utilise such instruments for meeting their CSR obligations.

By incorporating ZCZP subscriptions within Schedule VII, the Government has effectively expanded the range of permissible CSR implementation mechanisms beyond conventional project funding and direct contributions.

Key Amendments to the CSR Rules

The Companies (Corporate Social Responsibility Policy) Amendment Rules, 2026 introduce a dedicated framework governing CSR implementation through ZCZP Instruments.

Definition of Not-for-Profit Organisation

The amended rules align the definition of a Not-for-Profit Organisation with the definition prescribed under the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018.

This harmonisation ensures consistency between the corporate law framework and the securities market regulations governing Social Stock Exchanges.

Definition of Zero Coupon Zero Principal Instrument

The Rules define a ZCZP Instrument as a security issued by a Not-for-Profit Organisation registered with the Social Stock Exchange segment of a recognised stock exchange in accordance with applicable regulations.

This ensures that only regulated and exchange-listed instruments qualify for CSR implementation under the amended framework.

Introduction of Rule 4A: CSR Through ZCZP Instruments

A significant feature of the amendment is the insertion of a new Rule 4A, which specifically governs CSR implementation through ZCZP Instruments.

Under the newly inserted provision, companies may subscribe to eligible ZCZP Instruments as a means of carrying out CSR activities.

However, the Rules prescribe an important safeguard by limiting such expenditure to:

10% of the total CSR expenditure of the company for a particular financial year.

This cap appears intended to strike a balance between encouraging participation in the Social Stock Exchange ecosystem and ensuring that the majority of CSR expenditure continues to be deployed through conventional implementation channels.

Exemption from Impact Assessment

Another noteworthy relaxation introduced through Rule 4A relates to impact assessment requirements.

The Rules provide that companies subscribing to ZCZP Instruments shall not be required to undertake an impact assessment under Rule 8(3) of the CSR Rules in relation to projects funded through such instruments.

This exemption significantly reduces the compliance burden for companies and recognises the fact that listed NPOs operating under the Social Stock Exchange framework are already subject to enhanced disclosure, reporting, and governance requirements.

The exemption is expected to make ZCZP Instruments a more attractive option for companies seeking efficient CSR deployment mechanisms.

Applicability of Existing CSR Implementation Framework

Rule 4A further clarifies that the general provisions governing CSR implementation under Rule 4 of the CSR Rules shall continue to apply to CSR activities undertaken through ZCZP Instruments, except for sub-rules (5) and (6).

This ensures that the new mechanism remains integrated within the broader CSR governance framework while accommodating the unique nature of ZCZP-based funding.

Conditions Applicable to Issuing NPOs

The amendments also impose specific obligations on Not-for-Profit Organisations raising funds through ZCZP Instruments.

Such organisations are required to:

Undertake projects with a duration not exceeding three succeeding financial years from the date of issuance of the instrument; and

Transfer any unspent amount, upon termination of the instrument's listing, to a fund specified under Schedule VII of the Companies Act, 2013.

Additionally, the NPO must submit a compliance report to SEBI regarding such transfer.

These safeguards seek to ensure timely utilisation of funds and prevent indefinite retention of unutilised amounts.

Significance of the Reform

The amendments mark an important milestone in the evolution of India's CSR and social finance landscape.

For companies, the framework introduces an additional compliance-friendly avenue for deploying CSR funds through regulated and transparent channels. For Not-for-Profit Organisations, it opens access to a potentially significant pool of CSR capital through exchange-based fundraising mechanisms.

More broadly, the reform strengthens the role of Social Stock Exchanges as a credible platform for mobilising resources towards social development projects while promoting accountability, transparency, and efficient utilisation of funds.

As India's social finance ecosystem continues to mature, the integration of CSR spending with Social Stock Exchange instruments could play a transformative role in scaling impact-driven initiatives and creating sustainable funding pathways for the development sector.

The introduction of CSR implementation through ZCZP Instruments therefore represents not merely a compliance reform, but a significant step towards institutionalising market-based mechanisms for social impact financing in India.

IRDAI Considers Relaxing Investment Limits for REITs and InvITs: A Potential Boost for Infrastructure Financing

India's insurance sector may soon witness a significant shift in its investment landscape. The Insurance Regulatory and Development Authority of India (IRDAI) is reportedly examining a proposal to rationalise investment exposure norms applicable to insurance companies investing in Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs). If implemented, the move could provide insurers with greater flexibility in deploying long-term capital while simultaneously strengthening India's infrastructure financing ecosystem.

The proposal comes at a time when policymakers are actively seeking to deepen domestic institutional participation in infrastructure development and encourage greater capital mobilisation through alternative investment structures.

Existing Investment Framework

At present, insurance companies are permitted to invest up to:

3% of their investment portfolio in REITs; and

3% of their investment portfolio in InvITs.

These limits operate independently, requiring insurers to manage separate exposure caps for each asset class.

Under the proposal currently under consideration, the existing framework may be replaced with a combined exposure limit of 6% across both REITs and InvITs. While the aggregate ceiling would remain unchanged, insurers would gain greater flexibility in allocating investments between the two asset classes based on market opportunities, risk-return considerations, and portfolio requirements.

The proposal therefore represents a shift from a rigid asset-specific approach towards a more flexible and market-oriented investment framework.

Why the Proposal Has Gained Momentum

The proposal is understood to have gained traction following the strong response received by the recently launched Raajmarg InvIT sponsored by the National Highways Authority of India (NHAI).

The approximately ₹6,000 crore InvIT issue reportedly attracted substantial institutional participation, including significant interest from insurance companies despite the existing exposure restrictions.

The success of the issuance highlighted the growing appetite among institutional investors for infrastructure-backed investment products and reinforced the view that insurers could potentially play a larger role in funding India's infrastructure development.

Industry stakeholders, including infrastructure developers and public sector entities, have reportedly advocated for greater participation by insurance companies in InvIT issuances to facilitate deeper pools of long-term capital.

Understanding REITs and InvITs

Although often discussed together, REITs and InvITs cater to different asset classes.

REITs

Real Estate Investment Trusts primarily invest in:

Commercial office spaces;

Retail properties;

Warehousing facilities; and

Other income-generating real estate assets.

These structures generate revenue primarily through rental income and asset appreciation.

InvITs

Infrastructure Investment Trusts typically own and operate:

Highways;

Power transmission assets;

Renewable energy projects;

Telecom infrastructure; and

Other operational infrastructure assets.

InvITs are designed to generate predictable cash flows from long-term infrastructure assets and distribute a significant portion of earnings to investors.

Both structures provide investors with access to stable income-generating assets without requiring direct ownership or management responsibilities.

Alignment with Insurance Companies’ Investment Objectives

The proposed relaxation is particularly significant because REITs and InvITs possess characteristics that closely align with the investment objectives of insurance companies.

Insurance liabilities are inherently long-term in nature. Consequently, insurers seek investment opportunities that offer:

Stable and predictable cash flows;

Long-duration income streams;

Capital preservation;

Portfolio diversification; and

Reasonable risk-adjusted returns.

Operational infrastructure assets and mature commercial real estate projects generally exhibit these characteristics, making REITs and InvITs attractive investment vehicles for insurance funds.

Globally, insurance companies are among the largest investors in infrastructure and real asset platforms due to the natural alignment between such investments and their liability structures.

Potential Benefits of a Combined Exposure Limit

Greater Investment Flexibility

A combined 6% limit would allow insurers to allocate capital more efficiently between REITs and InvITs depending on prevailing market conditions and investment opportunities.

Improved Capital Allocation

Investment decisions could be driven by commercial considerations rather than regulatory segmentation between two closely related asset classes.

Enhanced Infrastructure Funding

Greater insurer participation could provide a larger and more stable source of long-term capital for infrastructure projects and monetisation programmes.

Strengthening Capital Markets

Increased institutional participation may improve liquidity, pricing efficiency, and investor confidence in India's REIT and InvIT markets.

Support for Government Monetisation Initiatives

Public authorities and infrastructure developers increasingly rely on InvITs as a mechanism for unlocking capital from operational assets. Higher insurer participation could significantly enhance the success of such programmes.

Importance for India's Infrastructure Sector

The proposal assumes particular significance against the backdrop of India's growing infrastructure financing requirements.

Over the last decade, InvITs have emerged as a key capital recycling mechanism that enables developers and public authorities to monetise mature infrastructure assets and redeploy capital into new projects.

Several major public sector entities have successfully utilised InvIT structures, including:

National Highways Authority of India (NHAI);

Power Grid Corporation of India Limited;

Renewable energy developers; and

Infrastructure operators across multiple sectors.

By enabling greater participation from insurance companies, the proposed relaxation could help bridge financing gaps and reduce reliance on traditional bank financing.

As India continues to pursue ambitious infrastructure development targets under initiatives such as PM Gati Shakti and the National Infrastructure Pipeline, mobilising domestic institutional capital has become a critical policy objective.

Balancing Flexibility with Prudential Oversight

While the proposal is expected to be welcomed by market participants, prudential considerations will remain important.

REITs and InvITs, despite offering relatively stable cash flows, remain market-linked instruments exposed to:

Interest rate fluctuations;

Economic cycles;

Sector-specific risks;

Asset valuation movements; and

Regulatory changes.

Accordingly, any final relaxation is likely to continue incorporating safeguards designed to protect policyholder interests and maintain financial stability.

The challenge for regulators will be to strike an appropriate balance between investment flexibility and prudent risk management.

Conclusion

IRDAI's proposal to rationalise investment exposure limits for REITs and InvITs reflects the growing maturity of India's alternative investment ecosystem and the increasing importance of domestic institutional capital in financing economic growth.

By allowing insurers greater flexibility within an overall prudential framework, the proposal has the potential to strengthen capital flows into both infrastructure and commercial real estate sectors while supporting India's broader development objectives.

If implemented, the revised framework could represent a significant step towards aligning India's insurance investment regulations with evolving market realities, deepening institutional participation in infrastructure financing, and creating a more robust ecosystem for long-term capital formation.

As India's infrastructure ambitions continue to expand, insurance companies may increasingly emerge as a critical source of patient capital, helping bridge the funding requirements of the country's next phase of growth.

In a significant move aimed at streamlining India’s foreign investment approval framework, the Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry, issued a revised Standard Operating Procedure (SOP) for processing Foreign Direct Investment (FDI) proposals on May 4, 2026.

The revised SOP replaces the earlier 2017 framework and introduces a substantially modernised, paperless, and compliance-intensive mechanism for handling foreign investment proposals requiring Government approval under India’s FDI regime. The updated framework also extends the overall disposal timeline for FDI proposals from 10 weeks to 12 weeks, while simultaneously strengthening disclosure, monitoring, and security review mechanisms.

The revised framework comes at a time when India has been recalibrating its FDI policy architecture, particularly in relation to investments from countries sharing land borders with India, beneficial ownership disclosures, and strategic sector investments.

Transition to a Completely Digital Approval Framework

One of the most notable aspects of the revised SOP is the complete digitisation of the filing and approval process.

All proposals requiring Government approval under the Consolidated FDI Policy and the Foreign Exchange Management (Non-debt Instruments) Rules, 2019 must now be filed online through the Foreign Investment Facilitation (FIF) portal integrated with the National Single Window System (NSWS).

The Government has expressly described the revised filing mechanism as “completely paperless.”

Applicants are now required to digitally upload detailed disclosures relating to:

• ownership structure;
• beneficial ownership;
• downstream investments;
• valuation;
• sanctions exposure; and
• debarment history.

The move reflects the Government’s broader push toward digitisation and integrated regulatory processing across investment and business approvals.

Centralised Coordination Through DPIIT

Under the revised framework, DPIIT will continue to function as the nodal coordinating authority.

Once an FDI proposal is filed:

• DPIIT will assign it to the relevant Administrative Ministry or Department acting as the “Competent Authority”;
• the proposal will simultaneously be circulated to the Reserve Bank of India (RBI) for comments; and
• where applicable, comments will also be sought from: the Ministry of Home Affairs (MHA); and the Ministry of External Affairs (MEA).

Importantly, the SOP clarifies that Ministries and Departments should avoid creating duplicative inter-ministerial approval structures and that the approval process should remain “simpler to execute and more expeditious.”

Enhanced Scrutiny for Border-Country Investments

The revised SOP incorporates the policy changes introduced through Press Note 2 of 2026 and the recently amended FEMA framework governing investments from countries sharing land borders with India.

Under the revised regime:

• MEA clearance is specifically required for investments covered under Paragraph 3.1.1 of the FDI Policy relating to land-bordering countries; and
• beneficial ownership disclosures aligned with the Prevention of Money Laundering Act (PMLA) framework become mandatory.

The SOP also formalises additional reporting obligations for investments involving direct or indirect ownership links with land-bordering countries, even in situations where prior Government approval may not otherwise be required.

This reflects the Government’s increasing focus on ownership tracing and beneficial ownership transparency in cross-border investments.

Structured Processing Timelines Introduced

The revised SOP prescribes a structured timeline-based approval mechanism aimed at improving predictability in regulatory processing.

The framework broadly contemplates:

• dissemination of proposals within 2 days;
• scrutiny and deficiency communication within 12 days;
• clarification on FDI policy issues within 2 weeks;
• stakeholder comments within 6 weeks; and
• final disposal within 4 weeks thereafter.

The cumulative disposal timeline has now been fixed at 12 weeks.

Importantly, the time taken by applicants to cure deficiencies or provide additional information is excluded from this timeline.

The SOP further clarifies that if comments from consulted Ministries or regulators are not received within the prescribed period, it will be presumed that they have no comments to offer.

This deeming mechanism is likely to reduce delays caused by inter-departmental inaction.

Mandatory Security Clearance for Sensitive Sectors

The revised framework strengthens security review mechanisms for investments in strategic and sensitive sectors.

Mandatory MHA security clearance is required for investments involving sectors such as:

• defence;
• telecommunications;
• broadcasting;
• civil aviation;
• private security agencies;
• space;
• mining involving titanium-bearing minerals; and
• investments covered under the revised land-bordering country framework.

This reinforces the increasing convergence between India’s FDI regime and national security considerations.

Clarification on Post-Facto Approvals

The SOP also clarifies that Competent Authorities may process applications seeking post-facto approval in situations where:

• the investment originally required Government approval; but
• the sector has subsequently shifted to the automatic route.

This clarification is significant for legacy transactions and historical compliance regularisation.

Standard Conditions for Approved Investments

The revised framework prescribes standard conditions applicable to approved FDI proposals.

Approved entities are required to comply with:

• the FDI Policy;
• FEMA Non-Debt Instrument Rules;
• sectoral regulations;
• RBI pricing and reporting guidelines; and
• downstream investment conditions under Rule 23 of the FEMA NDI Rules.

The SOP also expressly clarifies that Government approval under the FDI framework:

• does not automatically confer tax benefits;
• does not override tax scrutiny; and
• does not provide immunity from anti-avoidance investigations under the Income-tax Act or applicable tax treaties.

Relaxation for Certain Increases in Foreign Equity

A notable relaxation introduced under the SOP relates to incremental foreign investment approvals.

No prior approval of the Competent Authority is required for increases in foreign equity up to ₹5,000 crore where:

• there is no change in the approved percentage of foreign shareholding; and
• post-facto intimation is provided within 30 days of receipt of funds and allotment of shares.

This is expected to simplify capital infusion processes in already approved structures.

Expedited 60-Day Approval Route for Strategic Manufacturing Sectors

The revised SOP also operationalises the expedited approval mechanism announced earlier for certain strategic sectors.

Specified investments linked to land-bordering countries in sectors such as:

• semiconductors;
• electronics manufacturing;
• advanced battery components;
• rare earth processing; and
• heavy electrical equipment

may now be processed within 60 days, subject to prescribed safeguards.

These safeguards include:

• aggregate land-bordering country shareholding not exceeding 49%; and
• majority ownership and control remaining with resident Indian citizens or Indian-controlled entities.

This reflects a calibrated policy approach balancing strategic investment facilitation with national security oversight.

Conclusion

The revised SOP for processing FDI proposals represents a major overhaul of India’s foreign investment approval framework.

By introducing:

• end-to-end digitisation;
• structured timelines;
• enhanced beneficial ownership disclosures;
• stricter security scrutiny; and
• expedited mechanisms for strategic sectors,

the Government appears to be pursuing a dual objective of improving ease of doing business while simultaneously strengthening regulatory and national security oversight.

The revised framework is likely to significantly increase the importance of compliance diligence, ownership tracing, and transaction structuring in cross-border investments into India.

For foreign investors, private equity funds, multinational groups, and strategic investors, the new SOP marks a decisive shift toward a more transparent, technology-driven, and security-conscious FDI approval ecosystem.

The Insolvency and Bankruptcy Board of India (IBBI) has issued the Insolvency Professionals to act as Interim Resolution Professionals, Resolution Professionals, Liquidators and Bankruptcy Trustees (Recommendation) Guidelines, 2026 on May 18, 2026, introducing a revised framework for preparing panels of Insolvency Professionals (IPs) to facilitate appointments before the National Company Law Tribunal (NCLT) and Debt Recovery Tribunal (DRT).

The new framework will govern appointments for the period from July 1, 2026 to December 31, 2026 and replaces the earlier guidelines issued in November 2025, which were applicable for the January–June 2026 period. The revised guidelines continue IBBI’s efforts to institutionalize a structured, transparent, and efficient mechanism for recommending Insolvency Professionals, while introducing greater emphasis on experience-based disclosures and sector-specific expertise.

Strengthening the Appointment Process

Under the Insolvency and Bankruptcy Code, 2016 (IBC), adjudicating authorities frequently require the IBBI to recommend suitable Insolvency Professionals for appointment as:

• Interim Resolution Professionals (IRPs);
• Resolution Professionals (RPs);
• Liquidators; and
• Bankruptcy Trustees (BTs).

Such recommendations become particularly important where creditors fail to propose a professional or where circumstances require the adjudicating authority to seek an independent recommendation from the regulator.

The revised framework seeks to ensure that a ready pool of eligible and assignment-ready professionals is available at all times, thereby minimizing delays in commencement of insolvency and bankruptcy proceedings.

Timely appointment of insolvency professionals remains critical because delays at the initial stage often have a cascading impact on the overall insolvency resolution timeline, asset preservation efforts, and value maximization objectives under the Code.

Eligibility Conditions Remain Stringent

The 2026 Guidelines prescribe strict eligibility conditions for inclusion in the panel.

An Insolvency Professional may be included only if:

• no disciplinary proceedings are pending before the IBBI or the concerned Insolvency Professional Agency (IPA);
• the professional has not been convicted during the preceding three years;
• unconditional consent has been furnished through Form A; and
• a valid Authorisation for Assignment (AFA) remains in force throughout the panel period.

Importantly, the guidelines clarify that professionals seeking empanelment for the July–December 2026 panel must possess an AFA that remains valid beyond December 31, 2026.

This requirement ensures that appointments are not disrupted due to expiration of authorizations during the panel period and reinforces the principle that only assignment-ready professionals should be available for recommendation.

Enhanced Disclosure Requirements Through Form A

One of the notable features of the revised framework is the detailed disclosure regime embedded within Form A.

Insolvency Professionals are now required to provide comprehensive information relating to:

• registration details;
• validity of Authorisation for Assignment;
• ongoing assignments;
• completed assignments;
• value of approved resolution plans;
• liquidation value realized in completed matters;
• sectoral experience;
• disciplinary history; and
• any debarment or regulatory action.

The enhanced disclosure framework appears designed to provide adjudicating authorities with a more complete picture of a professional’s experience, capacity, and track record.

By collecting information relating to both ongoing and completed assignments, the IBBI seeks to improve transparency and facilitate better-informed appointment decisions.

Sectoral Expertise Takes Centre Stage

Perhaps the most significant development under the revised guidelines is the increasing emphasis on sectoral specialization.

Insolvency Professionals are now required to identify sectors in which they possess relevant experience, either through completed assignments or ongoing insolvency proceedings.

The sectoral details must be selected through a prescribed dropdown framework in Form A, with an additional “Others” category available where the sector is not specifically listed.

This development reflects the growing complexity of insolvency proceedings in specialized industries such as:

• infrastructure;
• real estate;
• power and energy;
• pharmaceuticals;
• telecommunications;
• financial services;
• manufacturing; and
• technology.

As insolvency cases become increasingly sector-specific, professional familiarity with industry dynamics, regulatory frameworks, and operational challenges can play a critical role in preserving value and facilitating successful resolution outcomes.

The revised framework therefore appears aimed at enabling adjudicating authorities to make appointments that are better aligned with the nature of the underlying business.

Expression of Interest Process

The empanelment process continues to be based on the submission of an Expression of Interest (EOI) through Form A.

The IBBI will issue invitations through registered email addresses of Insolvency Professionals.

Submission of Form A constitutes unconditional consent to act as:

• Interim Resolution Professional;
• Resolution Professional;
• Liquidator; or
• Bankruptcy Trustee.

The last date for submission of EOIs is June 19, 2026, while the final panel is scheduled to be circulated to NCLT and DRT benches by June 30, 2026.

This advance preparation mechanism ensures that adjudicating authorities have access to a pre-vetted panel immediately upon commencement of the new panel period.

Continuing Focus on Efficiency and Transparency

The revised guidelines continue a regulatory trend aimed at improving transparency, accountability, and efficiency in insolvency administration.

Over the past few years, the IBBI has increasingly focused on strengthening professional standards through:

• tighter disclosure norms;
• enhanced monitoring;
• improved reporting frameworks;
• sectoral specialization; and
• professional accountability measures.

The revised panel framework complements these initiatives by ensuring that recommendations made to adjudicating authorities are based on objective criteria and updated professional information.

The requirement to disclose completed assignments, realized liquidation values, and approved resolution plan values may also encourage greater emphasis on measurable outcomes and performance-based evaluation.

Looking Ahead

The revised Guidelines represent another step in the maturation of India’s insolvency ecosystem.

While the fundamental structure of advance panel preparation remains unchanged, the increased focus on experience, sectoral expertise, and comprehensive disclosures is likely to improve the quality of recommendations made to adjudicating authorities.

As insolvency proceedings continue to evolve and involve increasingly sophisticated businesses and complex stakeholder interests, the ability to match professionals with relevant industry expertise may significantly enhance the effectiveness of resolution and liquidation processes.

The July–December 2026 panel framework therefore reflects a broader policy objective of ensuring that insolvency administration in India is not only timely but also increasingly specialized, transparent, and outcome-oriented.

India’s manufacturing ambitions have received a significant boost with the release of the operational guidelines for the Bharat Audyogik Vikas Yojana (BHAVYA) Scheme by the Department for Promotion of Industry and Internal Trade (DPIIT). Designed as one of the most ambitious industrial infrastructure initiatives in recent years, the scheme aims to create a network of investment-ready, plug-and-play industrial parks across the country, strengthening India’s position as a global manufacturing and supply chain hub.

With a total outlay of ₹33,660 crore and a target of developing 100 industrial parks over the next six years, the BHAVYA Scheme represents a major step towards achieving the objectives of Make in India, PM Gati Shakti, and the broader vision of transforming India into a competitive manufacturing destination.

A New Approach to Industrial Development

Industrial infrastructure has long been recognized as one of the most critical factors influencing investment decisions. While India has made considerable progress in improving its business environment, investors often continue to face challenges relating to land acquisition, connectivity, regulatory approvals, and infrastructure readiness.

The BHAVYA Scheme seeks to address these concerns through the creation of fully integrated industrial ecosystems that are ready for immediate industrial deployment. Unlike traditional industrial estates, the proposed parks are intended to offer comprehensive infrastructure, seamless connectivity, digital governance systems, worker housing, logistics facilities, and sustainable development features under a unified framework.

The objective is not merely to develop industrial land but to create complete manufacturing ecosystems capable of attracting domestic and global investments.

Eligibility and Park Development Framework

Under the operational guidelines, financial assistance will be extended for the development of 100 industrial parks during the period 2026-27 to 2031-32.

The first phase of implementation will commence through two application rounds scheduled between June and September 2026. Applications must be submitted through a dedicated online portal along with a Detailed Project Report (DPR).

The scheme prescribes minimum land requirements of:

• 100 acres for industrial parks located in non-hilly states; and
• 25 acres for industrial parks located in hilly states, northeastern states, Union Territories, and states with a population below one crore.

Both greenfield and eligible brownfield projects are permitted, provided the land is contiguous, litigation-free, unencumbered, and available for industrial development.

To ensure implementation readiness, sponsoring agencies are required to possess at least 90% encumbrance-free land at the application stage itself. Such land must subsequently be transferred to the project Special Purpose Vehicle (SPV) within three months of approval.

Selection Criteria Focus on Investment Readiness

A notable feature of the BHAVYA Scheme is its emphasis on quality rather than mere land availability.

Applications will be evaluated on a comprehensive matrix that considers:

• multimodal connectivity;
• industrial ecosystem strength;
• integrated master planning;
• infrastructure quality;
• digital governance readiness;
• sustainability measures;
• worker housing and social infrastructure;
• renewable energy integration;
• underground utility networks;
• skill development ecosystem; and
• single-window clearance mechanisms.

This approach reflects a shift from traditional industrial park development towards globally benchmarked industrial townships capable of supporting advanced manufacturing sectors.

SPV-Led Governance Model

Each approved industrial park must be developed through a Special Purpose Vehicle incorporated under the Companies Act, 2013.

