India

By: Akil Hirani and Rahul Datta, Majmudar & Partners, India Introduction On December 21, 2025, the Indian government published the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Act, 2025 (the “Amendment Act”) in the official gazette for general information.  The Amendment Act, once notified, will introduce important changes to three (3) key insurance statutes in India, namely, the Insurance Act, 1938 (the “Insurance Act”), the Life Insurance Corporation Act, 1956, and the Insurance Regulatory and Development Authority Act, 1999.  Subsequently, on December 30, 2025, the Indian government notified the Indian Insurance Companies (Foreign Investment) Amendment Rules, 2025 (the “Amendment Rules”) to amend the norms applicable to foreign investment in Indian insurance companies. This update discusses the key changes introduced through the Amendment Act and the Amendment Rules and analyses their ramifications. Key amendments Increase in the foreign investment limit: By virtue of an amendment to Section 2(7A) and the introduction of Section 3AA of the Insurance Act, the Amendment Act will increase the foreign investment limit in the Indian insurance sector from 74% to 100%, albeit with conditions that will be prescribed by the Indian government in due course. Given the importance of the insurance sector to the Indian economy, the large capital requirements, the longer gestation period for investments, and the under penetration of insurance in India, it had become imperative to attract more foreign investment from global insurance companies that understand the sector better.  Permitting 100% foreign ownership will do away with the need to have an Indian partner and will provide more certainty to foreign insurance companies on ownership and control of their Indian operations.  In addition to an increase in insurance penetration and density, the inflow of additional capital in the sector and the possibility of new entrants seeking licenses is likely to encourage innovation and competition in the sector. Amendment to foreign investment norms: The Amendment Rules make corresponding changes to the Indian Insurance Companies (Foreign Investment) Rules, 2015, to enable the liberalization of the insurance sector. In addition, the Amendment Rules also liberalize the governance and operational requirements applicable to Indian insurance companies having foreign investment.  Previously, an Indian insurance company with foreign investment had to ensure that a majority of its directors and a majority of its key management persons were resident Indian citizens.  The Amendment Rules remove this requirement.  However, the requirement to ensure that at least one among the Chief Executive Officer, Managing Director or Chairperson of the board is a resident Indian citizen continues to apply.  Further, Indian insurance companies having foreign investment in excess of 49% were subject to additional requirements in relation to dividend payouts, maintenance of general reserves and appointment of independent directors.  These requirements have also now been removed.  Similarly, for insurance intermediaries having foreign investment, the restrictions on repatriation of dividends, payments to group entities, and requirements relating to board composition have also been done away with. Allowing foreign investors to not only acquire up to 100% equity in Indian insurance companies but also retain significant flexibility in governance and operational matters is a step in the right direction that is likely to make the sector more attractive. Relaxation in approval requirement for transfer of shares: The Insurance Act currently requires an Indian insurance company to obtain prior approval of the Insurance Regulatory and Development Authority of India (the “IRDAI”) for any transfer of its shares where: (a) after the transfer, the total shareholding of the transferee is likely to exceed 5% of the insurance company’s paid-up equity capital; and (b) the nominal value of the shares intended to be transferred by a transferee (including by a group of persons under the same management) will exceed 1% of the insurance company’s paid-up equity capital. The Amendment Act, upon its commencement, will increase the per-transfer threshold in (b) above from 1% to 5%.  The amendment will reduce the compliance burden on insurers where shareholders are seeking to transfer a nominal number of shares (i.e., less than 5%), and improve the ease of doing business in the sector.  