The SPV will be responsible for:

• project planning;
• financing;
• infrastructure development;
• operations and maintenance;
• land allotment;
• lease administration; and
• monitoring and compliance.

One of the most significant requirements under the guidelines is the mandatory delegation of planning and development powers by State Governments to the SPV. This delegation is intended to facilitate genuine single-window approvals and reduce regulatory bottlenecks.

The release of project funding itself has been linked to the fulfilment of this requirement, demonstrating the Government’s commitment to streamlined project implementation.

Funding Support and Financial Incentives

The BHAVYA Scheme offers substantial financial support for eligible projects.

Funding assistance may extend up to ₹1 crore per acre for approved industrial parks. For projects led by private developers, the support is capped at ₹50 lakh per acre or 50% of infrastructure costs, whichever is lower.

In addition to internal infrastructure, up to 25% of approved funding may be utilised for external connectivity infrastructure, including last-mile road, rail, and utility linkages.

Funds will be released in three stages in the ratio of 40:40:20, linked to achievement of specific milestones such as:

• transfer of land;
• receipt of environmental clearances;
• delegation of planning powers;
• commencement of infrastructure works; and
• allotment to manufacturing units.

The scheme identifies a wide range of eligible infrastructure, including roads, water supply systems, underground utilities, waste treatment facilities, worker housing, renewable energy infrastructure, logistics facilities, warehousing, testing laboratories, and common industrial utilities.

Encouraging Private Sector Participation

The operational guidelines also provide a comprehensive framework for private developer participation.

Private developers must satisfy prescribed eligibility requirements relating to:

• incorporation in India;
• minimum net worth;
• technical experience; and
• absence of blacklisting by government authorities.

The framework further incorporates sophisticated governance safeguards, including provisions relating to:

• lock-in requirements;
• change of control restrictions;
• right of first refusal;
• distress exit mechanisms; and
• State Government step-in rights in situations involving insolvency or project default.

Importantly, anchor investors may be permitted to allot up to 25% of developed land to themselves, subject to specified investment and operational conditions. This flexibility is expected to improve project viability and encourage participation from large industrial groups.

Monitoring, Sustainability and Long-Term Impact

The BHAVYA Scheme goes beyond infrastructure creation and places considerable emphasis on accountability and sustainability.

The guidelines provide for:

• GIS-based project monitoring;
• third-party evaluations;
• audit mechanisms;
• oversight by a National Level Steering Committee; and
• post-project social and community impact assessments.

The incorporation of digital monitoring systems and sustainability metrics aligns the scheme with modern infrastructure governance practices and global investment expectations.

Conclusion

The BHAVYA Scheme represents one of the most comprehensive industrial infrastructure initiatives undertaken in India in recent years. By combining substantial financial support, integrated planning, digital governances, private sector participation, and strong implementation safeguards, the scheme seeks to address many of the structural challenges that have historically constrained industrial development.

If implemented effectively, BHAVYA has the potential to transform India’s industrial landscape by creating world-class manufacturing ecosystems capable of attracting domestic and global investment, generating employment, strengthening supply chains, and accelerating the country’s journey towards becoming a leading manufacturing powerhouse.

As global companies continue to diversify supply chains and seek reliable production destinations, the success of the BHAVYA Scheme could play a pivotal role in shaping the next phase of India’s industrial growth story.

India has formally operationalised one of the most significant liberalisation measures in the insurance sector in recent years. On May 2, 2026, the Ministry of Finance, Department of Economic Affairs, notified the Foreign Exchange Management (Non-debt Instruments) (Second Amendment) Rules, 2026, amending the existing FEMA framework to permit up to 100% foreign direct investment (FDI) in insurance companies and insurance intermediaries under the automatic route.

The amendment marks a major shift in India’s insurance investment landscape and reflects the government’s broader objective of increasing insurance penetration, attracting long-term capital, and strengthening financial inclusion.

From 74% to 100%: The Policy Shift

The reforms build upon Press Note No. 1 (2026 Series) issued by the Department for Promotion of Industry and Internal Trade (DPIIT) on February 9, 2026, which revised the Consolidated FDI Policy to allow up to 100% FDI in insurance companies and intermediaries under the automatic route.

The FEMA amendment now gives operational effect to that policy change.

This liberalisation follows the enactment of the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, 2025, which amended the Insurance Act, 1938, the Life Insurance Corporation Act, 1956, and the IRDAI Act, 1999.

Prior to this reform, foreign investment in Indian insurance companies was capped at 74%.

A Push Toward “Insurance for All”

The reform appears to be part of a broader policy vision aimed at expanding India’s insurance ecosystem.

A recent government backgrounder titled “Insurance for All: Expanding Coverage, Strengthening Social Security” highlighted that the reforms are intended to deepen insurance penetration, strengthen social protection, attract long-term investment, and support sectoral growth.

The timing is also significant. India’s insurance sector has witnessed rapid expansion in recent years, with premium collections reportedly reaching approximately ₹11.93 lakh crore in FY 2024–25.

What the Amendment Rules Permit

100% Foreign Investment in Insurance Companies

The Amendment Rules now permit aggregate foreign investment, including investment by foreign portfolio investors (FPIs), in Indian insurance companies up to 100% of paid-up equity capital.

Such investment is permitted under the automatic route, though it remains subject to approval and verification by the Insurance Regulatory and Development Authority of India (IRDAI) and compliance with the Insurance Act, 1938 and related regulations.

This effectively removes one of the most significant barriers to foreign participation in the sector.

Governance Safeguards Remain

While the sector has been fully opened to foreign investment, the framework continues to preserve certain governance safeguards.

In insurance companies with foreign investment, at least one among the Chairperson, Managing Director, or Chief Executive Officer must be a resident Indian citizen.

Additionally, such companies must comply with the Indian Insurance Companies (Foreign Investment) Rules, 2015 and all applicable regulations issued by the Department of Financial Services and IRDAI.

These safeguards indicate that while ownership restrictions have been liberalised, regulatory supervision and local governance oversight remain firmly embedded within the framework.

Expansion of FDI in Insurance Intermediaries

The liberalised regime also extends to insurance intermediaries.

The 100% foreign investment limit now applies to entities including insurance brokers, reinsurance brokers, insurance consultants, corporate agents, third-party administrators, surveyors and loss assessors, managing general agents, and insurance repositories.

This expansion is expected to significantly improve capital availability and technological participation within ancillary insurance services.

Additional Conditions for Majority Foreign-Owned Intermediaries

Insurance intermediaries with majority foreign ownership are subject to additional compliance obligations.

Such entities must:

• be incorporated as companies under the Companies Act, 2013;
• ensure that at least one key managerial person is a resident Indian citizen;
• bring in technological and managerial expertise; and
• make prescribed disclosures regarding payments to related entities.

These requirements appear designed to ensure transparency, operational accountability, and genuine value addition from foreign participation.

FPI and Pricing Guidelines Continue to Apply

The Amendment Rules clarify that foreign portfolio investment in insurance companies will continue to be governed by the applicable FEMA provisions and the SEBI (Foreign Portfolio Investors) Regulations, 2019.

Further, any increase in foreign investment remains subject to FEMA pricing guidelines.

Thus, while entry restrictions have been liberalised, transactional and pricing safeguards continue to apply.

Special Position of LIC

Importantly, the reforms do not fully extend to the Life Insurance Corporation of India (LIC).

Foreign investment in LIC remains capped at 20% under the automatic route.

The Amendment Rules clarify that foreign investment in LIC will continue to be governed by the LIC Act, 1956 and applicable provisions of the Insurance Act, 1938.

This preserves LIC’s distinct statutory and policy position within India’s insurance ecosystem.

Implications for the Sector

The opening of the insurance sector to 100% FDI is likely to have far-reaching implications.

Potential outcomes include:

• increased foreign capital inflows;
• deeper insurance penetration;
• greater competition and innovation;
• improved technological integration; and
• expansion of insurance infrastructure across underserved regions.

The reforms may also accelerate consolidation, strategic partnerships, and entry of global insurance players into the Indian market.

At the same time, the sector will continue to remain heavily regulated through IRDAI oversight and FEMA compliance mechanisms.

Conclusion

The FEMA amendment operationalising 100% FDI in insurance marks a major milestone in India’s financial sector liberalisation journey.

By combining capital liberalisation with governance safeguards and regulatory oversight, the framework seeks to balance investor confidence, financial stability, and consumer protection.

The success of the reform will ultimately depend on how effectively increased foreign participation translates into broader insurance access, technological advancement, and long-term sectoral growth.

The Central Government has formally operationalised the revised regulatory framework governing investments from countries sharing land borders with India through the notification of the Foreign Exchange Management (Non-debt Instruments) (Amendment) Rules, 2026. The amendment, notified on May 1, 2026 and published in the Official Gazette on May 2, 2026, introduces significant changes to the treatment of beneficial ownership, indirect control structures, and approval requirements for foreign investments involving land-bordering countries.

The revised framework marks an important evolution of India’s foreign investment regime under FEMA and reflects the Government’s attempt to balance national security concerns with ease of doing business and investment facilitation.

Background: From Press Note 3 to the 2026 Reforms

The regulatory journey began with Press Note 3 (2020 Series), issued during the COVID-19 pandemic on April 17, 2020. The measure amended India’s FDI policy to require prior Government approval for investments originating from countries sharing land borders with India, or where the beneficial owner of the investment was situated in or linked to such countries.

The policy was introduced against the backdrop of concerns regarding opportunistic acquisitions of Indian businesses during pandemic-induced market disruptions.

However, over time, industry stakeholders raised concerns regarding the broad and uncertain scope of the framework, particularly around the interpretation of “beneficial ownership,” treatment of indirect investments, and applicability to global investment funds and layered ownership structures.

Recognising these concerns, the Government initiated a calibrated review of the framework in March 2026 through a Cabinet-approved proposal and subsequent policy changes.

The revised framework now formally aligns beneficial ownership determination with the Prevention of Money-Laundering Act, 2002 (PMLA) and the Prevention of Money-Laundering (Maintenance of Records) Rules, 2005 (PML Rules), thereby introducing a more structured and legally recognised standard.

The latest FEMA notification gives statutory effect to these policy reforms by incorporating them directly into the Foreign Exchange Management (Non-debt Instruments) Rules, 2019.

Key Change: Alignment with the PMLA Beneficial Ownership Framework

One of the most significant aspects of the amendment is the formal alignment of the concept of “beneficial owner” with Section 2(1)(fa) of the PMLA and Rule 9(3) of the PML Rules.

Under this framework, a beneficial owner refers to the natural person who ultimately owns, controls, or exercises ultimate effective control over an entity or transaction.

This alignment is important because it replaces the earlier uncertainty surrounding the interpretation of beneficial ownership under the FDI regime with a recognised statutory framework already widely used in anti-money laundering compliance and KYC processes.

Expanded Attribution Framework for Land-Border Investments

The amendment introduces a detailed attribution mechanism for determining when beneficial ownership is considered to be linked to a country sharing a land border with India.

Beneficial ownership will now be attributed to such country where a citizen or entity of that country, directly or indirectly, individually or collectively:

• holds rights or entitlements above the prescribed thresholds under the PML Rules;
• exercises control over the investor entity; or
• exercises ultimate effective control over the investee entity.

Importantly, the framework expressly recognises indirect, cumulative, and collective ownership structures, including cases where multiple entities or persons may be acting together.

This significantly expands the scope of regulatory scrutiny in complex cross-border investment structures.

Government Approval Requirements Continue

While the revised framework introduces greater clarity, investments involving material beneficial ownership or control from land-bordering countries continue to remain subject to the Government approval route.

Under the amended Schedule I of the NDI Rules, investments requiring Government approval cannot proceed without prior approval from the competent authority and remain subject to conditions imposed under such approval.

The revised framework therefore preserves the national security and strategic screening objectives underlying Press Note 3 while refining the methodology for determining applicability.

Indirect Transfers and Downstream Transactions Also Covered

The amendment further clarifies that any transfer of ownership of existing or future foreign investment in an Indian entity, whether direct or indirect, resulting in beneficial ownership falling within the restricted category, will require prior Government approval.

This provision has substantial implications for:

• secondary acquisitions;
• offshore restructuring transactions;
• downstream investments; and
• internal group reorganisations.

Even where the Indian entity itself is not directly involved in the transfer, approval obligations may arise if the ultimate beneficial ownership structure changes in a manner triggering the revised tests.

As a result, ownership tracing and control analysis are likely to become critical aspects of transaction structuring and due diligence.

Distinction Between Approval-Based and Reporting-Based Compliance

An important feature of the revised framework is the distinction between investments requiring prior Government approval and those that may proceed subject to enhanced reporting obligations.

The amendment clarifies that investments involving ownership links with land-bordering countries, but not otherwise requiring approval under the revised framework, shall remain subject to reporting requirements prescribed by the Reserve Bank of India.

These reporting obligations are expected to operate alongside existing FEMA compliance mechanisms, including:

• Form FC-GPR;
• Form FC-TRS; and
• Annual FLA filings.

Additionally, the DPIIT is expected to prescribe further reporting disclosures through a Standard Operating Procedure (SOP).

Relaxation for Non-Controlling Investments

The broader March 2026 policy reforms had also contemplated limited relaxation for investments involving non-controlling beneficial ownership from land-bordering countries below prescribed thresholds.

This move appears intended to address practical concerns affecting global private equity and venture capital funds, where passive exposure to restricted jurisdictions may exist without strategic control.

The revised framework therefore seeks to distinguish between:

• material ownership or control requiring Government approval; and
• passive or limited exposure subject only to reporting obligations.

Continued Restrictions on Pakistan Investments

The amendment retains the special restrictions applicable to investments involving Pakistan.

A citizen of Pakistan or an entity incorporated in Pakistan may continue to invest only through the Government route and only in sectors other than:

• defence;
• space;
• atomic energy; and
• other prohibited sectors.

Exemption for Multilateral Institutions

The notification also clarifies that multilateral banks or funds of which India is a member will not be treated as entities of any specific country, nor will any country be treated as the beneficial owner of investments made by such institutions.

This clarification is particularly important for sovereign-backed multilateral investment platforms and international financial institutions.

Conclusion

The May 2026 FEMA amendment marks a major refinement of India’s post-2020 investment screening framework.

By aligning beneficial ownership standards with the PMLA regime, introducing structured attribution tests, and distinguishing between approval-triggering and reporting-based investments, the Government has attempted to create a more predictable and legally coherent framework for cross-border investments involving land-bordering countries.

At the same time, the framework significantly increases the importance of ownership tracing, beneficial ownership diligence, and control analysis in cross-border transactions involving layered offshore structures and indirect investment arrangements.

The revised regime is therefore likely to reshape transaction structuring, compliance strategies, and investment due diligence practices for foreign investors operating in India.

In a calibrated move reflecting its increasingly risk-based regulatory approach, the Reserve Bank of India (RBI), through its Circular dated April 29, 2026, has issued the Reserve Bank of India (Non-Banking Financial Companies – Registration, Exemptions and Framework for Scale Based Regulation) Amendment Directions, 2026. The amendments introduce a narrowly tailored exemption for a specific category of Non-Banking Financial Companies (NBFCs), signalling the RBI’s intent to rationalise regulatory requirements for low-risk entities while preserving supervisory oversight.

The Amendment Directions, which will come into force on July 1, 2026, modify the broader framework under the Scale Based Regulation (SBR) regime introduced for NBFCs in recent years.

The Broader Context: Scale-Based Regulation for NBFCs

The RBI’s Scale Based Regulation framework marked a major shift in NBFC regulation by moving away from a uniform compliance model toward a graded, risk-sensitive approach.

Under this framework, NBFCs are categorised based on:

• Asset size;
• Nature of activities;
• Complexity of operations; and
• Systemic importance.

The objective has been to ensure that entities posing greater financial stability risks are subject to stricter regulation, while smaller and less complex entities are not overburdened with disproportionate compliance obligations.

The latest amendment must be viewed within this broader policy direction

Who Gets the Exemption?

The Amendment Directions carve out an exemption for a very specific category of NBFCs.

To qualify, an entity must satisfy all three conditions:

1. It must be a non-deposit taking NBFC;
2. It must not avail public funds; and
3. It must not have any customer interface.

Additionally, the entity’s asset size must remain below ₹1,000 crore, based on its latest audited financial statements.

Only NBFCs meeting these cumulative criteria become eligible for the exemption.

What Exactly Has Been Exempted?

Eligible entities are exempted from the applicability of:

• Section 45-IA of the Reserve Bank of India Act, 1934, which mandates compulsory registration with the RBI; and
• Section 45-IC, which requires NBFCs to create and maintain a statutory reserve fund.

This effectively means that qualifying entities may operate without obtaining or continuing a Certificate of Registration (CoR) from the RBI and without maintaining statutory reserve requirements ordinarily applicable to NBFCs.

However, the exemption is deliberately narrow and does not amount to complete deregulation.

A Conditional and Controlled Relaxation

The RBI has clarified that these entities continue to remain subject to other applicable provisions of the RBI Act, 1934.

Importantly:

• The RBI retains full supervisory and enforcement powers;
• Non-compliance may still attract regulatory action; and
• The exemption is contingent upon continued satisfaction of the eligibility criteria.

This reflects a cautious regulatory philosophy—granting operational flexibility while retaining oversight mechanisms.

Transition Mechanism for Existing NBFCs

The Amendment Directions also establish a transition pathway for existing NBFCs that currently hold RBI registration but now fall within the exempted category.

Such entities, including those registered as Type I NBFCs, may apply for deregistration from the RBI.

Key aspects of the transition framework include:

• Applications must be filed through the PRAVAAH portal;
• The deadline for application is December 31, 2026; and
• Applications must be supported by prescribed documentation.

The required documentation includes:

• Audited financial statements;
• Auditor certifications; and
• Board resolutions confirming: absence of public funds, and absence of customer interface.

This structured transition process ensures that deregistration is not automatic but subject to verification and regulatory scrutiny.

Ongoing Compliance Obligations

Even after availing the exemption, qualifying entities are required to comply with several continuing obligations.

These include:

1. Maintaining Eligibility Conditions

The entity must continue to:

• avoid public funds; and
• operate without customer-facing activities.

Any deviation may result in loss of exemption status.

2. Financial Statement Disclosures

Eligible entities are required to make appropriate disclosures in the notes to accounts within their financial statements.

This enhances transparency and enables regulatory monitoring.

3. Auditor Reporting Requirements

Statutory auditors are specifically required to report any breach of the exemption conditions to the RBI.

This creates an additional compliance and accountability layer through independent audit oversight.

4. Group-Level Asset Aggregation

A particularly important safeguard introduced by the RBI relates to group structures.

Where multiple exempt entities exist within the same group, their asset sizes are required to be aggregated to determine whether the ₹1,000 crore threshold is breached.

This provision appears aimed at preventing regulatory arbitrage through fragmentation of operations across multiple entities.

Regulatory Philosophy: Rationalisation Without Dilution

The exemption reflects a broader trend in financial regulation toward proportional supervision.

The RBI appears to have recognised that entities:

• without public funds,
• without customer interaction, and
• with limited asset size

pose comparatively lower systemic and consumer protection risks.

Accordingly, imposing full-scale registration and reserve requirements on such entities may not serve a proportionate regulatory purpose.

At the same time, the RBI has consciously retained oversight tools to ensure that the exemption is not misused.

Implications for the NBFC Sector

The amendment is likely to provide relief to smaller and captive NBFC structures that primarily undertake internal financing or treasury-related functions without engaging with retail customers or public markets.

Potential benefits include:

• Reduced compliance costs;
• Simplified regulatory obligations; and
• Greater operational flexibility for low-risk entities.

However, entities availing the exemption must remain vigilant regarding:

• changes in funding structures;
• customer-facing activities; and
• group-level asset thresholds.

Failure to maintain compliance could expose them to regulatory action and re-registration requirements.

Conclusion

The RBI’s targeted exemption under the Scale Based Regulation framework marks another step toward a more nuanced and proportionate regulatory architecture for NBFCs.

Rather than adopting a blanket deregulatory approach, the RBI has chosen a calibrated model relaxing requirements for low-risk entities while preserving transparency, supervisory oversight, and anti-arbitrage safeguards.

The move reflects the continuing evolution of India’s financial regulatory framework toward risk-sensitive governance, where regulation is increasingly aligned with the scale, complexity, and systemic relevance of financial institutions.

In an important ruling on the formation of arbitration agreements and the legal status of Letters of Intent (LOIs), the Supreme Court of India, in Maharashtra State Electricity Distribution Company Limited & Ors. v. R Z Malpani (judgment dated April 9, 2026), has reaffirmed that a mere reference to tender conditions in an LOI does not automatically incorporate an arbitration clause contained in those documents.

The judgment is significant for government contracts, infrastructure projects, and commercial tenders, where parties often proceed on the basis of LOIs before execution of formal agreements. The Court’s ruling draws a clear distinction between a general contractual reference and the specific incorporation of an arbitration agreement, while also reiterating the limits of judicial intervention at the Section 11 stage under the Arbitration and Conciliation Act, 1996.

Background of the Dispute

The dispute arose from a tender floated by the appellant, Maharashtra State Electricity Distribution Company Limited (MSEDCL), for civil and interior works across Maharashtra.

The respondent’s bid was accepted through a Letter of Intent dated November 16, 2022. Pursuant to the LOI:

• The respondent furnished bank guarantees;
• Undertook preliminary compliance steps; and
• Prepared for execution of the project.

However, crucially:

• No work order was issued; and
• No formal agreement was ever executed between the parties.

Despite repeated follow-ups by the respondent, the project failed to materialise. The respondent subsequently invoked arbitration by relying on Clause 23 of the tender documents, which contained an arbitration clause.

MSEDCL opposed the invocation, contending that:

• No concluded contract had come into existence; and
• The LOI merely indicated an intention to enter into a future contract.

It was further argued that the LOI’s general reference to tender documents was insufficient to incorporate the arbitration clause.

Bombay High Court’s View

The Bombay High Court, while exercising jurisdiction under Section 11 of the Arbitration and Conciliation Act, appointed a sole arbitrator.

The High Court took the view that:

• The LOI amounted to acceptance of the bid; and
• The arbitration agreement could be inferred from the tender documents read with the parties’ correspondence.

This order was challenged before the Supreme Court.

The Central Issue Before the Supreme Court

The principal question before the Court was:

Whether a valid arbitration agreement existed between the parties on a prima facie examination.

This issue required the Court to examine two connected questions:

1. Whether the LOI resulted in a concluded contract; and
2. Whether the arbitration clause contained in the tender documents stood incorporated into the LOI.

LOI Is Not Always a Binding Contract

The Supreme Court began by examining the legal nature of a Letter of Intent.

The Court reiterated a well-established principle:

A Letter of Intent is ordinarily a precursor to a formal contract and generally reflects an intention to enter into legal relations in the future.

An LOI becomes binding only where its language clearly demonstrates an intention to create enforceable obligations immediately.

In the present case, the Court noted that the LOI expressly contemplated:

• Issuance of a detailed work order; and
• Execution of a formal agreement at a later stage.

Neither of these steps was completed.

Accordingly, the Court held that the LOI did not culminate in a concluded contract. At best, it represented a preliminary understanding or future intention to contract.

This finding itself substantially weakened the respondent’s case for arbitration.

Mere Reference Is Not Incorporation

Even assuming that some contractual relationship existed, the Court proceeded to examine whether the arbitration clause from the tender documents stood incorporated into the LOI.

This aspect of the judgment is particularly important.

The Court referred to Section 7(5) of the Arbitration and Conciliation Act, 1996, which governs incorporation of arbitration clauses contained in external documents.

Under Section 7(5):

• Incorporation requires a clear and conscious reference showing the parties’ intention to adopt the arbitration clause;
• A general reference to another document is insufficient.

The Court clarified the distinction between:

• A mere reference to contractual terms; and
• Specific incorporation of an arbitration agreement.

In the present case, the LOI merely referred generally to the tender conditions. There was no express language indicating that the arbitration clause itself was intended to be incorporated.

Therefore, the Court held that:

General reference to tender documents does not amount to incorporation of an arbitration clause.

This reaffirmation is significant because arbitration agreements are treated distinctly from ordinary contractual clauses and require demonstrable consensus between parties.

Limits of Judicial Intervention Under Section 11

The judgment also revisits the scope of judicial scrutiny under Section 11.

The Court reiterated that courts must ordinarily adopt a pro-arbitration approach, leaving disputed questions to the arbitral tribunal.

However, this principle is not absolute.

Where no arbitration agreement exists even on a prima facie basis, courts are duty-bound to refuse reference to arbitration.

The Court found that the High Court had erred in overlooking:

• The absence of a concluded contract; and
• The absence of specific incorporation of the arbitration clause.

The Supreme Court also noted that the High Court incorrectly observed that MSEDCL had not disputed the existence of an arbitration agreement, despite the record clearly showing otherwise.

Implications of the Judgment

The ruling carries important implications for:

• Government procurement contracts;
• Infrastructure and construction projects;
• Tender-based commercial arrangements; and
• Arbitration jurisprudence generally.

The judgment underscores that:

• LOIs are not automatically binding contracts;
• Arbitration clauses require specific incorporation; and
• Courts will not compel arbitration where foundational contractual requirements are absent.