That said, the approval requirement highlighted under (a) above will continue to apply independently, and therefore, IRDAI approval will be required for transfers where the shares intended to be transferred aggregate to less than 5% but the transfer is likely to result in the transferee’s shareholding in the insurance company aggregating to more than 5% when aggregated with the transferee’s pre-existing shareholding in the company. Reduction in the net-owned fund requirements for foreign reinsurers: The Insurance Act currently requires foreign reinsurers seeking to operate in India to have net owned funds of at least INR50 billion. The Amendment Act, upon its commencement, will lower the net-owned fund requirements for foreign reinsurers who establish a branch in India to INR10 billion.  This relaxation is expected to encourage the entry of new foreign reinsurers into the Indian market. Extension of certain obligations of life insurers to all insurance companies: The Insurance Act currently requires insurers engaged in the life insurance business to comply with several additional compliance requirements. These requirements include the requirement to: (a) cause an actuary to annually investigate the financial health of its business; (b) not appoint an officer or managing director of another life insurance company, banking company or investment company as its managing director or officer; (c) undertake a prescribed percentage of life insurance business in rural and social sectors (this requirement also applies to insurers engaged in the general insurance business); and (d) adhere to restrictions on declaring and paying dividends to shareholders and bonuses to policy holders.  The Amendment Act, upon its notification, will extend these obligations to insurers engaged in any class of the insurance business, including health insurance, general insurance and reinsurance.  In addition, the Amendment Act will also allow the IRDAI to appoint an administrator to supersede the board of directors of any insurance company and manage its affairs if it determines that the insurer is acting in a manner that is likely to be prejudicial to the interests of its policyholders. Non-life insurers may find it difficult to undertake rural penetration in India as their pricing and business models may not be geared for this.  However, an annual actuarial assessment of the financial health of non-life insurance companies may be a good thing to increase accountability and better protect policyholders. One-time registration for insurance intermediaries: The Insurance Act currently requires insurance intermediaries to renew their registrations every three (3) years. The Amendment Act will permit insurance intermediaries to hold their registrations in perpetuity subject to payment of an annual fee, unless the IRDAI suspends or cancels the registration.  This removal of a periodic renewal requirement will reduce a significant compliance burden for insurance intermediaries and further improve the ease of doing business in the sector. Increase in regulatory oversight: The Amendment Act will give more regulatory oversight powers to the IRDAI, such as: (a) a requirement to obtain IRDAI approval for any transfer or amalgamation of the non-insurance business of any company to or with the insurance business of any insurer (previously, this approval requirement only applied in respect of a transfer or amalgamation of any insurance business between two (2) insurers); and (b) an express recognition of the IRDAI’s right to issue directions for disgorgement where any person has made wrongful profits or averted losses by contravening applicable insurance laws. Enhanced penalties: The Amendment Act will increase the maximum penalty for violations of the Insurance Act and other applicable insurance laws from INR10 million to INR100 million. In addition, the Amendment Act also requires the IRDAI to take into account certain specified factors when determining the quantum of penalty for any contravention or default.  These factors include the nature, gravity, and duration of the default, whether the default is repetitive, whether any disproportionate gain or unfair advantage was derived, whether any loss was caused to policyholders, whether any mitigation actions were undertaken, and the number of policyholders impacted by such default.  The enhanced penalty framework and assessment based on specified factors is likely to strengthen regulatory deterrence while also providing clarity on determination of penalties by the IRDAI. Conclusion The Amendment Act and the Amendment Rules are forward-looking sector-wide reforms that are aimed at accelerating the Indian government’s goal of increasing insurance penetration and insurance density in India.  It marks an important step in updating India’s insurance regulatory framework to reflect current market needs and global best practices.  By allowing greater foreign investment and balancing compliance requirements, the amendments aim to promote growth while safeguarding policyholder interests.  Overall, the reforms have the potential to increase competition, attract greater participation, and support the development of a strong, transparent, and resilient insurance sector in India.