For businesses, the decision highlights the importance of ensuring that:

• Arbitration clauses are expressly incorporated into interim documents such as LOIs; and
• Parties clearly record whether the LOI itself is intended to create binding obligations.

Conclusion

The Supreme Court’s decision serves as an important reminder that arbitration is fundamentally consensual in nature. Courts may adopt a pro-arbitration stance, but they cannot create an arbitration agreement where none exists.

By distinguishing between a preliminary commercial understanding and a legally enforceable contract, the Court has reinforced contractual certainty while preserving the integrity of arbitration law.

The ruling is likely to have a lasting impact on how LOIs, tender documents, and interim commercial arrangements are drafted and interpreted in India’s infrastructure and commercial sectors.

India’s insolvency framework for real estate is on the cusp of a significant transformation. Acting on directions of the Supreme Court of India, the Insolvency and Bankruptcy Board of India (IBBI) has released a comprehensive report proposing structural reforms to address long-standing inefficiencies in real estate insolvency under the Insolvency and Bankruptcy Code, 2016 (IBC).

The report, comprising 155 recommendations across 55 issues, reflects a clear shift from a company-centric insolvency model to a project-focused, stakeholder-sensitive framework, with a strong emphasis on protecting homebuyer interests and ensuring timely completion of projects.

The Problem: Why Real Estate Insolvency Needed Reform

Real estate insolvency has consistently posed unique challenges under the IBC. Unlike traditional corporate insolvency, real estate companies often operate multiple independent projects, each with distinct financial structures, approvals, and stakeholders.

However, the current framework treats the entire company as a single economic unit. This has led to:

• Viable projects being dragged into insolvency due to unrelated defaults;
• Delays in project completion;
• Multiplicity of claims and prolonged litigation; and
• Significant value erosion, particularly for homebuyers.

The absence of reliable project-level data, weak fund segregation, and limited coordination with sectoral regulators such as RERA have further compounded these challenges.

The Big Shift: Project-Wise Insolvency Resolution

The most transformative recommendation is the move toward a project-wise resolution framework.

Under this approach:

• Each real estate project is treated as a distinct economic unit;
• Assets and liabilities are ring-fenced at the project level; and
• Insolvency proceedings are initiated and resolved independently for each project.

This ensures that financially viable projects are not adversely impacted by defaults in unrelated projects.

At the same time, the report preserves flexibility by allowing entity-level insolvency in exceptional cases, such as:

• Fraud;
• Cross-collateralisation; or
• Fund commingling.

Resolution Over Liquidation: A Clear Policy Direction

The Committee strongly advocates a “resolution-first” approach, aligning with the IBC’s objective of preserving the corporate debtor as a going concern.

Key recommendations include:

• Prioritising project completion over liquidation;
• Encouraging induction of new developers or investor-led plans;
• Supporting homebuyer-led resolution plans; and
• Facilitating structured funding for project revival.

Liquidation, the report emphasises, should remain a last resort, backed by reasoned justification.

Strengthening Coordination with RERA

Recognising the regulatory overlap between insolvency law and real estate regulation, the report calls for institutionalised coordination between IBBI and RERA authorities.

Proposed measures include:

• Standardised data-sharing mechanisms;
• Appointment of nodal officers;
• Periodic consultations; and
• Active involvement of RERA in monitoring resolution plans.

This integration is crucial to ensure that insolvency proceedings do not operate in isolation from sector-specific regulatory requirements.

Financial Discipline: Escrow and Fund Segregation

A recurring issue in real estate insolvency has been the diversion of funds across projects.

To address this, the Committee recommends:

• Strict segregation of project-level funds;
• Use of escrow accounts for each project; and
• Compliance with RERA requirements mandating that 70% of buyer funds be used for project-specific costs.

These measures aim to restore financial discipline and prevent misuse of funds.

Homebuyers at the Centre of the Framework

The report places significant emphasis on protecting homebuyer interests, recognising their dual role as financial creditors and end-users.

Distinguishing Genuine vs Speculative Buyers

To prevent misuse of insolvency proceedings, the Committee proposes criteria to distinguish genuine homebuyers from speculative investors, based on factors such as:

• Nature of agreements (possession vs refund focus);
• Multiple unit purchases; and
• Unrealistic return expectations.

Facilitating Possession Delivery

For projects that are complete but stalled due to regulatory approvals, the report supports mechanisms enabling handover of possession to allottees, even during insolvency, subject to compliance with the moratorium framework.

Empowering Homebuyer-Led Resolution Plans

The report recognises homebuyers and their associations as eligible resolution applicants, encouraging their participation in the resolution process.

To support this:

• Procedural flexibility is recommended under CIRP regulations;
• Professional and technical support is encouraged; and
• Evaluation of such plans must be based on feasibility and viability.

Funding the Revival: Interim Finance and Last-Mile Support

Stalled real estate projects often require immediate capital infusion.

The Committee recommends:

• Active use of interim finance as a value-preserving tool;
• Project-wise funding linked to milestones;
• Use of escrow mechanisms for transparency; and
• Leveraging government initiatives such as SWAMIH.

These measures are aimed at ensuring timely completion and value maximisation.

Institutional and Procedural Reforms

To improve efficiency, the report proposes:

• Specialised NCLT benches for real estate matters in high-volume jurisdictions;
• Fast-track disposal of appeals before NCLAT; and
• Expansion of Information Utilities (IUs) to include project-level data integrated with RERA.

The Clean Slate Principle and Regulatory Balance

The report reiterates the clean slate principle, under which an approved resolution plan extinguishes past liabilities not included in the plan.

At the same time, it clarifies that:

• Regulatory authorities retain jurisdiction over future compliance; and
• Better coordination is needed to avoid post-resolution disputes.

Conclusion

The Committee’s recommendations mark a decisive shift toward a more nuanced, sector-specific insolvency framework for real estate.

By prioritising project completion, strengthening financial discipline, and placing homebuyers at the centre of the process, the proposed reforms seek to address the structural limitations of the current regime.

If implemented effectively, these changes could significantly enhance predictability, efficiency, and stakeholder confidence in real estate insolvency transforming it from a process of value erosion to one of value preservation and delivery.

Cross-border commercial disputes often culminate in foreign judgments, but their enforceability in India is far from automatic. In a recent and significant decision, the Supreme Court of India has revisited the contours of foreign decree enforcement, clarifying both the substantive and regulatory thresholds that must be satisfied before such decrees can be executed within India.

In Messer Griesheim GmbH (now Air Liquide Deutschland GmbH) v. Goyal MG Gases Pvt. Ltd. (2026), the Court examined the interplay between Sections 13 and 44A of the Code of Civil Procedure, 1908 and the regulatory restrictions under the Foreign Exchange Regulation Act, 1973 (FERA), as preserved under the Foreign Exchange Management Act, 1999.

The ruling does more than resolve a dispute it draws a clear line between procedural enforceability and substantive justice, while reaffirming the continued relevance of foreign exchange regulations in execution proceedings.

The Dispute: A Cross-Border Guarantee and Its Fallout

The case traces its origins to a 1995 joint venture arrangement between a foreign company and an Indian entity. As part of the financial structuring, the foreign partner furnished a guarantee to secure an external commercial borrowing facility obtained by the Indian company.

When the Indian company defaulted, the foreign guarantor discharged a substantial liability—approximately USD 4.78 million and sought reimbursement. With no recovery forthcoming, the guarantor initiated proceedings in the English courts, eventually obtaining a summary judgment directing payment of the outstanding amount.

Armed with this decree, the guarantor approached Indian courts for enforcement under Section 44A CPC.

The Core Question: Was the Foreign Judgment “On Merits”?

At the heart of the dispute lay a deceptively simple question: Can a foreign judgment obtained through summary proceedings be enforced in India? The Supreme Court answered this in the negative.

Under Section 13 of the CPC, a foreign judgment is conclusive only if it is rendered “on the merits of the case.” The Court emphasised that this requirement is not a mere formality—it goes to the root of fairness and adjudicatory integrity. In the present case, the respondent had raised substantive defences before the English Court, supported by corporate records such as balance sheets and board resolutions. These documents, on their face, suggested that no liability was owed.

However, the English Court proceeded under a summary procedure, declining to grant leave to defend. The Supreme Court found this problematic. Where a bona fide and “realistic” defence exists, denial of an opportunity to contest amounts to a failure of natural justice. In other words, a judgment cannot be said to be “on merits” if it bypasses a meaningful evaluation of contested issues. The Court held that the summary nature of the proceedings effectively denied the respondent a fair opportunity to present its case, thereby attracting the exception under Section 13(b) CPC.

Beyond Procedure: The Role of Indian Law and Natural Justice

The Court went further, examining whether the foreign judgment aligned with other requirements under Section 13 CPC.

It found that:

• The judgment failed to adequately consider applicable Indian law, particularly RBI-imposed conditions governing the guarantee;
• The proceedings were opposed to natural justice, given the denial of leave to defend; and
• The claim itself was linked to arrangements that required compliance with Indian regulatory frameworks.

These findings brought the case within multiple exceptions under Section 13, reinforcing the principle that foreign judgments must withstand scrutiny not only on form, but also on substance.

The Regulatory Layer: RBI Permission and FERA Compliance

Even if the decree had passed the “on merits” test, another hurdle remained—compliance with foreign exchange regulations.

The Court examined Section 47 of FERA, which restricts enforcement actions involving foreign exchange without prior approval of the Reserve Bank of India or the Central Government.

Importantly, the Court drew a nuanced distinction:

• There is no prohibition on initiating legal proceedings in India;
• However, execution of a decree involving foreign exchange requires prior regulatory approval.

This interpretation is significant. It ensures that parties retain access to judicial remedies while preserving the State’s control over foreign exchange outflows.

The Court clarified that such regulatory requirements operate at the stage of enforcement, not at the stage of adjudication, thereby maintaining a balance between private rights and public economic policy.

Implications: A Cautionary Note for Cross-Border Transactions

The judgment carries important implications for businesses and legal practitioners involved in international transactions:

• Summary judgments from foreign courts may not be easily enforceable in India, particularly where substantive disputes exist;
• Parties must ensure that foreign proceedings provide a fair and meaningful opportunity to contest;
• Regulatory approvals, especially in cases involving foreign exchange, remain critical at the enforcement stage; and
• Contractual arrangements involving guarantees and cross-border obligations must be carefully structured in light of Indian regulatory constraints.

Conclusion

The Supreme Court’s decision is a timely reminder that enforcement of foreign judgments in India is not a mechanical exercise. It requires a careful balancing of procedural fairness, substantive justice, and regulatory compliance. By refusing to enforce the decree, the Court has reaffirmed that expediency in foreign proceedings cannot override the fundamental principles of natural justice, nor can private contractual arrangements bypass sovereign regulatory controls. For stakeholders in cross-border commerce, the message is clear: enforceability begins not at the stage of execution, but at the stage of how the dispute is adjudicated in the first place.

India’s online gaming sector has entered a decisive regulatory phase. On 22 April 2026, the Ministry of Electronics and Information Technology (MeitY) notified the Promotion and Regulation of Online Gaming Rules, 2026, pursuant to the Promotion and Regulation of Online Gaming Act, 2025. The framework, set to come into force from 1 May 2026, represents a comprehensive effort to bring clarity, accountability, and oversight to one of India’s fastest-growing digital sectors.

The final rules mark a clear departure from the earlier draft regime, introducing a structured, determination-based regulatory model while balancing innovation with user protection.

A Centralised Regulator: Online Gaming Authority of India

At the heart of the framework is the establishment of the Online Gaming Authority of India under Section 8 of the Act. The Authority, chaired by a senior MeitY official and comprising representatives from key ministries including Home Affairs, Finance, Law & Justice, and Sports reflects a multi-disciplinary regulatory approach.

This institutional design signals that online gaming is no longer viewed purely as a technology issue, but as a sector intersecting finance, law enforcement, consumer protection, and sports governance.

In parallel, the government has empowered cyber cell officers across States and Union Territories to investigate offences under the Act, strengthening enforcement capabilities at both central and state levels.

From Voluntary to Conditional Regulation

One of the most notable shifts from the draft rules is the move away from a largely voluntary registration framework.

Under the earlier draft:

• Online social games could operate without mandatory registration;
• Registration was optional in several cases.

The final rules introduce a conditional registration model, where registration becomes mandatory only if the Central Government specifically notifies a game or category of games, based on factors such as:

• Risk of harm to users (especially children);
• Scale of participation;
• Volume and nature of financial transactions; and
• Public interest considerations.

This approach allows for targeted regulation, avoiding over-regulation while retaining the ability to intervene in high-risk segments.

The Core Mechanism: Determination of Games

A defining feature of the new framework is the “determination process” under Rule 8, which empowers the Authority to classify games as:

• Online money games,
• E-sports, or
• Online social games.

This classification is critical because it determines the applicable regulatory obligations.

The Authority evaluates multiple factors, including:

• Whether users are required to pay fees, deposits, or stakes;
• Whether there is an expectation of monetary gain or reward;
• The structure of the game’s revenue model; and
• The manner in which rewards or in-game assets can be monetised or transferred.

Importantly, determination is not mandatory for all games—it is triggered only in specific situations, such as when directed by the Authority or when a game seeks classification as an e-sport.

Registration Framework: More Structured, More Durable

Where registration is required, the process is now clearly defined under Rules 12 and 13:

• Registration must be obtained separately for each game;
• Applications must be filed in a prescribed digital format;
• The Authority undertakes a determination process before granting approval.

For e-sports, registration must be granted within 90 days, provided the game is recognised under the National Sports Governance framework.

A key improvement is the extension of validity from five years (draft rules) to ten years, offering greater regulatory certainty for gaming companies.

Grievance Redressal: Strengthening User Rights

The rules mandate that all online gaming service providers offering social games or e-sports must establish a functional grievance redressal mechanism.

Users dissatisfied with the platform’s response can escalate complaints to the Authority, which is required to:

• Dispose of complaints within 30 days;
• Provide an opportunity of hearing to parties; and
• Issue appropriate corrective or remedial directions.

An appeal mechanism is also available before an Appellate Authority, ensuring a multi-tiered dispute resolution framework.

Enforcement and Penalties: A Strong Compliance Backbone

The rules introduce a robust penalty and enforcement framework under Rule 21.

Upon receiving a complaint or acting suo motu, the Authority may:

• Issue notices and conduct proceedings (primarily in digital mode);
• Direct investigation by authorised officers; and
• Initiate formal inquiry where necessary.

If non-compliance is established, the Authority may:

• Impose monetary penalties;
• Suspend or cancel registration; or
• Prohibit the offering or promotion of the game.

This enforcement architecture ensures that regulatory oversight is not merely advisory but backed by meaningful consequences.

Balancing Innovation and Regulation

The final framework reflects a careful balancing act. On one hand, it avoids blanket regulation by adopting a risk-based, determination-driven approach. On the other, it introduces sufficient safeguards to address concerns around:

• User protection;
• Financial risks; and
• Misuse of gaming platforms.

By distinguishing between different categories of games and linking regulatory obligations to risk factors, the framework allows the industry to continue innovating while remaining accountable.

Conclusion

The Online Gaming Rules, 2026 mark a turning point in India’s approach to regulating digital gaming. Moving beyond the uncertainties of the draft regime, the final framework introduces clarity, structure, and institutional oversight.

For industry participants, the message is clear: compliance will now depend not only on the nature of the game but also on its economic model, user impact, and regulatory classification.

As the rules come into force, their real test will lie in implementation particularly in how the Authority exercises its determination powers and balances enforcement with industry growth.

India’s micro, small and medium enterprises (MSMEs) are increasingly facing severe operational and financial stress as geopolitical tensions in the Gulf region disrupt global supply chains. On 7 April 2026, industry bodies representing MSMEs engaged in government and public sector contracts formally urged the Central Government to invoke force majeure provisions to mitigate the impact of these disruptions.

The demand reflects growing concern across sectors that unforeseen geopolitical events are rendering contractual performance commercially and operationally untenable, particularly for smaller enterprises with limited financial resilience.

Context: Supply Chain Disruptions and Rising Costs

The ongoing disruptions have significantly impacted the availability of raw materials, logistics efficiency, and export timelines. MSMEs—many of which depend heavily on imported inputs or export-driven markets—have been disproportionately affected.

Key challenges include:

• Sharp escalation in logistics costs, with container freight rates reportedly increasing by up to 250%;
• Extended transit timelines, rising from the usual 10–15 days to 40–60 days for Gulf-bound shipments; and
• Increased insurance and risk costs, with war-risk premiums rising substantially.

Sector-specific concerns have also emerged. Container train operators have sought waivers on stabling and empty wagon haulage charges, while air cargo operators have requested relief for stranded shipments. These developments highlight the widespread disruption across logistics and trade ecosystems.

Force Majeure: Legal Framework and Applicability

Force majeure is a contractual doctrine that provides relief where performance becomes impossible due to events beyond the control of the parties, such as war, natural disasters, or government actions.

Typically, to successfully invoke force majeure, the affected party must demonstrate:

1. Unforeseeability: The event was not reasonably foreseeable at the time of contract formation;
2. Externality and Lack of Control: The event was beyond the control of the affected party; and
3. Impossibility of Performance: The event directly prevented performance not merely made it more difficult or expensive.

Indian courts have historically applied a strict standard in assessing such claims. Mere economic hardship or increased cost of performance does not ordinarily qualify as force majeure unless the contract explicitly provides otherwise.

Burden of Proof and Compliance Requirements

The invocation of force majeure is not automatic. The party seeking relief must:

• Provide timely notice to the counterparty, typically within the period specified in the contract;
• Submit documentary evidence demonstrating the occurrence of the force majeure event; and
• Establish a causal link between the event and the inability to perform contractual obligations.

Additionally, the affected party is required to demonstrate that reasonable mitigation efforts were undertaken to minimise the impact of the disruption.

For MSMEs, meeting these evidentiary and procedural requirements can be particularly challenging, given resource constraints and fragmented supply chains.

Comparative Reference: COVID-19 Precedent

Industry bodies have drawn parallels with the COVID-19 pandemic, during which the Government of India treated supply chain disruptions as a natural calamity and allowed invocation of force majeure in public procurement contracts.

That precedent provided:

• Extension of timelines;
• Waiver of penalties for non-performance; and
• Relief from strict contractual enforcement.

MSMEs are now seeking similar treatment, arguing that the current geopolitical disruptions characterised by war-like conditions and systemic supply shockswarrant comparable regulatory intervention.

Impact on Key Sectors

The disruptions have had a pronounced impact across multiple industries:

• Export Sector: Approximately 40,000–45,000 export containers, valued at $1–1.5 billion, have been affected;
• Agriculture: Freight costs for agricultural exports, including vegetables, have surged nearly sixfold;
• Basmati Rice Exports: The Middle East accounts for 60–70% of India’s basmati exports, making the sector highly vulnerable;
• Chemicals and Plastics: Up to 50% of chemical trade is reportedly at risk, while raw material prices in the plastics sector have risen by around 60%.

The combined effect of increased costs, delayed shipments, and disrupted supply chains has significantly strained working capital cycles, particularly for smaller enterprises.

Government Response and Policy Considerations

The issue has been raised at a Service Improvement Group (SIG) meeting, where industry stakeholders highlighted the urgency of regulatory intervention.

The Government is currently:

• Examining requests for force majeure recognition;
• Considering timeline extensions and contractual relaxations; and
• Exploring sector-specific relief measures.

Any decision to formally recognise the situation as a force majeure event—particularly for public procurement contracts would have significant implications for contractual enforcement across sectors.

Legal and Commercial Implications

The present situation raises broader questions at the intersection of contract law, public procurement, and economic policy:

• Whether geopolitical disruptions can be uniformly treated as force majeure events;
• The extent to which government intervention should standardise relief across contracts; and
• The balance between contractual certainty and commercial fairness in extraordinary circumstances.

For MSMEs, the issue is not merely legal but existential. Without relief, many enterprises risk default, penalties, and long-term financial distress.

Conclusion

The demand for force majeure relief amid Gulf disruptions reflects the increasing vulnerability of supply chains to geopolitical shocks. While the legal threshold for invoking force majeure remains stringent, the scale and systemic nature of the current disruptions may justify a calibrated policy response.

The Government’s approach in the coming weeks will be critical in determining whether MSMEs receive the necessary relief to navigate these challenges, or whether they must rely solely on contractual remedies within a rigid legal framework.

In either case, the episode underscores the need for greater resilience, contractual foresight, and adaptive regulatory mechanisms in an increasingly volatile global trade environment.

In a significant boost to India’s startup ecosystem, the Central Government has notified the Startup India Fund of Funds 2.0 (FoF 2.0) with a total corpus of ₹10,000 crore, aimed at catalysing venture capital investments across sectors and stages. The scheme builds upon the earlier framework introduced under the Startup India Action Plan and seeks to address structural gaps in funding access, particularly for early-stage and deep-tech ventures.

The initiative reflects a renewed policy focus on innovation-driven manufacturing, emerging technologies, and long-gestation sectors, while also strengthening institutional mechanisms for capital deployment.

Background: The First Fund of Funds (FoF 1.0)

The original Startup India Fund of Funds, launched in 2016, played a catalytic role in mobilising capital within the startup ecosystem.

Key outcomes of FoF 1.0 include:

• Investments of over ₹25,500 crore;
• Deployment through 145 SEBI-registered Alternative Investment Funds (AIFs); and
• Funding support to more than 1,370 startups.

Under this model, the government did not invest directly in startups. Instead, it contributed to the corpus of AIFs, which in turn invested in equity and equity-linked instruments of recognised startups. These AIFs also provided mentorship and strategic guidance to portfolio companies.

While the model ensured professional fund management and market-based investment decisions, it also revealed certain structural limitations.

Key Challenges Under FoF 1.0

Despite its success, several issues emerged in the implementation of FoF 1.0:

• Delayed capital deployment, with gaps between commitments and actual disbursements;
• Limited accessibility for early-stage startups, particularly outside major startup hubs;
• A funding skew toward later-stage ventures and select sectors; and
• Underrepresentation of deep-tech and long-gestation innovation sectors.

These challenges highlighted the need for a more flexible and inclusive framework, which has informed the design of FoF 2.0.

Key Features of FoF 2.0

1. Expanded Investment Scope

FoF 2.0 significantly broadens the scope of eligible investments by targeting:

• Deep-tech startups;
• Technology-driven and innovation-led manufacturing;
• Early growth-stage ventures; and
• Sector-agnostic and stage-agnostic AIFs.

This expansion aims to address funding gaps in areas that are critical for India’s long-term technological and industrial growth.

2. Continued AIF-Led Investment Model

The scheme continues to operate through SEBI-registered AIFs, maintaining the indirect investment approach.

Under this structure:

• Government funds are deployed into AIFs;
• AIFs invest in startups through structured investment strategies; and
• Portfolio companies benefit from both capital and institutional mentorship.

This model preserves market discipline while leveraging professional fund management expertise.

3. Greater Operational Flexibility

FoF 2.0 introduces enhanced flexibility in fund design and deployment:

• Support for AIFs with larger corpus sizes;
• Accommodation of longer fund tenures, particularly for deep-tech and infrastructure-intensive sectors; and
• Broader eligibility criteria for participating funds.

These measures are expected to improve alignment with the capital requirements of long-gestation technologies.

4. Strengthened Institutional Framework

The revised scheme provides for a more robust governance structure:

• An Empowered Committee (EC) with inter-ministerial representation will provide strategic direction and oversight;
• Multiple Implementation Agencies (IAs) may be appointed to enhance execution capacity.

This multi-layered structure is designed to improve efficiency, monitoring, and accountability in fund deployment.

5. Ecosystem Development Allocation

A notable innovation under FoF 2.0 is the allocation of 5% of returns toward ecosystem development initiatives.

These include:

• Capacity building and training programmes;
• Startup mentorship and incubation support;
• Development of plug-and-play infrastructure; and
• Regulatory awareness and facilitation.

This reflects a shift from purely capital-focused intervention to a holistic ecosystem development approach.

Policy Rationale and Strategic Importance

FoF 2.0 aligns with India’s broader economic priorities, including:

• Strengthening domestic innovation capabilities;
• Promoting manufacturing-led growth;
• Enhancing participation in global technology value chains; and
• Supporting the transition toward a knowledge-driven economy.

By targeting deep-tech and early-stage ventures, the scheme addresses a critical gap where private capital is often limited due to higher risk and longer gestation periods.

Implications for Startups and Investors

For Startups

• Improved access to early-stage and growth capital;
• Greater opportunities in deep-tech and manufacturing sectors;
• Enhanced support through mentorship and ecosystem initiatives.

For AIFs and Investors

• Increased capital availability for deployment;
• Greater flexibility in fund structuring and timelines;
• Opportunities to invest in emerging and underserved sectors.

Conclusion

The notification of Startup India Fund of Funds 2.0 marks an important evolution in India’s startup financing architecture. By addressing the limitations of the earlier framework and expanding the scope to include deep-tech and early-stage innovation, the Government has signalled a more targeted and forward-looking approach to ecosystem development.

While the success of the scheme will depend on efficient implementation and timely capital deployment, FoF 2.0 has the potential to play a transformative role in bridging funding gaps, strengthening innovation capacity, and accelerating India’s startup-led growth trajectory.

The Central Electricity Regulatory Commission (CERC), through its notification dated 24 March 2026, has notified the Central Electricity Regulatory Commission (Terms and Conditions for Renewable Energy Certificates for Renewable Energy Generation) (First Amendment) Regulations, 2026, introducing significant changes to the Renewable Energy Certificate (REC) framework under the principal 2022 Regulations.

The amendments are aimed at broadening participation in the REC mechanism, strengthening compliance pathways, and aligning the regulatory framework with emerging market instruments such as Virtual Power Purchase Agreements (VPPAs).

Alignment with Evolving Regulatory Framework

The Amendment Regulations introduce several new definitions to harmonise the REC regime with existing statutory and market frameworks. These include:

• “Designated Consumer”, aligned with the Energy Conservation Act, 2001;
• “Renewable Consumption Obligation (RCO)”, reflecting the growing shift toward consumption-linked compliance; and
• Virtual Power Purchase Agreements (VPPAs), aligned with the Power Market Regulations, 2021.

This definitional expansion signals a broader transition from a generation-centric regime to a more integrated consumption and market-based renewable compliance framework.

Expanded Eligibility: Inclusion of Captive Renewable Generators

One of the most consequential changes lies in the amendment to Regulation 4, which expands eligibility for participation in the REC mechanism.

The revised framework now permits:

• Captive renewable generating stations that do not meet the strict criteria under the Electricity Rules, 2005,
• Provided they undertake self-consumption of renewable energy.

This clarification significantly enlarges the scope of eligible participants, bringing within the REC ecosystem a category of captive generators that were previously excluded due to technical non-compliance with captive plant definitions.

The change is expected to:

• Increase REC market liquidity; and
• Encourage broader participation by industrial and commercial renewable consumers.

Time-Bound REC Issuance: Strengthening Procedural Discipline

The Amendment Regulations introduce a strict procedural timeline for REC issuance, enhancing compliance discipline.

Under the revised framework:

• Distribution licensees and open-access consumers must apply for REC issuance within three months from certification by the concerned State Commission;
• The certification must confirm excess renewable procurement beyond Renewable Purchase Obligation (RPO) requirements;
• Failure to adhere to this timeline will result in denial of certificate issuance.

This provision addresses delays in REC issuance and ensures more efficient tracking of renewable procurement compliance.

Revised Multiplier Framework: From Static to Principles-Based Approach

The Amendment Regulations also introduce a revised framework for REC multipliers under Regulation 12, which determine the number of certificates issued per unit of renewable energy generated.

For Projects Commissioned Between December 5, 2022 and March 24, 2026

• Solar and on-shore wind: Multiplier of 1
• Hydro: Multiplier of 1.5
• Municipal solid waste and non-fossil fuel-based cogeneration: Multiplier of 2
• Biomass and biofuel-based projects: Multiplier of 2.5

For Projects Commissioned Thereafter

Multipliers will be determined through a principles-based methodology outlined in Appendix-1, considering:

• Tariff range;
• Technology maturity; and
• Capacity credit or peak-support contribution.

This transition introduces regulatory flexibility, allowing REC incentives to adapt to technological advancements and evolving grid requirements.

Validity and Long-Term Certainty

The assigned multiplier will remain valid for 15 years from the date of commissioning, after which:

• Certificates will be issued at the base rate of one REC per megawatt hour (MWh).

This structure balances long-term investment certainty with gradual rationalisation of incentives, ensuring continued participation without overcompensation.

Recognition of Virtual Power Purchase Agreements (VPPAs)

A significant innovation under the Amendment Regulations is the introduction of Regulation 14A, governing RECs issued under Virtual Power Purchase Agreements (VPPAs).

Key features include:

• RECs generated from VPPA-linked projects will be automatically transferred to the consumer or designated consumer;
• Such certificates may be used for compliance with RPO or RCO obligations;
• Upon transfer, the certificates will be extinguished.

Importantly:

• Excess certificates beyond compliance requirements may be carried forward to subsequent years;
• However, such excess RECs cannot be traded on power exchanges.

This ensures that VPPA-linked RECs serve a compliance function rather than a trading instrument, preserving market integrity.

Shift Toward Consumption-Based Compliance

The introduction of Renewable Consumption Obligation (RCO) and recognition of VPPAs reflect a broader shift toward consumption-linked renewable compliance.

Traditionally, renewable obligations in India have been structured around procurement (RPO). The inclusion of RCO suggests a gradual evolution toward:

• Greater accountability on the consumption side;
• Increased participation by large energy consumers; and
• Integration of corporate renewable procurement strategies into regulatory frameworks.

Implications for Stakeholders

For Renewable Energy Developers

• Expanded eligibility enhances market access and revenue opportunities;
• Principles-based multipliers provide future flexibility but may introduce variability

For Distribution Licensees and Open Access Consumers

• Stricter timelines necessitate efficient compliance systems;
• Opportunities to monetise excess renewable procurement remain subject to procedural discipline.

For Industrial Consumers and Corporates

• Recognition of VPPAs provides a structured regulatory pathway for corporate renewable procurement;
• Ability to meet RPO/RCO obligations through VPPAs enhances flexibility.

Conclusion

The First Amendment to the REC Regulations, 2026 represents a measured and forward-looking update to India’s renewable energy compliance framework. By expanding eligibility, tightening procedural timelines, introducing a flexible multiplier regime, and recognising emerging instruments such as VPPAs, CERC has aligned the REC mechanism with evolving market realities.

The reforms are likely to enhance both participation and compliance discipline, while supporting India’s broader transition toward a more diversified and market-driven renewable energy ecosystem.

In a significant step toward enhancing consistency and global alignment in insolvency valuations, the Insolvency and Bankruptcy Board of India (IBBI), through a circular dated 1 April 2026, has notified the International Valuation Standards (IVS) issued by the International Valuation Standards Council (IVSC) as the applicable standards for all valuations conducted under the Insolvency and Bankruptcy Code, 2016 (IBC).

The circular, which comes into effect immediately, mandates that all valuations carried out under the Code and its regulations must adhere to IVS, marking a shift toward internationally recognised valuation principles in India’s insolvency framework.

Objective: Standardisation and Global Alignment

Valuation plays a central role in insolvency proceedings, influencing key outcomes such as:

• Determination of fair value and liquidation value;
• Assessment of recovery prospects; and
• Decision-making by the Committee of Creditors (CoC).

The adoption of IVS aims to:

• Ensure uniformity and consistency across valuation exercises;
• Enhance transparency and credibility of valuation reports; and
• Align India’s insolvency ecosystem with global best practices.

This move is particularly relevant in complex insolvency cases involving cross-border assets or international investors.

Scope of Applicability

The notified standards will apply across multiple regulations under the IBC framework, covering various stages of insolvency and liquidation processes.

1. Corporate Insolvency Resolution Process (CIRP)

Under Regulation 35(1)(c) of the CIRP Regulations, 2016:

• Registered valuers are required to determine the fair value of assets;
• Such valuation must be based on notified valuation standards; and
• It must follow physical verification of assets.

With the notification, IVS will now serve as the governing benchmark for such valuations.

2. Liquidation Process

Under Regulation 35(3) of the Liquidation Regulations, 2016:

• Where fresh valuation is required, the liquidator must appoint registered valuers;
• The valuers must determine the realisable value of assets in accordance with notified standards.

This ensures that liquidation valuations are conducted using consistent and internationally accepted methodologies.

3. Voluntary Liquidation

Under Regulation 3(1)(b) of the Voluntary Liquidation Regulations, 2017:

• The declaration of solvency must be supported by: Audited financial statements; A valuation report prepared by a registered valuer; and Disclosures of pending proceedings or litigations.

Such valuation reports must now be aligned with IVS, ensuring accuracy and reliability in solvency declarations

4. Pre-Packaged Insolvency Resolution Process (PPIRP)

Under Regulation 39(1)(c) of the Pre-Packaged Insolvency Resolution Process Regulations, 2021:

• Registered valuers are required to determine both fair value and liquidation value;
• The valuation must follow physical verification and adhere to notified standards.

The incorporation of IVS strengthens valuation consistency even in pre-pack insolvency scenarios, where timelines are compressed.

5. Bankruptcy of Personal Guarantors

Under Regulation 30(2) of the Bankruptcy Process for Personal Guarantors Regulations, 2019:

• The bankruptcy trustee is required to obtain valuation of assets through a registered valuer where necessary.

The application of IVS ensures that valuations in personal insolvency cases are also conducted with standardised methodologies.

Implications for Valuers and Insolvency Professionals

The notification of IVS has several important implications:

For Registered Valuers

• Valuers must align their methodologies, assumptions, and reporting formats with IVS principles;
• Greater emphasis will be placed on documentation, transparency, and professional judgment;
• Valuation reports may become more detailed and structured.

For Insolvency Professionals (IPs)

• Increased reliance on robust and standardised valuation reports;
• Improved comparability across valuation exercises;
• Enhanced confidence in valuation outcomes during resolution and liquidation processes.

For Creditors and Investors

• Greater transparency and consistency in valuation outcomes;
• Improved decision-making based on reliable asset valuation benchmarks;
• Increased attractiveness of the insolvency framework for global investors.

Significance in the Broader Insolvency Framework

The adoption of IVS reflects a broader trend within India’s insolvency regime toward:

• Professionalisation of insolvency processes;
• Integration with international standards and practices; and
• Strengthening institutional credibility.

Valuation disputes have often been a source of contention in insolvency proceedings. The move toward a standardised framework may help reduce such disputes by providing clear methodological benchmarks.

Conclusion

The IBBI’s notification of International Valuation Standards marks a significant milestone in the evolution of India’s insolvency framework. By mandating globally recognised valuation norms across all insolvency processes, the regulator has reinforced the principles of transparency, consistency, and credibility.

As insolvency proceedings continue to grow in complexity and scale, the adoption of IVS is likely to play a crucial role in ensuring that valuation outcomes remain robust, defensible, and aligned with global best practices.

In a recent order dated 24 March 2026, the Competition Commission of India (CCI) dismissed an information filed against Google India Private Limited under Section 26(2) of the Competition Act, 2002, holding that no prima facie case of abuse of dominant position under Section 4 was made out.

The case provides important clarity on the intersection of platform governance and competition law, particularly in the context of enforcement of platform policies by dominant digital intermediaries.

Factual Background

The information was filed by M/s Zucol Solutions Private Limited, a company engaged in software development and mobile application services. The informant challenged the termination of its Google Play developer account, alleging violations of both Sections 3 and 4 of the Competition Act.

The informant contended that:

• The termination was arbitrary and non-transparent;
• It was carried out without a fair opportunity of appeal; and
• It resulted in financial loss, reputational harm, and exclusion from the Android app distribution ecosystem.

The dispute arose from an application titled “Pobreflix – Series, Movies”, which was found to be in violation of Google’s Developer Program Policies (DPP) and Developer Distribution Agreement (DDA). The informant claimed that the application had been developed by an external contractor.

Subsequently, the informant created another developer account to host a separate application (BTHAWK), which was also terminated by Google due to its linkage with the earlier account. This led to allegations of denial of market access and abuse of dominance.

Relevant Market and Dominance

The CCI delineated the relevant market as the:

“Market for app stores for Android OS in India.”

The Commission acknowledged that Google holds a dominant position in this market, consistent with its earlier findings in similar cases involving digital platform ecosystems.

However, the existence of dominance alone is insufficient-what must be established is abuse of such dominance.

Key Findings of the Commission

1. Inconsistencies and Lack of Material Disclosure

A significant factor influencing the Commission’s decision was the presence of material inconsistencies and deficiencies in the informant’s submissions.

These included:

• Contradictory statements regarding ownership of the impugned application;
• Failure to identify the actual developer responsible for the app;
• Incomplete disclosure of communications with Google; and
• Suppression of material facts, including: Reinstatement of the original developer account, and Creation of additional accounts.

The Commission viewed these deficiencies as undermining the credibility of the allegations.

2. Policy-Based Enforcement by Google

The CCI observed that Google’s actions were consistent with its established platform policies, including:

• Malware Policy, and
• Relation Ban Policy.

Importantly, the Commission noted that:

• The informant was provided an opportunity to appeal; and
• The developer account was eventually reinstated.

Despite this reinstatement, the informant did not re-list its applications, further weakening its claim of exclusion from the market.

3. No Evidence of Anti-Competitive Conduct

Relying on its earlier jurisprudence, the Commission reiterated that:

Enforcement of platform policies, even by a dominant entity, does not automatically amount to abuse of dominance.

The Commission found:

• No evidence of discriminatory or exclusionary conduct;
• No denial of market access in a competition law sense; and
• No indication of an appreciable adverse effect on competition (AAEC).

4. Individual Grievance vs. Competition Issue

A crucial conclusion of the CCI was that the dispute essentially related to an individual contractual grievance, rather than a broader competition law issue.

The Commission clarified that:

• Not every dispute with a dominant enterprise falls within the scope of competition law;
• Competition law is concerned with market-wide harm, not isolated disputes unless they have systemic implications.

Legal Position Reaffirmed

The order reinforces several important principles in Indian competition law:

• Dominance is not per se unlawful; abuse must be demonstrated;
• Platform governance and policy enforcement, when applied uniformly, are not anti-competitive;
• Competition law is not a substitute for contractual remedies; and
• A clear distinction must be maintained between individual grievances and market distortion.

Implications for Digital Platforms and Developers

1.     For Digital Platforms

The order provides regulatory comfort to digital platform1s that:

·       Enforcement of uniform and transparent policies is permissible;

·       Policy-based account suspensions or terminations, if justified, will not automatically attract competition liability.

2.     For Developers and Market Participants

The case highlights the importance of:

·       Maintaining complete and consistent disclosures before regulatory authorities;

·       Understanding that disputes arising from platform policies may need to be pursued under contractual or civil remedies, rather than competition law.

Conclusion

The CCI’s decision to close the case under Section 26(2) underscores the Commission’s measured approach in digital market regulation. While acknowledging Google’s dominance in the Android app store ecosystem, the Commission declined to intervene in the absence of demonstrable abuse or market-wide harm.

The ruling reaffirms that competition law is not a forum for resolving individual platform disputes, and that enforcement action will be triggered only where conduct has broader implications for competition in the market.

The Ministry of Corporate Affairs (MCA), through its advisory dated 12 March 2026, has reiterated and clarified critical principles governing company and LLP name reservation and change applications, in response to recurring deficiencies observed in filings.

The advisory is aimed at reducing avoidable rejections and improving compliance with the naming framework under the Companies Act, 2013 and the applicable rules governing incorporation and name approval. It reflects a broader regulatory push toward greater diligence at the pre-incorporation stage and more disciplined adherence to statutory naming norms.

Distinctiveness: The Core Requirement

At the heart of the MCA’s advisory is the reiteration that proposed names must be truly distinctive.

Applicants are required to ensure that the proposed name:

• Does not closely resemble an existing company or LLP name;
• Is not phonetically similar, even if spelled differently; and
• Is sufficiently unique to avoid confusion with established entities.

The MCA has emphasised that mere variation in spelling, punctuation, or formatting does not satisfy the test of distinctiveness. Names that “sound similar” to existing entities are likely to be rejected. This reinforces the long-standing principle that name availability is not just a technical exercise but a substantive test of uniqueness.

NOC Not a Cure for Similarity

A particularly important clarification in the advisory is that submission of a No Objection Certificate (NOC) from an existing company or LLP will not validate an otherwise identical or deceptively similar name.

Even where consent is provided, MCA has clarified that:

• Names that are identical or closely similar remain liable to rejection;
• The regulatory objective of avoiding public confusion cannot be overridden by private consent.

This marks a clear departure from the common practice where applicants relied on NOCs to overcome similarity objections.

Restricted Words and Regulatory Approvals

The advisory reiterates restrictions on the use of certain sensitive or regulated words in company names.

Names must not include words or expressions that suggest:

• Association with the Central Government, State Government, or
• Any local authority or statutory body.

Further, the use of specific words—such as:

• “Bank”
• “Insurance”
• “Company Secretaries”
• “Chartered Accountants”

requires prior approval or NOC from the relevant regulator or professional body at the time of name reservation. Failure to obtain such approvals at the initial stage is likely to result in rejection.

Trademark Considerations: A Mandatory Pre-Check

The MCA has also emphasised the need for mandatory trademark due diligence before applying for name reservation.

Applicants are required to:

• Compare the proposed name with registered trademarks;
• Match the proposed business activity (NIC code) with the relevant trademark class; and
• Ensure that no identical or similar trademark exists in the same class.

Where such similarity exists, the name may be rejected unless:

• A valid NOC from the trademark owner is obtained; and
• The use does not otherwise violate naming rules.

This requirement highlights the increasing convergence between company law and intellectual property considerations in name approval.

Cooling-Off Periods for Reuse of Names

The advisory also reiterates restrictions on the reuse of names previously associated with dissolved or inactive entities.

Specifically:

• Names identical to those of a company dissolved through liquidation or struck off cannot be used during the prescribed cooling-off period;
• Similarly, names of LLPs under liquidation or struck off are restricted; and
• The old name of an existing company cannot be reused for a period of three years from the date of name change, subject to specified exceptions.

These provisions are intended to prevent misuse of legacy names and avoid confusion in the corporate registry.

Even Minor Changes Require Fresh Approval

A notable clarification relates to name change applications.

The MCA has clarified that even minor alterations, such as:

• Removal of punctuation (e.g., “Indi-Tech” to “Inditech”),
• Changes in spacing or formatting,

are treated as a change of name, requiring fresh approval through Form RUN (Reserve Unique Name).

This reinforces that any modification affecting the legal identity of the company name must go through the formal approval process.

Regulatory Objective: Reducing Rejections and Enhancing Compliance

The advisory reflects MCA’s intent to address the high rate of rejections in name reservation applications, which often arise due to:

• Inadequate due diligence by applicants;
• Over-reliance on superficial name variations; and
• Failure to consider trademark and regulatory restrictions.

By reiterating these principles, the MCA aims to promote:

• Better quality applications;
• Faster processing timelines; and
• Greater consistency in name approval decisions.

Conclusion

The MCA’s latest advisory serves as an important reminder that company naming is a compliance-driven process requiring careful legal and commercial evaluation. The emphasis on distinctiveness, trademark alignment, regulatory approvals, and procedural discipline underscores the need for applicants to adopt a more structured approach before filing name reservation applications. For professionals advising on incorporation and corporate restructuring, the advisory highlights the importance of comprehensive pre-filing checks to avoid delays and rejections. As the regulatory framework becomes more stringent and integrated with intellectual property norms, the process of choosing a company name is no longer merely creative it is fundamentally legal.

In a forward-looking move addressing the intersection of artificial intelligence and competition law, the Competition Commission of India (CCI) has issued a guidance note recommending self-audits of AI systems by companies. The note, released alongside the Market Study on Artificial Intelligence and Competition, signals a shift toward preventive and compliance-driven regulation in India’s rapidly evolving digital economy.

As AI systems increasingly influence pricing, market access, consumer behaviour, and platform dynamics, the CCI’s initiative reflects a growing recognition that competition risks must be addressed at the design and deployment stage not merely through ex-post enforcement.

AI and Competition: Emerging Regulatory Concerns

The integration of AI into business processes has introduced new forms of competition risks, including:

• Algorithmic collusion or tacit coordination;
• Bias in automated decision-making affecting market access;
• Preferential treatment within digital platforms; and
• Data-driven barriers to entry for smaller players.

The Market Study, conducted through the Management Development Institute Society (MDIS), highlights that AI-driven market structures can potentially distort competitive neutrality if left unchecked. It also underscores the need for policy interventions that ensure fair access to AI infrastructure and capabilities.

A Preventive Approach: Self-Audit of AI Systems

Rather than prescribing rigid regulatory mandates, the CCI has adopted a principles-based guidance approach, encouraging companies to undertake internal self-audits of their AI systems.

The objective is to enable enterprises to:

• Identify potential competition risks early;
• Ensure compliance with competition law principles; and
• Embed accountability within AI governance frameworks.

Importantly, the guidance applies across the entire lifecycle of AI systems, including:

• Design and development;
• Deployment and use; and
• Monitoring and oversight.

This lifecycle-based approach ensures that competition concerns are addressed proactively rather than reactively.

Six Core Components of the AI Self-Audit Framework

The CCI’s guidance note outlines six key pillars forming the backbone of the self-audit framework:

1. Governance and Oversight

Companies are encouraged to establish clear governance structures, including defined roles and responsibilities for AI oversight. This includes identifying risk factors and ensuring management-level involvement in AI-related decision-making.

2. Algorithm Design and Development Review

The framework emphasises the need to critically review algorithmic design choices, including:

• Identification and elimination of bias;
• Documentation of design assumptions; and
• Ensuring that system architecture does not facilitate anti-competitive outcomes.

3. Testing for Unintended Competitive Effects

AI systems must be rigorously tested to detect unintended consequences, such as:

• Price alignment across competitors;
• Discriminatory treatment of users or sellers; and
• Market distortions arising from automated decision-making.

4. Monitoring and Control Mechanisms

Ongoing monitoring is essential to ensure that AI systems continue to operate within acceptable competition parameters. Companies must establish controls to detect and correct deviations in real time.

5. Transparency and Explainability

The guidance stresses maintaining transparency in AI operations, including the ability to explain key decisions made by AI systems. This is particularly important in identifying and addressing competition-related concerns.

6. Integration with Compliance Systems

AI governance must be integrated with existing competition compliance frameworks, ensuring alignment with internal policies, training programs, and audit mechanisms.

Implementation Guidance and Compliance Tools

In addition to the conceptual framework, the CCI’s guidance note provides:

• Step-by-step implementation measures for conducting AI self-audits;
• A list of recommended documentation to support compliance; and
• A practical checklist enabling companies to identify potential competition risks proactively.

These tools are designed to assist companies in operationalising the framework without imposing rigid regulatory burdens.

Policy Direction: Balancing Innovation and Competition

The Market Study accompanying the guidance note recognises that AI is a critical driver of innovation and economic growth. At the same time, it highlights the need for policy measures to ensure equitable access to AI infrastructure and capabilities, particularly for smaller firms and new entrants.

By encouraging self-regulation through structured audits, the CCI aims to strike a balance between:

• Promoting innovation, and
• Preventing anti-competitive conduct.

This approach is consistent with global regulatory trends, where competition authorities are increasingly focusing on algorithmic accountability and digital market fairness.

Implications for Businesses

The guidance note has several practical implications for companies deploying AI systems:

• Increased expectation of internal accountability and documentation;
• Need for cross-functional collaboration between legal, technical, and compliance teams;
• Greater emphasis on risk assessment at the design stage; and
• Potential exposure to regulatory scrutiny where AI systems lead to anti-competitive outcomes.

Companies operating in digital markets, e-commerce platforms, fintech, and data-driven sectors are particularly likely to be impacted.

Conclusion

The CCI’s push for AI self-audits marks a significant step toward modernising competition law enforcement in the digital age. By encouraging proactive compliance and embedding competition safeguards within AI systems, the regulator is moving toward a more nuanced and forward-looking regulatory model.

As AI continues to reshape market dynamics, such preventive frameworks will play a crucial role in ensuring that innovation does not come at the cost of fair competition.

The Union Cabinet of India, chaired by Narendra Modi, has approved important amendments to India’s Foreign Direct Investment (FDI) policy governing investments from countries sharing land borders with India. The changes introduce a clearer framework for determining beneficial ownership and establish a defined timeline for approval of investments in critical manufacturing sectors.

The reforms are intended to facilitate greater foreign investment flows, particularly from global funds investing in startups and deep-technology sectors, while continuing to safeguard national interests in sensitive investments.

Background

The policy framework governing investments from land-bordering countries was originally tightened in 2020 issued by the Department for Promotion of Industry and Internal Trade (DPIIT) during the COVID-19 pandemic.

The measure required that any investment from:

·       an entity situated in a country sharing a land border with India; or

·       an investment where the beneficial owner was located in such a country

must receive prior government approval.

The rule was introduced primarily to prevent opportunistic acquisitions of Indian companies during the pandemic, when many firms faced valuation pressures. However, over time, the broad application of these restrictions also affected non-strategic minority investments, particularly from global venture capital and private equity funds with diversified investor bases.

Definition of Beneficial Ownership Introduced

One of the most significant changes approved by the Cabinet is the formal incorporation of a definition and criteria for determining “Beneficial Owner.” The revised framework aligns the definition with the standards prescribed under the Prevention of Money Laundering Rules, 2005, which are widely used by the global investment community.

Key features include:

·       The beneficial ownership test will be applied at the level of the investor entity.

·       Investments where beneficial ownership from land-bordering countries is non-controlling and up to 10% will now be permitted under the automatic route, subject to applicable sectoral caps and entry conditions.

·       Investee companies will be required to report relevant information to DPIIT regarding such investments.

This clarification is expected to remove uncertainty for global investment funds that may have small, non-controlling investors from land-bordering jurisdictions.

60-Day Timeline for Investment Approvals

The Cabinet has also approved a definitive 60-day timeline for processing investment proposals in specified sectors, significantly improving regulatory certainty.

The fast-track approval framework will apply to proposals involving investments from land-bordering countries in manufacturing sectors such as:

·       capital goods

·       electronic capital goods

·       electronic components

·       polysilicon manufacturing

·       ingot-wafer production

These sectors are strategically important for India’s manufacturing ecosystem and supply-chain resilience.

The proposals will be examined through the government approval process but must be processed and decided within 60 days, enabling companies to move forward with investment and technology collaborations more efficiently.

Conditions for Investments in Specified Sectors

The expedited approval mechanism will be subject to certain safeguards. In particular:

·       Majority shareholding and control of the investee entity must remain with resident Indian citizens or Indian-owned and controlled entities.

·       The framework ensures that while foreign investment and technological collaboration are encouraged, strategic control over key sectors remains domestic.

·       The list of sectors eligible for the expedited approval process may also be revised from time to time by the Committee of Secretaries (CoS) under the Cabinet Secretary.

Expected Impact on Investment and Manufacturing

The government expects that the revised framework will help unlock greater foreign investment inflows, particularly in sectors where global capital and technology partnerships are critical. The amendments are expected to:

·       Facilitate investments by global private equity and venture capital funds in Indian startups and deep-technology companies.

·       Support joint ventures and technology collaborations between Indian and international companies.

·       Strengthen domestic manufacturing capabilities in high-value sectors such as electronics and renewable energy supply chains.

·       Enhance India’s integration with global manufacturing and technology supply chains.

·       By introducing regulatory clarity and defined approval timelines, the reforms also advance the broader objective of ease of doing business in India.

Strengthening India’s Manufacturing Ecosystem

The policy change is also aligned with India’s broader industrial strategy aimed at strengthening domestic manufacturing capacity. Increased investment in sectors such as electronics components, capital goods, and solar supply chains is expected to support domestic value addition and improve technological capabilities.

At the same time, the framework ensures that strategic oversight and control remain within the domestic economy, maintaining a balance between investment facilitation and national economic security.

Conclusion

The Cabinet’s approval of amendments to the FDI policy governing investments from land-bordering countries marks a significant recalibration of India’s investment framework. By introducing a clear definition of beneficial ownership and a time-bound approval process for key sectors, the government has sought to remove regulatory uncertainty while maintaining safeguards for sensitive investments.

The reforms are expected to boost investor confidence, attract long-term global capital, and strengthen India’s position as a competitive destination for manufacturing and technology investment.

The Government of India is expected to introduce the Insolvency and Bankruptcy Code (Amendment) Bill, 2025 during the second half of the upcoming budget session of Parliament beginning 9 March 2026, following the submission of the report by the Lok Sabha Select Committee.

The proposed legislation represents the seventh legislative amendment to the Insolvency and Bankruptcy Code, 2016 (IBC), which has undergone periodic refinements since its enactment. The last major amendment to the Code was carried out in 2021, and the present reform initiative seeks to address structural and operational challenges that have emerged over nearly a decade of implementation.

Background: Evolution of India’s Insolvency Framework

Since its introduction, the IBC has fundamentally reshaped India’s insolvency and credit resolution landscape. By creating a creditor-driven resolution mechanism and establishing dedicated adjudicatory forums such as the National Company Law Tribunal (NCLT), the Code sought to resolve distressed assets in a time-bound manner while maximising value for creditors.

Over the years, however, practical challenges have emerged. Delays in resolution proceedings, capacity constraints within adjudicatory forums, and complexities in multi-entity or cross-border insolvency cases have highlighted the need for further legislative refinement.

Recognising these concerns, the Government introduced the Insolvency and Bankruptcy Code (Amendment) Bill, 2025 in the Lok Sabha on 12 August 2025, which was subsequently referred to a Select Committee for detailed examination.

Key Issues the Amendment Bill Seeks to Address

The proposed amendments aim to tackle several persistent concerns affecting the functioning of the insolvency ecosystem, including:

• Prolonged resolution timelines, particularly in liquidation cases;
• Value erosion of distressed assets during extended proceedings;
• Low recovery rates for creditors in certain sectors; and
• Institutional capacity constraints within the NCLT and appellate forums.

These issues have, at times, diluted the time-bound resolution objective that lies at the heart of the IBC framework.

Proposed Structural Reforms

Among the most notable reforms proposed in the Amendment Bill are the introduction of group insolvency mechanisms, cross-border insolvency provisions, and enhanced procedural options for creditors initiating insolvency proceedings.

Group Insolvency Framework

The proposed framework seeks to enable coordinated resolution of financially distressed corporate groups whose operations and liabilities are interlinked across multiple entities. Currently, insolvency proceedings under the IBC operate on a single-entity basis, often resulting in fragmented resolution efforts and sub-optimal value realisation.

A group insolvency mechanism would allow for more coordinated restructuring strategies, thereby improving efficiency and preserving enterprise value.

Cross-Border Insolvency Mechanism

Another significant proposal involves introducing a structured process to deal with cross-border insolvency situations, where distressed companies have assets, creditors, or operations across multiple jurisdictions.

The absence of a comprehensive cross-border insolvency framework has historically complicated proceedings involving multinational corporate groups. The proposed amendments are expected to introduce mechanisms that facilitate cooperation between Indian courts and foreign insolvency authorities.

Enhanced Creditor Participation

The Amendment Bill also proposes additional options enabling creditors to initiate insolvency proceedings and participate more effectively in the resolution process. These reforms are aimed at strengthening creditor confidence while ensuring that viable distressed businesses are resolved efficiently.

Technology-Driven Insolvency Ecosystem

In parallel with legislative reform, the Government has indicated its intention to develop a technology-driven platform for insolvency proceedings. As announced in the Union Budget, the proposed system aims to bring greater transparency, standardisation, and speed to insolvency processes.

The digital infrastructure is expected to streamline case management, improve data accessibility, and facilitate coordination between insolvency professionals, creditors, and adjudicating authorities.

Such technological integration could play a critical role in reducing procedural delays and improving overall efficiency of the insolvency resolution framework.

Performance of the IBC So Far

Since its implementation, the IBC has delivered measurable outcomes. According to government estimates, the framework has facilitated the resolution of more than 1,000 companies, generating direct recoveries exceeding ₹3.3 lakh crore for creditors.

The Code has also helped shift India’s insolvency regime from a debtor-in-possession model toward a creditor-in-control framework, strengthening credit discipline in the broader financial system.

However, the proposed amendments acknowledge that institutional strengthening and procedural reforms remain necessary to fully realise the Code’s objectives.

Implications for India’s Insolvency Ecosystem

If enacted, the Amendment Bill is expected to significantly enhance the operational effectiveness of India’s insolvency framework. By introducing mechanisms for group and cross-border insolvency, improving creditor participation, and strengthening institutional capacity, the reforms aim to address key structural gaps that have surfaced over the past decade.

More broadly, the amendments could:

• Improve resolution timelines;
• Preserve value in distressed assets;
• Strengthen creditor confidence in insolvency processes; and
• Align India’s insolvency regime more closely with evolving global best practices.

Conclusion

The expected introduction of the Insolvency and Bankruptcy Code (Amendment) Bill, 2025 during the upcoming budget session signals the Government’s continued commitment to refining India’s insolvency architecture. As the Code enters its second decade, these reforms are poised to play a critical role in ensuring that the insolvency framework remains robust, efficient, and responsive to the needs of a rapidly evolving economy.

The parliamentary deliberations in the coming weeks will therefore be closely watched by financial institutions, insolvency professionals, and corporate stakeholders alike.

In a significant development for public health regulation in India, the Supreme Court of India on 10 February 2026 urged the Food Safety and Standards Authority of India (FSSAI) to consider mandating front-of-pack (FoP) labelling on packaged food products. The Court indicated that such labelling could include warning symbols for high sugar, sodium, or saturated fat content, alongside a positive front-of-pack logo for healthier products.

The observations were made during proceedings in a petition filed by 3S and Our Health Society, which seeks implementation of a more robust front-of-package warning system to address rising concerns around obesity, diabetes, and lifestyle-related diseases.

Background: The Indian Nutrition Rating Proposal

The matter traces back to draft amendments proposed to the Food Safety and Standards (Labelling and Display) Regulations, 2020, which introduced the concept of an Indian Nutrition Rating (INR). The INR contemplated a star-based rating system (ranging from 0.5 to 5 stars) to reflect the overall nutritional profile of packaged food products.

The objective of the INR was to enable consumers to make informed purchasing decisions by providing simplified nutritional information on the front of packaging. Following public consultation, FSSAI constituted an expert committee to review stakeholder comments and evaluate the feasibility of implementing the INR model.

By an earlier order dated 9 April 2025, the Supreme Court directed the expert committee to submit its recommendations expeditiously.

Compliance Review and Court’s Observations

During the recent hearing, the Court examined compliance with its prior directions. In its affidavit, FSSAI submitted that:

• The expert committee could not pre-emptively assess the feasibility of the INR model; and
• A separate proposal had been introduced in 2025 requiring nutritional information to be displayed in bold letters on packaging.

However, the Court appeared unconvinced that these steps sufficiently addressed the broader issue of consumer awareness and public health protection. Prima facie observing that the process had not yielded concrete regulatory outcomes, the Court urged FSSAI to consider the petitioner’s suggestion of mandatory front-of-pack warning labels, noting that such systems are widely adopted internationally.

FSSAI has been directed to respond within four weeks, signalling judicial insistence on timely regulatory clarity.

Warning Labels vs. Star Ratings: A Regulatory Choice

The debate between star-based nutrition ratings and warning labels is not merely cosmetic—it reflects a fundamental policy choice.

• The INR star-rating system aggregates multiple nutritional parameters into a composite score, providing a relative comparison across products.
• A warning label approach, by contrast, directly flags products exceeding specified thresholds for sugar, sodium, or saturated fats, using cautionary symbols or text.

Public health advocates argue that warning labels are clearer, more intuitive, and less susceptible to consumer misinterpretation than composite ratings. They contend that star-based systems may inadvertently portray highly processed foods as relatively “healthy” if certain parameters are balanced.

The Court’s reference to international practice suggests an awareness of jurisdictions that have adopted bold, black-and-white warning labels to communicate health risks effectively.

Judicial Engagement in Public Health Regulation

The Court’s intervention highlights an evolving trend of judicial oversight in matters concerning food safety and public health. While policy formulation remains within the executive domain, the Court has increasingly emphasised the need for regulatory responsiveness where issues affect large segments of the population.

In the present case, the Court’s observation that the exercise “had not yielded concrete results” underscores a concern that prolonged consultation and deliberation must not result in regulatory stagnation.

At the same time, the Court stopped short of mandating a specific labelling model, instead urging FSSAI to “consider” the proposal thereby preserving institutional balance while nudging regulatory action.

Implications for the Food Industry

If FSSAI proceeds toward a warning-label framework, packaged food manufacturers may face:

• Reformulation pressures to reduce sugar, sodium, and saturated fat content;
• Packaging redesign costs;
• Increased scrutiny of health claims and marketing practices; and
• Potential reputational consequences for products carrying warning symbols.

Conversely, a positive front-of-pack logo for healthier products may create incentives for innovation in nutrition-focused product development.

Given the four-week timeline granted by the Court, industry stakeholders will be closely monitoring FSSAI’s response.

Conclusion

The Supreme Court’s urging of FSSAI to consider front-of-pack warning labels marks a critical juncture in India’s evolving food labelling framework. The outcome of this deliberation could significantly reshape how nutritional information is communicated to consumers and how the packaged food sector navigates public health accountability.

The coming weeks will reveal whether India moves toward a stronger cautionary labelling regime or refines its star-based nutrition rating approach. Either way, the issue now sits at the intersection of regulatory policy, public health advocacy, and judicial oversight.

The Reserve Bank of India (RBI), through consolidated Amendment Directions dated 13 February 2026, has substantially overhauled the regulatory architecture governing capital market exposures of commercial banks and small finance banks. The amendments span multiple regulatory domains, including credit facilities, capital market exposures (CME), concentration risk management, capital adequacy, financial statement disclosures, and undertaking of financial services.

The revised framework, effective 1 April 2026 (or earlier if adopted in entirety by a bank), represents a calibrated but firm recalibration of prudential norms, particularly in relation to acquisition finance, bridge finance, lending against financial assets, and exposures to capital market intermediaries (CMIs).

Harmonised Definitions and Structural Clarity

A foundational aspect of the amendments is the introduction of harmonised definitions across prudential frameworks. Terms such as:

• Acquisition Finance
• Bridge Finance
• Capital Market Intermediaries (CMIs)
• Eligible Securities
• Loan-to-Value (LTV)
• Primary Security

have now been formally codified, eliminating ambiguity and aligning exposure treatment across capital, concentration, and disclosure regulations.

Acquisition Finance: Permitted, But Tightly Ring-Fenced

The revised Directions expressly permit acquisition finance for strategic acquisitions by Indian non-financial companies, subject to strict eligibility criteria:

• Minimum net worth of ₹500 crore;
• Demonstrated profitability track record;
• Investment-grade rating for unlisted entities.

Banks must formulate Board-approved policies incorporating underwriting benchmarks relating to leverage, equity contribution, and cash-flow certainty.

Key prudential limits include:

• Financing capped at 75% of independently assessed acquisition value;
• Mandatory minimum 25% contribution from acquirer’s own funds;
• Post-acquisition consolidated debt-to-equity ratio not exceeding 3:1 on a continuous basis;
• Security primarily over acquired shares/CCDs, along with corporate guarantees.

Bridge finance for promoter contribution is allowed only with a clearly identified take-out arrangement within 12 months, preventing open-ended leverage build-up.

Loans Against Eligible Securities: Rationalised LTV Framework

The amendments introduce a structured chapter on Loans Against Eligible Securities, harmonising treatment of lending against financial assets.

Banks may lend against:

• Listed shares
• Government securities
• Rated debt securities
• Mutual fund units
• ETFs
• REITs and InvITs

Prescribed LTV ceilings apply:

• 60% for listed shares and listed convertible debt securities;
• 75% for mutual funds (excluding debt MFs), ETFs, REITs, and InvITs.

Loans for IPO/FPO/ESOP subscriptions are capped at ₹25 lakh per individual, with a minimum 25% margin requirement.

End-use monitoring, valuation norms, margin calls, and compliance with Banking Regulation Act, 1949 (Section 19(2)) are explicitly mandated, reinforcing safeguards against speculative leverage.

Credit Facilities to Capital Market Intermediaries (CMIs)

A distinct regulatory architecture now governs exposures to CMIs.

Permissible facilities include:

• Working capital
• Margin trading finance
• Settlement-related overdrafts
• Market-making support

However, full collateralisation is mandated in most cases. Guarantees in favour of exchanges or clearing corporations are permitted, subject to minimum collateral thresholds, including mandatory cash components.

Critically, banks are prohibited from financing CMIs for proprietary trading or acquisition of securities on their own account, except for limited activities such as market making and short-term debt warehousing.

All exposures to CMIs are to be counted within Capital Market Exposure (CME) unless expressly exempted.

Revised Capital Market Exposure (CME) Limits

The Concentration Risk Management Directions have been extensively amended to insert a detailed and harmonised definition of CME, covering:

• Direct investment exposures
• Advances against securities
• Acquisition finance
• Bridge finance
• Underwriting commitments
• Irrevocable Payment Commitments (IPCs)
• Trade exposures of clearing members

Exposure Caps

• Aggregate CME (solo and consolidated): 40% of eligible capital base
• Sub-limit for direct investment exposures: 20%
• Sub-limit for acquisition finance: 20%, within overall 40% ceiling

Certain investments in critical financial infrastructure entities are excluded.

Computation Methodology Codified

The Directions provide detailed rules for computing CME, including:

• Treatment of intraday exposures
• Net settlement-based computation for IPCs
• Offsetting against cash and government securities (subject to haircuts)
• Measurement based on higher of sanctioned limit or outstanding exposure

This codification enhances predictability and reduces scope for interpretational divergence during supervisory review.

Capital Adequacy Adjustments

The Prudential Norms on Capital Adequacy have been aligned with the revised exposure regime.

Irrevocable Payment Commitments (IPCs) issued to clearing corporations are treated as financial guarantees with a 100% credit conversion factor (CCF). However, capital is required only on the amount reckoned as CME, with a 125% risk weight applied.

This strikes a balance between recognising systemic risk and avoiding excessive capital loading beyond capital market exposure caps.

Enhanced Disclosure Requirements

The Financial Statements: Presentation and Disclosures Directions now require granular disclosure of:

• Direct capital market investments
• Advances against securities
• CMI exposures
• Acquisition finance (including overseas branches)
• Bridge finance
• Underwriting commitments

The objective is enhanced transparency regarding banks’ exposure to capital market volatility.

Alignment of Undertaking of Financial Services Directions

The Undertaking of Financial Services Directions have been correspondingly amended to align permitted activities with the revised credit and exposure framework, including formal recognition of acquisition finance and lending against eligible securities.

Market Concerns and RBI’s Calibrated Adjustments

Market intermediaries have raised concerns regarding potential liquidity constraints arising from:

• Higher collateral requirements
• IPC exposure computation
• Restrictions on proprietary trading finance

Many of these concerns were highlighted during the consultation phase. RBI has partially accommodated feedback by:

• Permitting net settlement-based IPC computation
• Allowing 50% collateral for qualifying intraday facilities
• Expanding permissible collateral types for CMIs
• Relaxing acquisition finance limits compared to draft norms
• Introducing limited flexibility for debt warehousing

Thus, while the final framework remains prudentially tightened, it reflects calibrated post-consultation adjustments rather than rigid imposition.

Conclusion

The revised capital market exposure framework represents one of the most comprehensive prudential resets in recent years. By tightening leverage parameters, rationalising LTV norms, restricting proprietary exposure, and enhancing transparency, the RBI has sought to insulate the banking system from excessive capital market-linked risk.

At the same time, calibrated relaxations demonstrate sensitivity to market functioning and liquidity considerations. The ongoing debate reflects a classic regulatory tension between systemic prudence and market dynamism—one that will likely continue as implementation unfolds.

In a significant regulatory development for India’s digital ecosystem, the Ministry of Electronics and Information Technology (MeitY) has notified amendments to the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, introducing a structured framework to regulate synthetically generated content, including deepfakes. The amendments, which will come into force on 20 February 2026, represent one of the most direct regulatory responses to the growing misuse of artificial intelligence in content creation.

While the draft rules released in October 2025 had already signalled the government’s intent to regulate AI-generated content, the final rules introduce significant refinements particularly around timelines, definitions, and intermediary accountability highlighting a regulatory emphasis on speed, enforceability, and platform responsibility.

Defining “Synthetically Generated Information”

A central feature of the amendment is the formal introduction of a definition of “synthetically generated information.” The Rules define it as:

Audio, visual, or audio-visual information artificially or algorithmically created, generated, modified, or altered using a computer resource, in a manner that such information appears real, authentic, or true, and depicts any individual or event in a way that is or is likely to be perceived as indistinguishable from a natural person or real-world event.

Notably, the definition primarily targets audio-visual manipulation, implying that text-based AI outputs are not directly covered within this specific definition. However, the Rules clarify that references to “information” in the context of unlawful acts will be construed to include synthetically generated information. This ensures that AI-generated deepfakes used to commit offences—such as impersonation, fraud, or defamation fall squarely within regulatory scrutiny.

The framework also carves out limited exceptions, such as routine or good-faith editing, thereby attempting to distinguish malicious synthetic media from legitimate digital processing.

Stricter Intermediary Due Diligence Obligations

The amendments substantially tighten intermediary compliance obligations, particularly in terms of user communication, takedown timelines, and grievance redressal.

1. Mandatory User Intimation Every Three Months

All intermediaries are now required to periodically inform users at least once every three months that non-compliance with platform rules, privacy policies, or user agreements may result in:

• Termination or suspension of access;
• Removal or disabling of non-compliant content; and
• Possible penal consequences under applicable law, including mandatory reporting to authorities where required.

This marks a shift toward proactive compliance communication rather than passive policy publication.

2. Three-Hour Takedown Window

Perhaps the most striking change is the drastic reduction in the takedown timeline. Upon receiving actual knowledge of unlawful information, intermediaries must now remove or disable access within three hours, replacing the earlier 36-hour window.

This accelerated timeline reflects regulatory urgency in addressing viral deepfakes and other harmful AI-generated content, where delay can significantly amplify harm. However, it also raises operational challenges for platforms, particularly in balancing rapid compliance with due process and content verification.

3. Seven-Day Grievance Redressal Timeline

The period for resolving user complaints has been reduced from 15 days to 7 days, reinforcing the theme of expedited digital accountability. Intermediaries will need to significantly strengthen internal moderation and grievance mechanisms to meet these compressed timelines.

Technical Safeguards for Synthetic Content

The Rules impose specific obligations on intermediaries that provide computer resources enabling the creation or modification of synthetically generated information.

Such intermediaries must:

• Deploy reasonable and appropriate technical measures to prevent the creation or dissemination of unlawful synthetic content; and
• Ensure that lawful synthetic content is prominently labelled and embedded with permanent metadata or other appropriate provenance mechanisms, to the extent technically feasible.

The emphasis on metadata and provenance aligns with global regulatory conversations around watermarking, traceability, and authenticity verification in AI-generated content.

Additional Compliance for Significant Social Media Intermediaries

Significant Social Media Intermediaries (SSMIs) face enhanced obligations. These include:

• Obtaining user declarations regarding whether uploaded information is synthetically generated;
• Deploying reasonable and proportionate technical measures to verify such declarations; and
• Ensuring that synthetic content is clearly labelled.

This layered approach reflects a risk-based regulatory model, where larger platforms with greater reach and resources bear proportionately higher compliance responsibilities.

Regulatory Philosophy: Platform Accountability in the AI Era

The amendments signal a clear regulatory philosophy: platform accountability must keep pace with AI capability. By explicitly recognising deepfakes and synthetic manipulation within the intermediary framework, MeitY has expanded the due diligence expectations placed on digital platforms.

The framework seeks to balance three objectives:

1. Preventing misuse of AI-generated content for unlawful purposes;
2. Preserving legitimate innovation and creative expression; and
3. Ensuring rapid response mechanisms to mitigate real-time harm.

However, practical implementation will likely determine the effectiveness of the Rules. The three-hour takedown mandate, in particular, may necessitate automated detection systems and real-time content moderation infrastructure, raising questions around algorithmic decision-making and false positives.

Concluding Observations

The amended IT Rules represent one of India’s most structured attempts to regulate AI-generated content without enacting a standalone AI statute. By embedding synthetic media oversight within the existing intermediary liability framework, the government has opted for incremental regulatory evolution rather than wholesale legislative overhaul.

The real test will lie in operationalisation how intermediaries deploy technical safeguards, manage compressed timelines, and balance rapid compliance with user rights. As AI tools become more accessible and generative capabilities expand, the amendments may well serve as a foundational regulatory layer for India’s broader AI governance architecture.

In a significant consumer-protection initiative, the Reserve Bank of India (RBI) has issued draft Amendment Directions on Advertising, Marketing and Sales of Financial Products and Services by Regulated Entities, applicable to all banks and non-banking financial companies (NBFCs). The proposed amendments aim to address rising concerns around dark patterns, mis-selling, compulsory bundling, coercive sales conduct, and opaque consent practices in the financial services sector.

The directions, once finalised, are proposed to come into effect from 1 July 2026 (for marketing and advertising practices) and 1 April 2026 (for amendments relating to responsible business conduct and undertaking of financial services). Stakeholders have been invited to submit comments by 4 March 2026.

Context: Growing Scrutiny of Dark Patterns in Financial Services

The draft directions follow the policy announcement made in the Statement on Developmental and Regulatory Policies dated 6 February 2026, which outlined broader reforms across financial regulation, payments systems, financial inclusion, and consumer protection.

The move also aligns with the Guidelines for Prevention and Regulation of Dark Patterns notified by the Central Consumer Protection Authority (CCPA) in November 2023. Those guidelines prohibited platforms, advertisers, and sellers from engaging in manipulative online practices such as false urgency and forced action. In June 2025, the CCPA had further issued an advisory requiring e-commerce platforms to conduct self-audits to eliminate such practices.

RBI’s draft directions represent a sector-specific adaptation of these principles within the regulated financial ecosystem.

Clear Definitions and Prohibited Practices

One of the most notable aspects of the draft is the introduction of clear, regulatory definitions of concepts such as:

• Dark patterns
• Compulsory bundling
• Mis-selling
• Explicit consent

The framework identifies and provides illustrative examples of prohibited dark patterns, including:

• False urgency (artificial scarcity or time pressure),
• Basket sneaking (pre-selecting add-ons without informed choice),
• Confirm shaming (using guilt-inducing language to influence decisions), and
• Forced action (making certain services conditional upon acceptance of unrelated products).

By explicitly recognising these practices in a banking regulatory context, RBI signals that manipulative design and behavioural nudges in financial product marketing will attract supervisory scrutiny.

Mandatory Internal Policy Framework

The draft directions require every regulated entity to formulate a comprehensive internal policy governing advertising, marketing, and sales practices. This policy must apply to:

• Proprietary financial products, and
• Third-party financial products distributed by the entity.

The internal policy must cover, inter alia:

• Suitability and appropriateness assessments;
• Clear disclosure norms;
• Grievance redressal and feedback mechanisms;
• Customer compensation frameworks in cases of mis-selling; and
• Ongoing monitoring safeguards.

This shifts the regulatory approach from reactive complaint resolution to ex-ante governance architecture, requiring boards and senior management to institutionalise fair marketing conduct.

Strengthened Oversight of DSAs and DMAs

The draft directions place significant responsibility on banks with respect to Direct Selling Agents (DSAs) and Direct Marketing Agents (DMAs).

Banks will be required to establish:

• Detailed eligibility criteria for appointment;
• Robust due diligence processes;
• Structured training protocols;
• Clearly defined assignment structures;
• Performance evaluation standards; and
• Ongoing monitoring and control mechanisms.

Importantly, the conduct of DSAs and DMAs will be attributable to the regulated entity, reinforcing the principle that outsourcing does not dilute regulatory responsibility.

Explicit Consent: Defined but Not Absolute Defence

The draft introduces a formal definition of “explicit consent” and places the onus squarely on banks and NBFCs to ensure that consent is:

• Clearly obtained;
• Informed;
• Demonstrable; and
• Capable of audit verification.

However, the framework makes it clear that explicit consent will not, in certain cases, absolve the bank of liability for mis-selling. This is a critical departure from formalistic reliance on tick-box acknowledgements. Consent obtained through coercion, manipulation, or inadequate disclosure may not serve as a valid defence.

Fair and Non-Intrusive Communication Standards

The draft also regulates communication channels, including telephonic outreach, SMS, email campaigns, and digital engagement interfaces. Outreach must be:

• Fair and appropriate;
• Non-intrusive;
• Free from misleading representations; and
• Conducted in accordance with suitability principles.

Aggressive cross-selling tactics, pressure-based recovery-linked sales pitches, or bundled product offerings presented as mandatory are likely to face supervisory action under the proposed norms.

Structured Feedback and Compensation Mechanisms

Beyond prohibitions, the draft mandates structured feedback and compensation mechanisms. Regulated entities must define clear procedures for:

• Addressing complaints of mis-selling;
• Investigating allegations of unfair practices;
• Providing timely redressal; and
• Awarding compensation where appropriate.

This creates a systemic feedback loop linking customer experience to compliance oversight and internal performance metrics.

Regulatory Philosophy: From Disclosure to Conduct

The draft directions reflect a broader regulatory shift from disclosure-based compliance to conduct-based supervision. Rather than merely requiring standardised product disclosures, RBI is now focusing on:

• Behavioural design in marketing;
• Incentive structures of sales personnel;
• Monitoring architecture; and
• Accountability frameworks.

This aligns Indian financial regulation with global trends emphasising customer-centricity and fair treatment in financial services.

Implementation Timeline and Industry Implications

If finalised as proposed, the amendments relating to responsible business conduct and undertaking of financial services will take effect from 1 April 2026, while advertising and marketing-specific provisions will come into force from 1 July 2026.

Banks and NBFCs will need to:

• Review and redesign marketing collateral and digital interfaces;
• Revisit incentive-linked compensation models;
• Strengthen DSA/DMA contracts and oversight;
• Document explicit consent mechanisms; and
• Upgrade grievance and audit systems.

Given the breadth of the proposed changes, early internal compliance planning will be essential.

Conclusion

RBI’s draft directions on fair marketing and sales practices represent a decisive step toward eliminating manipulative conduct in the financial sector. By targeting dark patterns, compulsory bundling, and mis-selling, and by reinforcing accountability for consent and agent conduct, the regulator is advancing a consumer-protection paradigm rooted in transparency, suitability, and ethical sales behaviour.

As the financial services landscape becomes increasingly digital and data-driven, these guardrails are likely to redefine marketing governance standards for banks and NBFCs alike.

In a significant policy update aimed at aligning India’s startup ecosystem with evolving innovation realities, the Department for Promotion of Industry and Internal Trade (DPIIT) has notified a revised framework for the definition and recognition of startups in India. The new framework formally introduces a distinct sub-category for deep tech startups, revises eligibility thresholds, and broadens the range of entities that can qualify as startups, while largely retaining the existing recognition mechanism.

The reforms come at a time when India’s startup landscape is maturing beyond early-stage technology ventures into capital-intensive, research-driven businesses operating in areas such as artificial intelligence, semiconductors, space technology, clean energy, biotechnology, and advanced manufacturing. The revised framework seeks to accommodate these realities without diluting regulatory discipline.

Revised Criteria for Startup Recognition

Under the updated framework, DPIIT has rationalised and expanded the core eligibility parameters for startup recognition.

Eligible Entity Types

A startup must be incorporated or registered in India as any of the following:

• a private limited company;
• a partnership firm;
• a limited liability partnership (LLP);
• a multi-state cooperative society; or
• a cooperative society.

The explicit inclusion of cooperative entities marks an important policy shift, recognising alternative ownership and organisational structures that may be relevant for innovation-led enterprises, particularly in agriculture, fintech, and platform-based collective models.

Age of the Entity

An entity will continue to be recognised as a startup for up to 10 years from the date of incorporation or registration. This retains continuity with the earlier framework while ensuring that benefits remain targeted at relatively young enterprises.

Revised Turnover Threshold

One of the most notable changes is the increase in the annual turnover ceiling. Under the revised framework, a startup’s turnover for any financial year since incorporation or registration must not exceed ₹200 crore, doubling the earlier threshold of ₹100 crore.

This change reflects the scaling trajectory of modern startups, which often achieve significant revenues well before stabilising profitability or completing innovation cycles.

Innovation and Scalability Requirement

The entity must be working towards:

• innovation, development, or improvement of products, processes, or services; or
• a scalable business model with high potential for employment generation or wealth creation.

The framework thus continues to emphasise substantive innovation and scalability, rather than mere incorporation status.

Exclusion of Reconstructed Entities

Entities formed through splitting up or reconstruction of an existing business remain ineligible for startup recognition, preserving the principle that benefits are intended for genuinely new ventures.

Formal Introduction of a Deep Tech Startup Category

The most consequential reform under the revised framework is the creation of a dedicated sub-category for deep tech startups.

Core Attributes of Deep Tech Startups

The framework identifies several distinguishing characteristics of deep tech startups, including:

• high research and development intensity;
• extended development timelines; and
• long gestation periods before commercial viability.

Whether an entity qualifies as a deep tech startup will be assessed based on parameters and guidelines issued by DPIIT, and on the basis of documents and information furnished by the applicant. This evaluative approach recognises that deep tech innovation cannot always be captured through conventional revenue or time-based metrics.

Extended Recognition Period and Higher Turnover Limit

For deep tech startups, the framework provides two major relaxations:

• the recognition period has been extended from 10 years to 20 years from incorporation or registration; and
• the turnover ceiling has been enhanced to ₹300 crore.

These thresholds acknowledge the capital-intensive and long-horizon nature of deep tech ventures, which often require sustained R&D investment and regulatory clearances before achieving scale.

Recognition Process: Continuity with Additional Disclosures

The startup recognition process itself remains largely unchanged. Entities are still required to submit:

• an application for recognition;
• the certificate of incorporation or registration; and
• a write-up describing the nature of the business and innovation.

However, entities seeking recognition as deep tech startups must additionally furnish specified documents and information as prescribed under the revised framework. This ensures that the extended benefits are available only to entities that demonstrably meet deep tech criteria.

Tax Benefits and Section 80-IAC Certification

A startup, including a deep tech startup, that is incorporated as a private limited company or LLP and fulfils the prescribed conditions may apply for a certificate for tax exemption under Section 80-IAC of the Income-tax Act, 1961.

Notably, the turnover limit for tax exemption purposes remains ₹100 crore, both under Section 80-IAC and the corresponding provision of the Income-tax Act, 2025. As a result, while DPIIT recognition thresholds have been enhanced, tax benefits continue to operate within a narrower revenue band.

This distinction underscores that regulatory recognition and tax incentives are not fully co-extensive, and startups must independently assess eligibility under each regime.

Restrictions on Deployment of Funds

The revised framework also reiterates and strengthens restrictions on the use of funds by recognised startups, including deep tech startups. Entities are required to deploy funds primarily towards core business activities, such as innovation, research, scaling, and operational requirements.

Startups are restricted from engaging in specified activities or investments, including:

• loans and advances; and
• investments in luxury assets,

except where such activities are undertaken in the ordinary course of business. These conditions are intended to prevent misuse of recognition benefits and ensure that capital is channelled toward productive and innovation-driven purposes.

Key Policy Takeaways

The revised framework introduces several important shifts:

• Startup recognition eligibility has been extended to cooperative entities, broadening institutional participation.
• The turnover threshold has been increased from ₹100 crore to ₹200 crore for general startups.
• A distinct deep tech startup category has been created with a longer recognition period and higher turnover limit.
• Following the abolition of angel tax with effect from 1 April 2025, references to related exemptions have been omitted, reflecting alignment with recent tax reforms.

Conclusion

DPIIT’s revised startup framework represents a measured recalibration of India’s startup policy architecture. By formally recognising deep tech startups and adjusting eligibility thresholds, the government has acknowledged

the changing nature of innovation, capital deployment, and scaling in the Indian economy.While the framework offers greater flexibility and recognition for maturing and research-intensive ventures, it also preserves safeguards to ensure that benefits remain targeted, accountable, and aligned with national innovation objectives. For startups, investors, and policymakers alike, the revised framework provides a clearer and more realistic foundation for the next phase of India’s startup growth story.

The Reserve Bank of India (RBI), on 13 January 2026, notified the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026, replacing the earlier FEMA (Export of Goods and Services) Regulations, 2015, which were last amended in November 2025. The new regulations will come into effect from 1 October 2026.

The 2026 Regulations represent a significant overhaul of India’s foreign exchange framework governing cross-border trade. They consolidate export and import provisions into a single, harmonised regulation, enhance the role of Authorised Dealers (ADs), and seek to promote ease of doing business, operational flexibility, and faster regulatory outcomes, while retaining strong monitoring mechanisms through EDPMS and IDPMS.

Clear Identification of “Specified Authority”

A key structural reform is the introduction of a clear, activity-specific definition of “specified authority” under Regulation 2(1)(f), with separate treatment for goods, services, and software, and further distinction between Domestic Tariff Area (DTA) and Special Economic Zones (SEZs).

• Goods: DTA – Commissioner of Customs SEZ – Development Commissioner
• Services: DTA – Authorised Dealer SEZ – Development Commissioner
• Software: DTA – Authorised Dealer or STPI SEZ – Development Commissioner

An express clarification has also been provided that “services include software”, removing earlier ambiguities that often led to inconsistent regulatory treatment.

Export Declaration Framework Tightened

Under Regulation 3, exporters of goods must furnish an Export Declaration Form (EDF) at the time of export, which is deemed to be filed through shipping bills at EDI-enabled ports. Importantly, the EDF waiver available under the earlier regime has been discontinued, signalling tighter reporting discipline.

For services exports, exporters must submit EDF within 30 days from the end of the month of invoicing. A notable facilitation is the allowance of a single consolidated EDF for multiple service exports in a month, reducing repetitive filings. ADs are empowered to permit delayed submission where justified. The regulations also clarify that travellers carrying personal effects from India shall not be treated as exporters, resolving a long-standing interpretational issue.

Enhanced Role of Authorised Dealers in Managing Entries

Under Regulations 4 and 18, Authorised Dealers are entrusted with the responsibility to update, monitor, and close export and import entries in the EDPMS and IDPMS systems.

A significant ease-of-compliance measure allows ADs to close entries up to ₹10 lakh based on exporter or importer declarations, including quarterly bulk closures. However, ADs are also placed under a positive obligation to follow up on outstanding entries, reinforcing accountability at the banking level rather than at the regulator’s doorstep.

Export Realisation Timelines Rationalised

Regulation 5 prescribes a uniform export realisation timeline of 15 months from:

• the date of shipment (goods),
• the date of invoice (services), or
• the date of sale (warehouse exports).

Where exports are invoiced or settled in INR, the timeline is extended to 18 months. Authorised Dealers retain discretion to grant extensions, ensuring flexibility in genuine commercial situations.

Export Value Adjustments and Write-Offs

Under Regulation 6, ADs may permit reduction or non-realisation of export value upon being satisfied with the underlying reasons. For exports up to ₹10 lakh per invoice or shipping bill, such reduction or write-off may be allowed purely on the basis of exporter declaration, significantly reducing procedural friction for small-value disputes or quality claims.

Commercial Set-Offs and Third-Party Transactions

Regulation 7 expressly permits commercial set-off of export receivables against import payables with:

• the same overseas counterparty, or
• overseas group or associate companies,

provided the set-off occurs within the prescribed or extended realisation period.

Further, Regulation 8 empowers ADs to allow third-party receipts and payments for export and import transactions after satisfying themselves regarding the bona fides of the transaction, offering much-needed flexibility for modern supply-chain and group treasury structures.

Import Payments and Advance Transactions

Under Regulation 9, import payments must be made in accordance with the timeline specified in the underlying contract. ADs are required to monitor IDPMS entries and may permit extensions where delays are adequately explained.

Regulation 10 provides that:

• advance receipts for exports and advance payments for imports must be routed through the same AD,
• any change in AD must be intimated, and
• ADs may require standby letters of credit or bank guarantees for import advances.

Interest on export advances or delayed import payments is capped in line with the trade credit all-in-cost ceiling, ensuring consistency with external commercial borrowing norms.

Consequences of Non-Materialised Imports and Unrealised Exports

To curb repeated defaults, Regulation 12 mandates repatriation of import advances where imports fail to materialise. Repeated failure triggers a requirement for mandatory standby LC or bank guarantee for future advances.

Similarly, Regulation 13 provides that where export proceeds remain unrealised beyond one year from the due or extended date, further exports shall be permitted only against advance payment or irrevocable letters of credit.

Merchanting Trade and Project Exports

Regulation 16 tightens oversight of Merchanting Trade Transactions (MTT) by prescribing a six-month cap between outward and inward remittances, extendable by ADs. Both legs must be properly closed in EDPMS and IDPMS.

Under Regulation 15, project exporters are allowed to receive and make payments as per contract terms and may deploy temporary overseas cash surplus in short-term instruments, subject to AD monitoring.

Mandatory Internal Policies for Authorised Dealers

Perhaps the most systemic reform lies in Regulation 19, which requires every Authorised Dealer to maintain a comprehensive internal policy and Standard Operating Procedure (SOP) covering:

• documentation,
• timelines,
• charges,
• extensions,
• adjustment of export proceeds,
• advance payments, and
• delegation of powers.

Crucially, these policies must include escalation and appeal mechanisms and be published on the AD’s website, significantly enhancing transparency and customer accountability.

Conclusion

The FEMA (Export and Import of Goods and Services) Regulations, 2026 mark a paradigm shift from regulator-centric approvals to bank-led facilitation with accountability. By empowering Authorised Dealers, simplifying low-value compliances, and embedding transparency through internal policies, the RBI has modernised India’s trade forex framework to align with global business practices without compromising regulatory oversight.

For exporters, importers, and banks alike, the new regulations promise greater clarity, speed, and predictability, while reinforcing discipline where risks are higher.

The Union Budget 2026–27 marks a calibrated attempt by the Union Government to balance fiscal consolidation with sustained public investment, while introducing targeted tax and policy reforms aimed at long-term growth. Presented against the backdrop of a nominal GDP growth estimate of 10%, the Budget reflects continuity in fiscal prudence, a renewed thrust on capital expenditure, and sector-specific interventions aligned with the government’s broader vision of “Viksit Bharat”.

Macro-Fiscal Overview

For 2026–27, the Union Government has budgeted total expenditure at ₹53.47 lakh crore, reflecting an increase of 7.7% over the revised estimates of 2025–26. Receipts (excluding borrowings) are estimated at ₹36.51 lakh crore, registering a growth of 7.2%. The resulting fiscal deficit is targeted at 4.3% of GDP, an improvement from the revised estimate of 4.4% in the previous year. The revenue deficit has been maintained at 1.5% of GDP, signalling continued efforts to contain borrowings for revenue expenditure.

The government has reiterated its medium-term objective of reducing outstanding liabilities to around 50% of GDP by March 2031. For 2026–27, central government liabilities are estimated at 55.6% of GDP, continuing the post-pandemic trend of gradual moderation.

Receipts: Moderate Growth Anchored in Tax Revenues

Gross tax revenue is projected to grow by 8% in 2026–27, lower than the estimated nominal GDP growth, indicating conservative revenue assumptions. Corporation tax and income tax collections are expected to grow by 11% and 11.7% respectively over the revised estimates of 2025–26. Net tax revenue (after devolution to states) is estimated at ₹28.67 lakh crore.

Goods and Services Tax (GST) collections show a mixed picture. While Central GST is expected to grow by 6.3%, overall GST revenue is estimated to decline marginally compared to the revised estimates of the previous year, reflecting subdued indirect tax buoyancy.

Non-tax revenue is estimated at ₹6.66 lakh crore, largely driven by dividends and profits from the Reserve Bank of India, public sector banks, and financial institutions, which together account for nearly 59% of such receipts.

Capital receipts (excluding borrowings) are budgeted at ₹1.18 lakh crore, an 85% increase over the revised estimates of 2025–26, primarily due to a sharp increase in the disinvestment target to ₹80,000 crore. This marks the first upward revision in disinvestment targets after several years of shortfalls.

Transfers to States and Finance Commission Framework

The Centre proposes to transfer ₹26.21 lakh crore to states in 2026–27, an increase of 12.2% over the revised estimates of the previous year. This includes tax devolution of ₹15.26 lakh crore and grants and loans amounting to ₹10.95 lakh crore. Of this, ₹1.85 lakh crore has been earmarked as interest-free capital expenditure loans to states.

The recommendations of the Sixteenth Finance Commission, applicable from 2026–27 to 2030–31, retain the states’ share in the divisible pool of central taxes at 41%. The devolution formula places the highest weight on income distance, while introducing a new parameter for contribution to national GDP. Sector-specific and revenue deficit grants have been discontinued, with a renewed focus on local body and disaster management grants.

Expenditure: Capital-Led Growth Strategy

Capital expenditure is budgeted to rise by 11.5% to ₹12.22 lakh crore, reinforcing the government’s emphasis on infrastructure-led growth. Revenue expenditure, in contrast, is estimated to grow at a more modest 6.6%. Interest payments alone account for ₹14.04 lakh crore, constituting 26% of total expenditure and nearly 40% of revenue receipts, underscoring the structural constraint posed by debt servicing.

Public capital expenditure has been increased from ₹11.2 lakh crore in 2025–26 to ₹12.2 lakh crore in 2026–27. Key infrastructure initiatives include new dedicated freight corridors, expansion of national waterways, development of seven high-speed rail corridors, and incentives for municipal bond issuance.

Sectoral Allocations and Key Schemes

Defence remains the largest recipient of budgetary allocation at ₹7.85 lakh crore, accounting for 15% of total expenditure. Capital outlay for defence services has increased significantly, reflecting continued emphasis on modernisation.

Allocations to the Ministries of Road Transport and Highways, Railways, Home Affairs, Education, and Health have seen moderate to strong increases. Notably, allocations for Jal Shakti and Housing and Urban Affairs have risen sharply, largely due to restoration of funding following significant under-spending in the previous year.

The Mahatma Gandhi National Rural Employment Guarantee Scheme has been replaced by the VB-G RAM G Act, which has been allocated ₹95,692 crore in 2026–27. Despite this replacement, a separate allocation of ₹30,000 crore has been retained for MGNREGS. Housing schemes, particularly Pradhan Mantri Awas Yojana (Urban and Rural), have witnessed substantial increases, reversing the sharp cuts seen at the revised stage of 2025–26.

New allocations have also been made for the Viksit Bharat Rozgar Yojana, aimed at incentivising youth employment, and for Research, Development and Innovation, which has seen a significant jump after under-utilisation in the previous year.

Subsidies and Social Sector Spending

Total subsidy expenditure is estimated at ₹4.55 lakh crore, a reduction of 3.1% from the revised estimates of 2025–26. Food and fertiliser subsidies together account for nearly 87% of the subsidy bill. LPG subsidy has been reduced significantly, while interest subsidy has seen an increase.

Allocations for the welfare of women and children have increased by over 25%, driven primarily by higher housing and education spending. Expenditure for Scheduled Castes, Scheduled Tribes, and the North-Eastern Region has also recorded notable increases.

Tax Proposals and Policy Reforms

The Finance Bill, 2026 introduces several structural tax changes while retaining the existing income tax slabs. Key measures include taxation of share buybacks as capital gains, increases in Securities Transaction Tax, rationalisation of Minimum Alternate Tax, and withdrawal of deductions on interest expenditure against dividend and mutual fund income.

Significant policy initiatives include tax holidays for foreign cloud service providers using Indian data centres, extended incentives for International Financial Services Centres, and a disclosure scheme for foreign assets of small taxpayers. Several offences under tax laws have been decriminalised, reflecting a continued push towards ease of doing business.

Conclusion

Union Budget 2026–27 reflects a cautious yet growth-oriented fiscal stance. While revenue growth assumptions remain conservative, the sustained emphasis on capital expenditure, infrastructure development, and employment generation signals a long-term growth strategy. At the same time, the government has adhered to a gradual fiscal consolidation path, maintaining credibility under the FRBM framework. The success of the Budget, however, will ultimately depend on effective implementation and the ability to translate budgeted allocations into actual outcomes on the ground.

The Securities and Exchange Board of India (SEBI) has notified the SEBI (Stock Brokers) Regulations, 2026, marking a decisive shift towards a consolidated and contemporary regulatory framework for stockbrokers and allied market intermediaries. The new regulations repeal and replace the three-decade-old SEBI (Stock Brokers) Regulations, 1992, which had over the years been supplemented through fragmented amendments and circulars.

The 2026 Regulations significantly expand the regulatory perimeter to reflect present-day market realities. Updated definitions now expressly cover clearing members, self-clearing members, professional clearing members, execution-only platforms, and modern compliance concepts such as market abuse, mule accounts, and regulatory sandbox arrangements. Importantly, the definition of “change in control” has been expressly aligned with the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 and the Companies Act, 2013, removing interpretational ambiguities that had earlier resulted in inconsistent disclosures.

One of the most notable governance interventions is the introduction of a residency requirement at the board level. Regulation 6(2)(j) mandates that every stockbroker must have at least one designated director who resides in India for a minimum of 182 days during the financial year. Earlier regulations only required identification of directors or key persons, without prescribing any statutory residency threshold. This move is aimed at ensuring accountable and accessible governance, particularly for entities with foreign ownership or overseas management.

The 2026 framework also replaces the earlier principle-based disclosure regime with a clearly articulated statutory obligation to report material changes. Regulation 10(h) requires stockbrokers to inform SEBI, through the recognised stock exchange, of any material change in the information furnished at the time of registration. The accompanying Explanation exhaustively defines material change to include change in control, change in designated director, key managerial personnel or compliance officer, change in name or registered office, change in legal constitution, failure to maintain minimum net worth, cessation of fit and proper status, and such other changes as may be specified by SEBI. This shift is expected to substantially reduce compliance uncertainty and regulatory disputes.

Investor protection has been further strengthened through the introduction of a statutory timeline for grievance redressal. While grievance mechanisms existed earlier through circulars and exchange-level frameworks, Regulation 10(e) now mandates that investor grievances must be redressed within twenty-one calendar days from receipt of the complaint. By embedding timelines directly in the principal regulations, SEBI has elevated grievance redressal from a procedural expectation to a binding statutory obligation.

Another structural reform lies in the removal of regulatory silos between stockbrokers and clearing members. Regulation 3(4) extends the applicability of key chapters relating to registration, obligations, inspection, enforcement, and penalties to clearing members on a mutatis mutandis basis. This ensures regulatory parity and uniform compliance standards across trading and clearing functions.

A significant policy shift is visible in SEBI’s emphasis on preventive internal controls. Regulation 21 requires stockbrokers to put in place an effective institutional mechanism to prevent, detect, and report fraud or market abuse, while Regulation 23(2) places responsibility for such mechanisms squarely on the designated director and senior management. This marks a transition from reactive enforcement to internal accountability-driven compliance.

For the first time, the regulations expressly recognise market abuse patterns such as trading through mule accounts. Market abuse is now specifically defined to include manipulation and fraudulent or unfair trading practices involving mule accounts, replacing the earlier reliance on broad and generic anti-fraud provisions.

The 2026 Regulations also introduce the concept of Qualified Stock Brokers (QSBs), adopting a risk-based supervisory approach for systemically important intermediaries. QSBs are required to maintain enhanced governance structures, robust risk management policies, scalable technology infrastructure, orderly wind-down frameworks, cyber security systems, and investor-facing digital grievance redressal mechanisms.

Technology resilience and cyber security have now been elevated to core compliance obligations rather than operational best practices. Stockbrokers are required to maintain scalable infrastructure, adequate technical capacity, and robust cyber security frameworks, reflecting SEBI’s growing focus on technology-driven systemic risks.

Finally, the capital adequacy framework has been refined for dual-regulated entities. Where a stockbroker or clearing member in the debt segment is also regulated by another sectoral regulator, net worth is to be computed as per the framework prescribed by the sectoral regulator or SEBI, whichever is higher, thereby ensuring prudential consistency and regulatory convergence.

Overall, the SEBI (Stock Brokers) Regulations, 2026 represent a comprehensive overhaul that aligns regulatory obligations with evolving market structures, technology risks, and governance expectations, while significantly strengthening investor protection and supervisory clarity.

In a significant compliance reform aimed at reducing recurring regulatory burden on company directors, the Ministry of Corporate Affairs (MCA), on 31 December 2025, notified amendments to the Companies (Appointment and Qualification of Directors) Rules, 2014, replacing the long-standing annual Director KYC requirement with a triennial KYC intimation regime.

The move marks a decisive shift in MCA’s approach from repetitive, calendar-driven compliance to a more risk-based and event-driven framework while retaining regulatory visibility over changes in key personal details of Director Identification Number (DIN) holders.

Background: Evolution of the Director KYC Framework

The Director KYC requirement was first introduced in July 2018, following concerns around shell companies, identity misuse, and inaccuracies in the MCA registry. The framework required every DIN holder to annually verify personal details such as name, address, mobile number, and email ID through e-form DIR-3 KYC, failing which the DIN would be deactivated.

Recognising the compliance fatigue caused by annual filings where no data had changed, the MCA introduced a web-based DIR-3 KYC Web facility in 2019. This enabled directors who had already completed a full KYC to re-verify details using pre-filled registry data. However, the web-based option was not available for first-time filings or where updates to mobile number or email ID were required, leading to a fragmented filing regime with dual forms.

The December 2025 amendment builds upon this incremental reform by structurally re-designing the frequency and form of KYC compliance itself.

Effective Date of the New Regime

The amended rules will come into force on 31 March 2026. From this date, the annual DIR-3 KYC cycle will stand replaced by a once-in-three-years KYC intimation requirement, subject to event-based filings for changes in personal particulars.

Triennial KYC Intimation: What Has Changed

Under the amended framework, every individual holding a DIN as on 31 March of a financial year will be required to file a KYC intimation in Form DIR-3 KYC Web:

·      Once every three consecutive financial years, and

·      On or before 30 June of the immediately following third financial year.

This marks a substantial reduction in compliance frequency while preserving MCA’s ability to periodically reconfirm the accuracy of director data.

Illustrative Example

Under the earlier regime, an individual holding a DIN as on 31 March 2025 was required to file DIR-3 KYC for FY 2024-25 by 30 September 2025 (later extended).

Under the new regime:

If the KYC was already completed, the next DIR-3 KYC Web filing will be due by 30 June 2028. If the KYC was not filed, the DIN would remain deactivated but may be reactivated up to 31 March 2026 by filing the KYC form along with a late fee of ₹5,000, in line with existing provisions.

Event-Based KYC: Mandatory Updates Within 30 Days

While routine verification has been relaxed, the amendment tightens compliance around changes in key personal details. Where there is any change in: Personal mobile number, Email address, or Residential address, the DIN holder is required to file Form DIR-3 KYC Web within 30 days of such change, along with the applicable fee.

This ensures that the MCA registry remains current and reliable, even as periodic filing frequency is reduced. Importantly, the amendment now explicitly includes residential address changes within the scope of mandatory updates an aspect that was earlier implicit but inconsistently enforced.

Single Unified Form: DIR-3 KYC Web

One of the most practical changes introduced by the amendment is the consolidation of forms.

Earlier: e-form DIR-3 KYC was required for first-time filings and updates, and DIR-3 KYC Web was permitted only for repeat filings without changes.

Under the new regime:

DIR-3 KYC Web becomes the sole form for: Triennial KYC intimation Updating mobile number, email ID, or residential address

Reactivation of a deactivated DIN

This unification simplifies compliance, reduces confusion, and aligns with MCA’s broader digital-first governance approach.

Fees and Penalties: Awaiting Further Clarity

While the amendment lays down the substantive framework, clarity on fees remains pending. The Companies (Registration Offices and Fees) Rules, 2014 currently continue to refer to both e-form DIR-3 KYC and DIR-3 KYC Web, and do not yet reflect: Fees applicable for address updates, or Fees for delayed event-based filings under the new regime. Further amendments or clarificatory notifications are therefore expected to operationalise the revised framework fully.

Regulatory Significance and Practical Impact

The shift to a triennial KYC regime reflects a maturing compliance philosophy. Rather than mandating repetitive filings with no informational value, the MCA has opted for:

·      Lower frequency, but

·      Higher relevance and accuracy.

For directors especially independent directors and professionals serving on multiple boards this change significantly reduces compliance overhead and the risk of inadvertent defaults. For companies, it reduces follow-up burden and compliance monitoring costs. At the same time, the insistence on timely event-based updates ensures that regulatory oversight is not diluted, but merely re-targeted to situations where risk actually arises.

Conclusion

The move to a triennial Director KYC regime marks a meaningful compliance reset under the Companies Act, 2013. By balancing regulatory oversight with administrative efficiency, the MCA has signalled a clear shift toward proportionate and technology-driven governance.

Once fee-related ambiguities are resolved, the amended framework is likely to significantly improve the director compliance experience while preserving the integrity of the corporate registry an outcome that benefits regulators, companies, and directors alike.

India’s New Labour Codes:  A Comprehensive Legal and Operational Reset of Employment Law

With effect from 21 November 2025, India has formally operationalised the four new Labour Codes, marking the most far-reaching reform of labour legislation since Independence. Through this reform, 29 Central labour enactments, many dating back to the colonial and early post-Independence period, stand repealed and subsumed into four consolidated Codes, namely the Code on Wages, 2019, the Industrial Relations Code, 2020, the Occupational Safety, Health and Working Conditions Code, 2020, and the Code on Social Security, 2020

The stated objective of the reform is twofold: first, to simplify and rationalise employer compliance by replacing fragmented and overlapping laws with a uniform framework, and second, to expand the substantive and procedural protections available to workers across organised, unorganised, gig, platform and migrant sectors. The Codes are now fully in force, save for limited provisions relating to provident fund schemes, and the repeal of the earlier enactments has taken effect simultaneously, without any express statutory transition period

Legal Architecture and Transitional Framework

A critical feature of the Labour Codes is their overriding effect. Each Code expressly provides that its provisions shall prevail over any inconsistent law, contract, standing order, service rule, award or settlement, irrespective of whether such arrangement was entered into prior to the Codes coming into force. Consequently, legacy employment structures cannot be relied upon as a defence to non-compliance once an inconsistency with the Codes is established

At the same time, the Codes recognise the practical necessity of continuity. In the absence of finalised Rules framed by the Central or State Governments, existing rules, notifications, schemes and circulars issued under the repealed enactments continue to operate, to the extent they are not inconsistent with the Codes. This continuity flows from Section 24 of the General Clauses Act, 1897 and corresponding saving provisions embedded in each Code

As on the date of implementation, only a limited number of States have notified final Rules under all four Codes, while most States have issued draft Rules or none at all, creating a hybrid compliance environment for employers.

UNIFORM DEFINITIONS AND EXPANSION OF STATUTORY COVERAGE

Wages: Structural Recalibration Through the 50% Rule: The redefinition of “wages” constitutes one of the most consequential changes under the Codes. While the definition retains an exclusion list covering components such as house rent allowance, conveyance allowance, overtime payments and statutory contributions it introduces a statutory ceiling on exclusions. Where excluded components exceed 50% of total remuneration, the excess is deemed to be wages and must be factored into all wage-linked statutory calculations. Additionally, remuneration in kind, up to 15% of total remuneration, is also brought within the wage fold

This recalibration has a cascading effect on gratuity, provident fund, social security contributions, retrenchment compensation, notice pay, leave encashment and bonus eligibility, requiring employers to fundamentally reassess salary structures and cost models.

Employee, Worker and Employer: Enlarged Accountability

The Codes expand the definition of “employee” to include supervisory, managerial and administrative personnel, thereby extending statutory wage protection, payment timelines and enforcement remedies to categories that were earlier excluded under laws such as the Payment of Wages Act. The term “worker”, while aligned with the earlier concept of “workman”, has been broadened to include sales promotion employees and working journalists, with revised wage thresholds for supervisory exclusions

Equally significant is the expanded definition of “employer”, which now expressly includes persons employing workers directly or indirectly, contractors, legal representatives, and persons having ultimate control over the affairs of an establishment. This expansion materially increases the compliance exposure of principal employers engaging contract labour or operating through layered managerial structures

Enforcement Philosophy: Facilitative, Yet Stringent

The Labour Codes reflect a conscious shift away from criminalisation of routine non-compliance towards a compliance-first enforcement model. Minor and technical violations are largely decriminalised, with imprisonment reserved for serious breaches such as non-deposit of employee social security contributions or violations involving hazardous processes. The introduction of the Inspector-cum-Facilitator institutionalises an advisory and corrective approach, mandating opportunities for rectification before punitive action is initiated. At the same time, monetary penalties have been substantially enhanced, and repeat violations attract significantly higher consequences, including restrictions on compounding.

Substantive Legal Impact of Each Code

Code on Wages, 2019

The Wage Code universalises the right to minimum wages by eliminating the concept of scheduled employment. Minimum wages must now be paid to all employees, with the Central Government empowered to notify a national floor wage below which no State minimum wage may fall. Gender-based discrimination in wages is expressly prohibited, and payment-of-wages protections apply without any wage ceiling, extending statutory safeguards to senior management personnel.

Industrial Relations Code, 2020

The IR Code rationalises industrial dispute resolution while enhancing employer flexibility. The threshold for prior government approval for retrenchment, lay-off and closure has been increased to 300 workers, fixed-term employment is formally recognised, and a Worker Re-Skilling Fund has been introduced, requiring employer contributions equivalent to 15 days’ last-drawn wages of retrenched workers. Mandatory Grievance Redressal Committees and statutory trade union recognition mechanisms are central to the Code’s dispute-prevention framework

Occupational Safety, Health and Working Conditions Code, 2020

The OSH Code consolidates safety, health and welfare obligations under a single registration and common licensing regime, with provisions for deemed approval to reduce administrative delays. It introduces a uniform threshold for contract labour applicability, prohibits engagement of contract labour in core activities subject to limited exceptions, and places primary welfare and safety obligations squarely on principal employers. The Code also mandates annual health check-ups, enables women to work night shifts subject to consent and safety measures, and empowers the Central Government to prescribe uniform national safety standards.

Code on Social Security, 2020

The Social Security Code represents a decisive move towards universal social protection, extending coverage to gig workers, platform workers, fixed-term employees and unorganised workers. Aggregators are required to contribute a prescribed percentage of turnover towards gig-worker welfare, and Aadhaar-linked Universal Account Numbers ensure portability of benefits across States and employments, significantly formalising workforce participation.

Standard Operating Procedures (SOPs) for Employers Under the Labour Codes

In the absence of a statutory transition window, employers must immediately operationalise a structured, multi-layered compliance SOP. Based on the Codes and continuing subordinate legislation, the following SOP framework is essential:

Phase I: Legal and Structural Audit

Employers must conduct a comprehensive legal audit of all employment contracts, HR manuals, wage policies, standing orders, settlement agreements and contractor arrangements. This audit should identify inconsistencies with the new definitions of wages, employee coverage, employer liability and statutory benefits. Any clause that dilutes or contradicts Code-mandated rights must be revised or rendered inoperative.

Phase II: Wage and Payroll Reconfiguration

Salary structures must be realigned to comply with the 50% wage rule, national floor wage requirements and revised minimum wages. Payroll systems should be recalibrated to ensure accurate computation of gratuity, provident fund, social security contributions, bonus and terminal benefits. Special attention must be paid to senior management compensation structures, which are now subject to statutory wage protections.

Phase III: Registration, Licensing and Establishment Compliance

Employers must review existing registrations and licences under repealed laws and initiate applications for single registration and common licences under the OSH Code, while continuing compliance with local shops and establishments laws until harmonised Rules are notified. Contractors must be verified for licensing compliance, and establishments operating across multiple States must map the applicable “appropriate government” under each Code.

Phase IV: Contract Labour and Core Activity Assessment

All manpower arrangements must be reassessed to determine whether outsourced functions fall within core activities. Where contract labour engagement continues, employers must ensure contractor licensing, wage compliance, welfare facilities and social security contributions, recognising that the OSH Code places primary liability on the principal employer.

Phase V: Institutional Mechanisms and Workforce Governance

Mandatory committees, including Grievance Redressal Committees, safety committees and negotiating unions or councils must be constituted where thresholds are met. Internal grievance mechanisms must be aligned with statutory timelines and escalation pathways under the IR Code.

Phase VI: Safety, Health and Welfare Protocols

Employers must update workplace safety policies to reflect OSH Code standards, including annual health check-ups, welfare facilities, night-shift protocols for women, and reporting mechanisms for unsafe working conditions. Employee training and sensitisation programmes should be institutionalised to ensure shared accountability.

Phase VII: Inspection Readiness and Continuous Monitoring

Organisations must prepare for the Inspector-cum-Facilitator regime, ensuring digital record-keeping, timely rectification of deficiencies and proactive engagement during inspections. A continuous monitoring mechanism should be established to track State-specific Rules, notifications and sector-specific exemptions as they are notified.

Conclusion

The implementation of the four Labour Codes marks a structural transformation of India’s labour law regime, replacing fragmentation with coherence and expanding worker protection alongside simplified compliance. For employers, the absence of a transition period necessitates immediate, methodical and well-documented compliance action. Those who proactively realign contracts, payroll systems, safety protocols and governance structures will not only mitigate legal risk but also be better positioned in a labour ecosystem designed for formalisation, transparency and long-term sustainability

In a significant compliance relief for companies across India, the Ministry of Corporate Affairs (MCA), vide General Circular No. 08/2025 dated 30 December 2025, has extended the due date for filing annual returns and financial statements for FY 2024–25 to 31 January 2026, without the levy of any additional fees.

The extension comes against the backdrop of widespread technical difficulties faced by stakeholders on the MCA-21 portal, including system timeouts, filing errors, and intermittent unavailability of forms, particularly in the days leading up to the earlier deadline of 31 December 2025. The move is expected to ease compliance pressure on companies, professionals, and registrars grappling with the practical challenges arising from the complete migration of the MCA portal from Version 2 to Version 3.

Forms Covered Under the Deadline Extension

The relaxation granted by the MCA applies to the following statutory e-Forms relating to annual filings:

• MGT-7 – Annual return for companies other than OPCs and small companies
• MGT-7A – Abridged annual return for OPCs and small companies
• AOC-4 – Filing of standalone financial statements and related documents
• AOC-4 CFS – Consolidated financial statements
• AOC-4 NBFC (Ind AS) – Financial statements for NBFCs under Ind AS
• AOC-4 CFS NBFC (Ind AS) – Consolidated Ind AS financials for NBFCs
• AOC-4 (XBRL) – Financial statements in XBRL format

Companies filing these forms for FY 2024–25 will be able to do so up to 31 January 2026 without incurring any additional fees, notwithstanding the original statutory timelines.

Statutory Filing Timelines Under the Companies Act, 2013

Under the Companies Act, 2013, companies are required to adhere to strict post-AGM filing timelines:

• Annual Return (MGT-7 / MGT-7A) – within 60 days of the Annual General Meeting
• Financial Statements (AOC-4 series) – within 30 days of the AGM

Failure to comply ordinarily attracts additional fees on a per-day basis, often resulting in significant financial exposure for companies and directors alike. The present relaxation, therefore, operates as a fee waiver, not as a statutory extension of time under the Act.

MCA-21 Portal Transition: V2 to V3 and Its Impact

A critical factor underlying repeated deadline extensions has been the full transition of the MCA-21 portal from Version 2 to Version 3. The revised e-Forms for annual filings forming part of the final tranche of 38 company forms were deployed on the V3 portal on 14 July 2025, marking the completion of the migration.

However, this transition materially affected filings relating to FY 2024–25 (ending 31 March 2025). Notably:

• The relevant e-Forms were temporarily unavailable from 18 June 2025 to 13 July 2025 due to scheduled system migration.
• Where statutory due dates or resubmission timelines fell within this blackout period, the MCA, vide General Circular No. 01/2025 dated 16 June 2025, had extended the filing deadline up to 15 August 2025 without additional fees.

Despite this interim relief, stakeholders continued to report persistent operational challenges even after the go-live of V3, including difficulties in validation, attachment uploads, and payment processing.

Earlier Extension to 31 December 2025

Recognising that companies and professionals required additional time to familiarise themselves with the revised filing architecture and new validation rules, the MCA had earlier issued General Circular No. 06/2025 dated 17 October 2025, extending the annual filing deadline for FY 2024–25 to 31 December 2025, again without additional fees.

The present extension to 31 January 2026 is therefore the second substantive relaxation granted specifically in response to transition-related difficulties, underscoring the regulator’s acknowledgment of systemic challenges rather than isolated user errors.

Important Clarifications by MCA

The MCA has expressly clarified certain critical aspects that companies must note:

• No extension of AGM timelines: The circulars do not, in any manner, extend the statutory time limits for holding Annual General Meetings under the Companies Act, 2013. Companies were still required to convene AGMs within the prescribed period.
• Additional fees post-31 January 2026: Any filings made after 31 January 2026 will attract all applicable fees, including additional fees, calculated from the original due date prescribed under the Act—not from the extended deadline.

Thus, the relief is strictly limited to fee waiver within the extended window and does not alter substantive compliance obligations.

Regulatory Significance and Practical Takeaways

From a compliance perspective, the extension offers immediate relief to companies facing last-mile filing challenges, particularly those with complex financials, consolidated statements, or XBRL-based reporting. It also provides professionals with additional time to resolve resubmissions, technical errors, and validation issues without exposing clients to penal consequences.

At a broader level, the repeated extensions highlight the operational risks inherent in large-scale digital regulatory migrations, even when implemented with phased rollouts. While the MCA-21 V3 platform promises long-term efficiency, data integration, and analytics-driven regulation, its short-term transition costs have necessitated pragmatic regulatory flexibility.

Conclusion

The MCA’s decision to extend the annual filing deadline for FY 2024–25 to 31 January 2026 without additional fees reflects a balanced regulatory approach one that upholds statutory discipline while recognising genuine systemic constraints faced by stakeholders during the MCA-21 V3 transition.

Companies should treat this extension as a final compliance window, ensuring timely completion of all pending filings to avoid exposure to additional fees and downstream regulatory consequences. As the V3 ecosystem stabilises, such transitional relaxations are unlikely to continue indefinitely, making proactive compliance planning essential going forward.

Apple Inc.’s writ petition before the Delhi High Court has brought sharp focus back onto one of the most consequential shifts in Indian competition law enforcement the introduction of global turnover as the benchmark for monetary penalties in antitrust cases. The challenge raises fundamental questions about proportionality, deterrence, and constitutional limits on regulatory discretion, with implications extending far beyond the facts of Apple’s App Store dispute.

At the heart of the controversy lies the amended penalty framework under the Competition Act, 2002, which became operational in March 2024. For the first time, the Competition Commission of India (CCI) has been statutorily empowered to consider an enterprise’s global turnover at the very first stage of penalty determination, where calculation of “relevant turnover” is not feasible. While the reform was introduced to strengthen enforcement and address practical loopholes, Apple’s case has now placed the framework under intense judicial scrutiny.

Understanding the Global Turnover Framework

Under the amended Section 27(b) of the Competition Act, read with the CCI (Determination of Monetary Penalty) Guidelines, 2024, penalties for anticompetitive agreements or abuse of dominance are capped at 10% of the average global turnover of the enterprise for the last three preceding financial years. Crucially, this global turnover includes revenue derived from all products and services worldwide, not merely those connected to the contravention.

The framework follows a multi-step methodology. First, the CCI is required to determine the average relevant turnover attributable to the infringing products or services. However, where such determination is not feasible such as when the enterprise has no direct sales in the relevant market the law permits the Commission to move directly to global turnover. A base penalty of up to 30% of this figure may then be calculated, adjusted for aggravating and mitigating factors, and finally subjected to the statutory 10% cap.

The stated rationale for this shift is deterrence. Lawmakers sought to prevent scenarios where large multinational enterprises escape meaningful penalties simply because their Indian-facing revenue is minimal or difficult to quantify, even though the alleged conduct may have serious competitive effects.

The App Store Investigation: Context of the Dispute

Apple has been under the CCI’s lens since December 2021, when the Commission ordered an investigation into its App Store policies. The complaints focused on Apple’s requirement that app developers distribute paid digital content exclusively through Apple’s in-app payment system and pay a commission of up to 30%. The CCI formed a prima facie view that these practices may amount to abuse of dominant position.

It has since been reported that the Director General’s investigation has concluded and that the report has been shared with Apple. Anticipating adverse findings and a potentially substantial penalty under the amended framework, Apple approached the Delhi High Court in November 2025. Market reports suggest that the company could face a penalty running into tens of billions of dollars if global turnover is taken as the base.c

What Apple Is Challenging

Apple’s petition challenges both the 2023 amendment to Section 27(b) and the 2024 Penalty Guidelines. The company contends that penalties based on global turnover are manifestly arbitrary, grossly disproportionate, and unconstitutional, particularly where the alleged infringement relates to a narrow segment of services in a specific jurisdiction.

A central plank of Apple’s argument is that using global turnover bears no rational nexus to the gravity of the alleged violation in India. According to this view, penalising revenue streams entirely unrelated to the contravention amounts to punitive overreach rather than proportionate deterrence. Apple has also raised concerns about retrospective application, pointing to instances where the new framework has been invoked in relation to conduct that allegedly occurred long before the amendment came into force.

From Excel Crop Care to the 2024 Regime: A Shift in Philosophy

To appreciate the significance of this challenge, it is necessary to revisit the evolution of penalty jurisprudence in India. Prior to 2017, the Competition Act capped penalties at 10% of the average turnover for the preceding three years, without clarifying whether this meant total, relevant, or global turnover. This ambiguity was settled by the Supreme Court in the landmark Excel Crop Care judgment, which held that penalties must be based on relevant turnover—that is, turnover arising from the products or services to which the contravention relates.

Excel Crop Care emphasised proportionality and prescribed a structured, two-step approach to penalty determination. For several years thereafter, relevant turnover became the guiding principle for CCI enforcement. The 2023 amendment, however, reflects a deliberate legislative departure from this philosophy. By allowing global turnover to be used at the threshold stage where relevant turnover is indeterminable, Parliament has prioritised deterrence and enforcement effectiveness over strict turnover-linkage.

Apple’s case thus places the judiciary at the intersection of these two competing approaches.

Why the Outcome Matters

The Delhi High Court’s eventual ruling will have far-reaching consequences for competition enforcement in India. A judicial endorsement of the global turnover framework would significantly enhance the CCI’s penalty arsenal, particularly against large digital platforms and multinational corporations operating complex business models. It would also align India more closely with jurisdictions that favour strong deterrence in digital market cases.

Conversely, if the court reads down or strikes down the framework on grounds of arbitrariness or disproportionality, it could recalibrate the balance between enforcement power and constitutional restraint. Such an outcome may require the CCI to demonstrate a clearer nexus between the contravention and the turnover base, even in cases where direct market presence is limited.

For enterprises, the case underscores the need to reassess competition risk exposure in India, particularly in digital and platform-based markets. Penalties are no longer a function of India-specific revenue alone but may now be influenced by global financial scale.

Conclusion: A Defining Test for Indian Antitrust Law

Apple’s challenge is not merely about one company or one investigation. It is a test case for the future of penalty jurisprudence under Indian competition law. The decision will determine how far the law can go in using economic scale as a proxy for deterrence, and whether global turnover can legitimately anchor penalties for localised conduct.

As the matter comes up for further hearing on December 16, the competition law community will be watching closely. Whatever the outcome, the ruling is poised to shape enforcement strategy, corporate compliance behaviour, and constitutional boundaries in Indian antitrust law for years to come.

In a significant recalibration of regulatory oversight in India’s packaged drinking water sector, the Food Safety and Standards Authority of India has formally discontinued the long-standing requirement of mandatory Bureau of Indian Standards (BIS) certification for packaged drinking water and mineral water. Simultaneously, the regulator has rolled out a far more stringent, audit-driven testing and compliance framework, set to take effect from 1 January 2026.

This regulatory shift, notified through an order dated 17 December 2025, follows an earlier notification of October 2024 and amends the Food Safety and Standards (Prohibition and Restriction of Sales) Regulations, 2011. While manufacturers will no longer be required to display the BIS certification mark, the change does not signal regulatory relaxation. On the contrary, it reflects a strategic move away from certification-based oversight toward continuous, process-oriented compliance and testing.

End of BIS Certification But Not of Regulatory Control

Until now, packaged drinking water and mineral water manufacturers were required to comply with both FSSAI regulations and BIS standards, leading to dual regulatory oversight. With the omission of the BIS certification requirement, food business operators (FBOs) will no longer be mandated to obtain or renew BIS licences for bottled water products.

However, FSSAI has made it clear that the removal of BIS certification does not dilute safety or quality expectations. Instead, it replaces ex-ante certification with an expansive and compulsory “Scheme of Testing”, which significantly tightens operational, testing, documentation, and audit requirements.

This approach marks a regulatory philosophy shift—from static compliance at the point of certification to dynamic, lifecycle-based compliance throughout production.

Comprehensive Scheme of Testing: Scope and Applicability

Under the new framework, all manufacturers of packaged drinking water (excluding packaged natural mineral water) and mineral water must strictly adhere to the prescribed testing scheme. FBOs are required to maintain detailed records establishing conformity with quality parameters, ensure full compliance with the Food Safety and Standards (Packaging) Regulations, 2018, and subject their entire production process to ongoing regulatory control.

Crucially, all operations must continue to comply with Schedule IV of the Food Safety and Standards (Licensing and Registration of Food Businesses) Regulations, 2011, which governs hygiene, sanitation, and good manufacturing practices. In effect, while one regulatory layer has been removed, the intensity of compliance monitoring has substantially increased.

Microbiological Safety: Zero-Tolerance, High-Frequency Testing

A central pillar of the new regime is a heightened focus on microbiological safety, long recognised as the most critical risk factor in packaged water.

FSSAI has mandated monthly testing for an extensive list of microbiological contaminants, including:

• Coliform bacteria
• Faecal streptococci
• Staphylococcus aureus
• Pseudomonas aeruginosa
• Yeast and mould
• Salmonella, Shigella, and Vibrio species

The framework adopts a zero-tolerance approach. Any instance of microbiological non-compliance will trigger immediate corrective measures, including:

• Suspension of dispatch
• Root-cause investigation
• Retesting of affected stock
• Mandatory demonstration of compliant results across five consecutive batches before production can resume

Further, records of such non-compliance and corrective action must be preserved for a minimum of five years, ensuring traceability and audit readiness.

Tightened Oversight of Source Water

The new regime also imposes strict controls on raw water sources, recognising that contamination risks often originate upstream.

Manufacturers must test source water for all prescribed parameters through FSSAI-notified NABL-accredited laboratories before use. Any change in the source of water necessitates fresh testing and full regulatory compliance prior to recommencement of commercial production.

Notably, the framework adopts a stringent stance on radioactive contamination. If radioactive residues are detected, the source must be abandoned immediately, affected water must be recalled, and the food authority must be informed without delay. This reflects FSSAI’s increasing alignment with international food safety risk-management standards.

Packaging and Container Controls

While BIS certification is no longer mandatory, packaging standards remain tightly regulated. All packaging materials including plastic bottles, jars, pouches, glass bottles, cartons, and aluminium cans must comply with existing food packaging regulations and will be subject to enhanced scrutiny during inspections.

The framework permits reuse of containers of five litres and above only if they are durable, hygienic, and free from physical damage. This provision seeks to balance sustainability concerns with hygiene and consumer safety.

From Certification to Continuous Compliance

The regulatory pivot from BIS certification to an intensive testing and audit framework reflects a broader shift in FSSAI’s enforcement strategy. Rather than relying on upfront certification as a proxy for safety, the regulator is moving toward continuous compliance verification, backed by documentation, laboratory testing, and inspection-led oversight.

For manufacturers, this change may reduce administrative overlap by eliminating BIS licensing, but it significantly raises the bar on operational discipline, quality assurance systems, internal audits, and record-keeping. Smaller and mid-sized players, in particular, may face increased compliance costs and operational restructuring.

Implications for the Packaged Water Industry

India’s packaged water market is highly competitive, fragmented, and volume-driven. Under the new regime, compliance failures—especially microbiological lapses carry the risk of production shutdowns, recalls, and reputational damage. Conversely, manufacturers with robust quality-control systems and compliance cultures stand to gain competitive advantage.

From a regulatory standpoint, the shift enhances FSSAI’s ability to intervene early, detect systemic risks, and enforce accountability beyond formal certification.

Conclusion

FSSAI’s decision to scrap mandatory BIS certification while introducing a rigorous testing and compliance regime marks a structural transformation in food safety regulation for packaged water. The move replaces symbolic compliance with substantive oversight, placing greater responsibility squarely on manufacturers to ensure safety at every stage of production.

As the new framework comes into force in January 2026, packaged water manufacturers must prepare for a regulatory environment where continuous testing, meticulous documentation, and audit readiness are no longer optional but central to lawful operation.

In a significant regulatory development for India’s insolvency ecosystem, the Insolvency and Bankruptcy Board of India has notified the Insolvency Professionals to act as IRPs, RPs, Liquidators and Bankruptcy Trustees (Recommendation) (Second) Guidelines, 2025, governing appointments for the period 1 January 2026 to 30 June 2026. The revised framework, issued on 21 November 2025, replaces the earlier guidelines of May 2025 and seeks to bring greater predictability, transparency, and administrative efficiency to the process of recommending Insolvency Professionals (IPs) to Adjudicating Authorities across corporate as well as individual insolvency proceedings.

These guidelines assume special importance in light of the statutory role played by IBBI in making professional recommendations under multiple provisions of the Insolvency and Bankruptcy Code, 2016, including Sections 16(4), 34(6), 97(4), 98(3), 125(4), 146(3) and 147(3). Under these provisions, the National Company Law Tribunal and the Debt Recovery Tribunal routinely request IBBI to recommend names of Insolvency Professionals for appointment as Interim Resolution Professionals, Resolution Professionals, Liquidators, and Bankruptcy Trustees. The revised guidelines respond directly to the growing need for a pre-verified, ready-to-deploy panel to avoid administrative bottlenecks and support the time-bound commencement of insolvency processes, which lies at the very heart of the IBC framework.

A Shift Towards a Pre-Verified and Predictable Appointment System

The cornerstone objective of the revised framework is to institutionalise a centralised, consent-based, and pre-screened national panel of Insolvency Professionals. Instead of last-minute verification and ad-hoc recommendations, the new system ensures that professionals on the panel are fully eligible, conflict-free, and assignment-ready for the entire panel period. This marks an important move from reactive appointment processes to a proactive and system-driven recommendation mechanism, strengthening both speed and institutional credibility.

By replacing the earlier May 2025 guidelines, the new framework also reflects IBBI’s ongoing effort to continuously refine the regulatory architecture in response to operational challenges faced by courts and professionals alike.

Tightened Eligibility Norms to Ensure Professional Integrity

The revised guidelines lay down clear and non-negotiable eligibility conditions for empanelment. To qualify for inclusion on the panel, an Insolvency Professional must not have any disciplinary proceedings pending before IBBI or the concerned Insolvency Professional Agency, must not have suffered any criminal conviction during the preceding three years, and must submit an Expression of Interest in Form A with unconditional consent to act in any assigned role.

A particularly crucial safeguard is the requirement that every applicant must hold a valid Authorisation for Assignment (AFA) that remains effective for the entire panel period up to and beyond 30 June 2026. This ensures that the panel consists only of professionals who are continuously compliant and legally eligible to take up insolvency assignments, eliminating situations where appointments get derailed mid-process due to regulatory lapses.

Together, these conditions ensure that only fit-and-proper, assignment-ready, and conflict-free professionals enter the recommendation zone.

Expression of Interest and Sectoral Mapping

Under the revised framework, IBBI will invite Expressions of Interest through email, with a stipulated deadline of 22 December 2025 for submission. The EOI serves as unconditional advance consent by the IP to act as Interim Resolution Professional, Resolution Professional, Liquidator, or Bankruptcy Trustee whenever recommended.

A notable new feature is the mandatory declaration of sectoral experience by Insolvency Professionals. This enables Adjudicating Authorities to align appointments more closely with the industry-specific characteristics of the corporate debtor or individual insolvency matter. Once finalised, the consolidated panel will be circulated to all NCLT and DRT benches by 31 December 2025, ensuring nationwide uniformity in access to the recommendation pool.

Panel Structure: National Consolidation with Zonal and Bench-Level Segregation

The revised guidelines establish a single consolidated national panel, further organised on zone-wise and bench-wise lines based on the registered office of each Insolvency Professional as detailed in the annexure. This structure ensures administrative clarity while retaining flexibility for regional deployment.

Importantly, Insolvency Professional Entities acting as IPs will be eligible for appointment across all NCLT benches nationwide, reflecting the national operational footprint of such entities. At the same time, Adjudicating Authorities retain full discretion to select any IP from the panel or, where the situation demands, seek a recommendation for an IP outside the panel.

This preserves judicial independence while ensuring that a ready pool of vetted professionals is always available.

Sorting and Workload Balancing

To prevent concentration of assignments and promote fair distribution of professional opportunities, the panel will be sorted based on the number of ongoing insolvency processes being handled by each Insolvency Professional. Where two IPs have the same workload count, seniority of registration will determine their relative placement.

This data-driven sorting mechanism is a crucial step toward equitable work allocation, preventing systemic over-dependence on a limited group of professionals while broadening participation across the insolvency ecosystem.

Obligations and Binding Nature of Empanelment

The revised guidelines impose strict obligations on empanelled Insolvency Professionals. Inclusion in the panel will be treated as deemed acceptance of any future appointment, and an IP may not withdraw consent except with the express approval of the NCLT, DRT, or IBBI. Any unjustified refusal to accept an assignment may result in removal from the panel for six months.

Further, empanelled IPs are required to maintain continuity by not surrendering their registration, professional membership, or Authorisation for Assignment during the panel period. These obligations reinforce professional accountability and ensure that insolvency processes are not disrupted due to avoidable withdrawals or regulatory non-compliance.

Repeal of Earlier Guidelines and Legal Continuity

With the enforcement of the new guidelines, the earlier Recommendations Guidelines dated 27 May 2025 stand repealed. However, all appointments and actions taken under the repealed framework will continue to remain legally valid, preserving transactional certainty and procedural continuity.

Conclusion: Toward a More Efficient and Credible Insolvency Administration

The Revised Recommendation Guidelines, 2025 represent a major step toward institutionalising a structured, transparent, and time-efficient mechanism for appointing Insolvency Professionals across corporate and individual insolvency cases. By introducing strict eligibility norms, a uniform EOI regime, workload-based sorting, sectoral alignment, and binding appointment obligations, IBBI has significantly strengthened the governance framework surrounding IP appointments.

These reforms are poised to reduce administrative delays, improve appointment quality, and reinforce professional discipline three critical pillars for sustaining the credibility and efficiency of India’s insolvency regime. As insolvency volumes rise and case complexity deepens, this structured recommendation system will play a decisive role in ensuring that the objectives of speed, fairness, and value maximisation under the IBC are effectively realised.

In a significant regulatory development under India’s insolvency framework, the Insolvency and Bankruptcy Board of India has released two important discussion papers in November 2025 that together signal a decisive move toward deeper governance discipline and enhanced transparency. The first paper, dated 17 November 2025, concerns Minimum Shareholding Requirements for Directors and Partners of Insolvency Professional Entities (IPEs), while the second, dated 6 November 2025, proposes Standardised Templates for Beneficial Ownership and Section 32A Affidavits in the Corporate Insolvency Resolution Process (CIRP).

Taken together, these proposals seek to correct structural imbalances in ownership and control within IPEs and address long-standing inefficiencies in disclosure practices during insolvency resolution. If implemented, these reforms could mark a turning point in how accountability, transparency, and eligibility are enforced across India’s insolvency ecosystem.

Rethinking Ownership and Control in Insolvency Professional Entities

Under the IBBI (Insolvency Professionals) Regulations, 2016, it is mandatory that a majority of directors or partners in an IPE must be registered Insolvency Professionals. However, there is currently no prescribed minimum equity or capital contribution requirement for individual directors or partners. This regulatory gap has, over time, produced a mismatch between ownership, control, and operational responsibility.

IBBI’s internal analysis reveals a concerning trend: in IPEs with ten or more members, nearly 77% of directors or partners hold less than 5% equity, despite collectively handling over 70% of insolvency assignments as Interim Resolution Professionals, Resolution Professionals, and liquidators. This skewed structure raises serious concerns about token ownership, concentration of economic control in a few hands, weakened accountability, and potential conflicts between control and responsibility.

To correct this imbalance, the discussion paper proposes the introduction of mandatory minimum economic participation by every director or partner. The key recommendations include a compulsory minimum 5% shareholding or capital contribution for each director or partner. For large IPEs with more than 20 members, a pro-rata relaxation framework has been suggested to preserve operational feasibility while still ensuring meaningful financial stakeholding.

These measures are intended to realign decision-making power with economic responsibility, promote independent professional conduct, discourage nominal directorships, and enable more effective regulatory supervision. By ensuring that those who control insolvency processes also bear financial risk, IBBI seeks to strengthen ethical conduct and long-term institutional stability within the IPE structure.

Standardising Beneficial Ownership and Section 32A Disclosures

Parallel to governance reforms within IPEs, the second discussion paper addresses a practical but critical challenge in CIRP proceedings—non-uniform and often unreliable disclosures by Prospective Resolution Applicants (PRAs). At present, PRAs are required to submit beneficial ownership information and an affidavit under Section 32A of the IBC. However, in the absence of prescribed formats, these disclosures vary widely in structure, depth, and verifiability.

This inconsistency has contributed to delays in due diligence, fragmented mapping of control structures, repeated objections before adjudicating authorities, and complications in determining statutory eligibility. These concerns were previously flagged by IBBI in its August 2025 discussion on improving CIRP integrity.

To resolve these issues, IBBI has proposed the introduction of two uniform, legally structured templates.

The first is a standardised Beneficial Ownership Template, aligned with the RBI’s KYC Master Directions. This template mandates comprehensive disclosure of all natural persons who directly or indirectly hold more than 10% ownership or control. It requires detailed mapping of layered shareholding structures across multiple levels and specifically includes trustee and beneficiary information where trust structures are involved. Limited relaxation has been proposed for domestic and notified foreign listed entities where detailed ownership data is already available in the public domain.

The second is a standardised Section 32A Affidavit Template, designed to ensure consistent legal declarations regarding immunity under Section 32A. Under this format, the PRA must explicitly declare eligibility under Section 32A(1), confirm that no incoming management or controlling person is connected to the past offences of the corporate debtor, and provide a factual justification demonstrating compliance with Sections 32A(1)(a) and 32A(1)(b). The affidavit further requires affirmation that no proposed controller suffers from disqualification under any statutory ineligibility provisions.

Systemic Impact on the Insolvency Ecosystem

The governance and disclosure reforms proposed by IBBI operate at two distinct but interconnected levels of the insolvency framework. The shareholding reform addresses internal control and accountability within IPEs, while the standardised disclosure regime strengthens external transparency and statutory compliance in CIRP proceedings.

From a structural standpoint, mandatory capital participation will likely reshape internal governance dynamics within IPEs. The shift from symbolic participation to actual economic exposure is expected to discourage name-lending arrangements, increase fiduciary responsibility, and strengthen institutional professionalism.

From a procedural perspective, uniform beneficial ownership and Section 32A templates will significantly improve transactional certainty for Committee of Creditors, resolution professionals, and adjudicating authorities. They will reduce litigation risk arising from ambiguous disclosures, streamline eligibility checks, and enhance confidence in resolution outcomes.

Conclusion: Toward a More Accountable and Transparent Insolvency Regime

Collectively, these twin initiatives reflect IBBI’s evolving regulatory philosophy—one that increasingly emphasises economic accountability, regulatory symmetry, and procedural certainty. By mandating meaningful ownership participation within IPEs and enforcing standardised, verifiable disclosures in resolution processes, the regulator is seeking to reinforce the credibility and institutional maturity of India’s insolvency framework. If implemented in their present form, these reforms are likely to emerge as pivotal governance milestones under the Insolvency and Bankruptcy Code. More importantly, they send a clear signal to the market: insolvency administration in India is moving firmly toward a model rooted in responsibility, transparency, and institutional discipline.

In a significant regulatory move aimed at improving accountability, construction quality, and market discipline in India’s national highways sector, the Ministry of Road Transport and Highways has released a concept note proposing a formal Contractor and Concessionaire Rating System for National Highway projects. Issued through an Office Memorandum dated 11 November 2025, this proposal introduces a structured, transparent, and performance-linked framework for evaluating contractors and concessionaires operating under the EPC, HAM, and BOT models.

This proposed mechanism marks a decisive shift in the government’s approach to infrastructure governance—from contract compliance alone to measurable performance accountability. At a time when highway expansion is occurring at unprecedented scale and speed, the need for consistent quality, safety, and dispute efficiency has become critical. The proposed rating framework seeks to address long-standing concerns of execution delays, structural failures, cost overruns, and uneven maintenance standards.

A 100-Point Performance Matrix Anchored in Delivery and Quality

At the core of the proposal lies a 100-point rating matrix built around eight key performance parameters: timely completion, quality of work, deductions for poor quality, maintenance performance, safety compliance, dispute management, subcontracting practices, and overall performance including user feedback.

What is particularly noteworthy is that timely completion and quality of execution together account for 70% of the total score. This heavy weightage clearly conveys the Ministry’s regulatory priority: projects must not only be completed, but they must be delivered on time and at high construction standards. This approach shifts the industry narrative away from mere financial closure and traffic commencement, towards durable, safe, and sustainable infrastructure.

Negative Marking as a Direct Deterrent Against Substandard Work

One of the most impactful components of the framework is the provision for up to 30 negative marks for poor quality. These penalties are not symbolic; they directly impact the contractor’s overall standing in the market. Deductions may be imposed for a wide range of failures including material deficiencies, pavement distress, major structural defects, damage during construction or the Defect Liability Period, issuance of Non-Conformance Reports, and serious failures in reinforced earth walls or specialised structures.

This negative marking framework assumes even greater significance in light of recent infrastructure failures on key corridors, where premature pavement damage and structural collapses raised serious questions about oversight and quality control. By embedding consequences directly into the contractor’s long-term market reputation, the system introduces a powerful economic disincentive against compromise in construction standards.

Wide Coverage Across Project Types and Timeframes

The rating system is designed to have broad and continuous coverage. All National Highway projects that have been completed or provisionally completed within the last three years will fall within the rating universe. Additionally, ongoing projects that have crossed 180 days from their last appointed date will also be evaluated. This ensures that both recent performance and live execution behaviour are captured, reducing the scope for strategic compliance limited to audit periods.

Projects will be grouped into three cost categories: ₹100 crore to ₹300 crore, ₹300 crore to ₹1,000 crore, and projects exceeding ₹1,000 crore. This cost-based segmentation enables fair comparison across similar project scales while recognising the complexity and risk associated with larger works.

Separate Assessment for EPC–HAM and BOT Models

Recognising the materially different risk profiles and contractual responsibilities across project delivery models, the proposal provides for joint rating of EPC and HAM projects, while BOT projects will be assessed separately. This distinction is crucial. BOT projects involve long-term revenue risk, traffic projections, and operations-based performance obligations, making a common evaluation framework with EPC inappropriate.

Further, the framework allows weightage adjustments for complex structures, including long-span bridges and specialised engineering works. This prevents penalisation merely on the basis of inherent design and geotechnical challenges.

Biannual Ratings and Structured Grievance Redressal

The proposed system introduces a biannual rating cycle, with evaluation rounds closing on 31 March and 31 December each year. Importantly, contractors and concessionaires will be given an opportunity to submit representations or challenges to their provisional ratings. These challenges will be examined by a committee comprising serving or retired senior officers.

This inclusion of a representation mechanism ensures procedural fairness and guards against arbitrary evaluation. Once finalised, all ratings will be placed in the public domain, making performance histories visible to government agencies, lenders, investors, and the broader market ecosystem.

Strategic Implications for the Infrastructure Sector

The implications of this rating system extend far beyond project monitoring. By publicly ranking contractors and concessionaires, the system will directly influence future bid eligibility, financial credibility, and investor confidence. High-performing contractors will benefit from stronger market reputation and improved access to large-value projects, while consistently underperforming entities may face natural market exclusion.

From a policy perspective, this data-driven evaluation will also guide future procurement strategies, risk allocation frameworks, and model concession agreements. Over time, the rating outcomes could shape qualification thresholds, bid weighting systems, and even financing norms across banks and infrastructure funds.

Most importantly, the framework has the potential to institutionalise lifecycle accountability. Contractors will now remain answerable not only for construction, but also for maintenance behaviour, safety compliance, and dispute conduct long after project completion.

A Structural Shift Towards Performance-Led Contracting

The proposed Contractor and Concessionaire Rating System reflects a deeper transformation in India’s infrastructure governance model. It replaces fragmented enforcement with structured visibility, quantified evaluation, and reputational consequences. In doing so, it aligns commercial incentives with public interest—rewarding efficiency, safety, durability, and user satisfaction, while penalising delay, compromise, and dispute-heavy execution.

If implemented effectively, this framework can significantly improve construction quality, restore public confidence in large-scale infrastructure works, and introduce long-awaited discipline into a sector that operates on thin margins and high public exposure.

As India accelerates its highway expansion drive, this performance-linked regulatory instrument may well become the benchmark for future infrastructure accountability frameworks across railways, urban transport, and public works departments nationwide.

India’s economic performance continues to reinforce its position as the world’s fastest-growing major economy, supported by strong policymaking, structural reforms, and resilient domestic fundamentals. With GDP growing by 8.2% in Q2 of FY 2025-26, and the H1 growth rate touching 8%, the country has clearly entered a phase of sustained, broad-based expansion. This growth story stands out amid a global environment marked by uncertainty and slowdown, underscoring India’s rising economic influence and its confident march toward becoming the world’s third-largest economy by 2030.

A Closer Look at the GDP Growth Dynamics

The latest GDP numbers reflect healthy momentum across sectors. Real GDP growth has accelerated sharply to 8.2% in Q2 FY 2025-26 from 5.6% in the same quarter last year. Q1 growth too remained strong at 7.8%, collectively driving an 8% expansion in the first half of the financial year.

A closer examination reveals a balanced economic structure:

• The primary sector posted moderate growth, reflecting stability in agriculture and allied activities.
• The secondary sector grew 7.6% in H1, driven by manufacturing and construction.
• The tertiary sector, the strongest performer, expanded by 9.3%, highlighting the increasing importance of services in India’s GDP composition.

This balanced performance conveys that India’s growth is not dependent on a single sector, but is instead driven by diversified engines across the economy.

Inflation at Multi-Year Lows: A Positive Price Narrative

India’s inflation trajectory presents one of the most encouraging developments. Consumer Price Index (CPI) inflation fell sharply to 0.25% in October 2025, the lowest year-on-year level in the current CPI series. This dramatic softening has been catalysed by a steep decline in food inflation, driven by easing prices of cereals, vegetables, oils, fruits, eggs, and other essentials.

Urban inflation remained mildly positive, while rural inflation turned negative—an indicator of deeper and regionally broad-based price moderation. Wholesale inflation has likewise eased, reflecting lower petroleum, mineral, and manufactured product prices. This dual moderation not only strengthens purchasing power but also provides the monetary space needed to keep interest rates stable while enabling investment-led expansion.

Industrial Production: Manufacturing Leads the Charge

India’s industrial output continues to gain momentum. The Index of Industrial Production (IIP) grew 4.0% in September 2025, driven largely by strong manufacturing performance. Key segments such as basic metals, motor vehicles, and electrical equipment have shown double-digit growth.

Demand-side indicators also narrate an optimistic story. Infrastructure and construction goods grew by more than 10%, followed closely by consumer durables and intermediate goods. Such broad-based industrial expansion not only signals strong domestic demand but also enhances India’s competitiveness in manufacturing.

Government interventions have significantly contributed to this resurgence. The Production Linked Incentive (PLI) scheme, covering 14 strategic sectors, has attracted investments exceeding ₹1.76 lakh crore. Complementary initiatives like Make in India, GST rationalisation, and Skill India have further strengthened the ecosystem, positioning India as an emerging global manufacturing hub.

Labour Market Strengthens: Higher Participation and Job Creation

India’s labour market performance indicates a healthy recovery. The Labour Force Participation Rate (LFPR) rose to 55.4%, the highest in six months. Worker participation has improved, and even female labour force participation historically a challenge reached 34.2%, its strongest level since May 2025.

Formal employment growth is also on the rise, as reflected in the Employees’ Provident Fund Organisation (EPFO) adding more than 21 lakh net members in July 2025. Simultaneously, the Naukri JobSpeak Index reported a 10.1% year-on-year increase in white-collar hiring, fuelled notably by a 61% jump in demand for AI and ML roles. Freshers hiring has grown as well, marking a shift toward newer digital-age skill sets.

Government skilling and employment initiatives PMKVY, NAVYA for adolescent girls, Stand-Up India, PMMY, and wide-scale Rozgar Melas—continue to provide a strong backbone for workforce development and inclusivity.

Rising Exports Despite Global Uncertainty

In a global environment marked by trade disruptions and declining demand, India’s export performance has remained resilient. Between April and October 2025, cumulative merchandise and services exports grew 4.84%, reaching USD 491.80 billion.

Merchandise exports posted modest growth, supported by sectors such as electronics, marine products, cereals, and dairy. Meanwhile, services exports surged nearly 10%, reaffirming India’s global leadership in IT, business process management, and professional services.

Government measures including extended timelines for realisation of export proceeds, credit guarantee support for exporters, and the Export Promotion Mission have strengthened confidence and reduced friction for Indian businesses operating globally.

GST 2.0: A Milestone Reform Supporting Growth

The introduction of GST 2.0, featuring a simpler two-slab structure of 5% and 18%, marks a significant regulatory milestone. The reform has been designed to benefit households, MSMEs, and labour-intensive sectors. With October 2025 GST collections rising to ₹1.96 lakh crore, the revenue trend indicates strong compliance and sustained consumption.

This rationalised structure reduces costs for consumers while expanding the tax base contributing to a more stable and predictable fiscal environment.

A Strong and Stable Outlook Ahead

India’s economic outlook remains optimistic, with domestic institutions and global agencies revising growth projections upwards. Strong domestic demand, steady inflation, rising employment, and expanding exports make India well-positioned to maintain its growth momentum.

As the country progresses toward becoming a USD 7.3-trillion economy by 2030, the convergence of structural reforms, digital transformation, industrial expansion, and labour-market strengthening points to a future that is not just high-growth, but also stable, inclusive, and globally competitive.