In the evolving world of corporate insolvency, one quiet revolution is unfolding in courtrooms and boardrooms: the rise of third-party funding. For distressed companies, funding is often the difference between resolution and ruin. And for India, still navigating the growing pains of its insolvency regime, Third-Party Funding (“TPF”) and Interim Finance (“IF”) are beginning to step out of the margins and into the mainstream. The Insolvency and Bankruptcy Code, 2016 (“IBC”) promised speed, efficiency, and revival. But it left a lingering question: how does a financially crippled company pursue costly legal claims or stay operational while doing so? TPF and IF now seem to be part of the answer. Significance of TPF in ecosystem of IBC Litigation is expensive. For companies already struggling to survive, the idea of pursuing avoidance transactions, fraudulent transfers, or even defending critical claims may seem like an unaffordable luxury. That’s where TPF steps in. Globally common, but still novel in India, TPF allows external funders to bankroll litigation in exchange for a share in the outcome. And it comes without recourse, if the case fails, the funder bears the loss. The Supreme Court’s green light in Bar Council of India v. A.K. Balaji (2018) opened the doors for this model in Indian courts. But, in insolvency, it’s still early days for Third-party funding. Third-party funding is not just about money; it’s about access to justice. It gives RPs the firepower to pursue claims that would otherwise be shelved. And, crucially, it aligns with the IBC’s mandate: maximizing value for all stakeholders. TPF contributes to the cause of keeping the Corporate Debtor as a going concern While TPF keeps beneficial litigations alive, Interim Finance keeps the company alive. Interim Finance is defined in Section 5(15) of the IBC, which refers to short-term borrowing during the Corporate Insolvency Resolution Process (“CIRP”), approved by the Committee of Creditors (“CoC”). It covers essential costs, from salaries and payments to utilities and asset protection. Section 25 of the IBC empowers the IRP to raise interim finance, subject to the approval of the CoC. The law treats ‘interim finance’ with priority. Section 53(1)(a) puts interim finance at the front of the repayment line, even ahead of secured creditors in liquidation. The RBI has attempted to encourage lenders by classifying such loans as ‘standard assets’. Still, banks remain reluctant to provide interim finance, out of the fear of no guaranteed returns, and priority displacement issues. Creditors hesitate to allow new money to outrank old debts. Regulatory uncertainty only makes it harder to attract grant of interim finance. In such backdrop, the courts have stepped in, like in the case of Edelweiss ARC v. Sai Regency Power, wherein the NCLAT reminded everyone that without interim finance, even a viable company might collapse. It was stressed that value isn’t just in the assets, it’s in continuity. Contributions of TPF as IF So, what happens when third-party funders go beyond funding of mere litigations? In such backdrop, a new model emerges, where TPF begins to plug in the gaps left by traditional IF. Interestingly, the external funders are now showing interest in financing not just legal claims but also operational continuity. Non-recourse funding becomes a tool for resolution professionals to run the business and chase legal rights without draining estate resources. The benefits are immediate: RPs get capital without repayment pressure. Funders do due diligence, boosting confidence in claims. Corporate Debtor stay afloat while claims mature. The CoC sees higher chances of resolution over liquidation. Pertinently, it’s not just financial support, it’s strategic alignment, contributing to the objectives and scheme under the IBC ecosystem. Challenges in the implementation of arrangements for TPF & IF Significantly, the promotion of both, TPF and IF, have to face hurdles. In the case of TPF, the lack of regulatory framework creates discouragement in the reaping of benefits of such beneficial arrangement. India does not have law and regulatory regime, governing third-party funding. Some states, like Maharashtra and Gujarat, have allowed it through amendments to the Code of Civil Procedure. But there’s no uniformity. In such backdrop, there are obvious concerns around TPF, like, (a) whether funders can influence litigation strategy? (b) concerns with respect to confidentiality and privilege, (c) how do courts ensure fairness, keeping in view the interest of funder as against the interest existing under the scheme of IBC? In jurisdictions like the UK and Singapore, these concerns do have answers in the form of their own established regulatory regime, however, in India, such regulatory regime has not yet seen the light of day yet. Similarly, the arrangement of interim finance has its own bottlenecks. Banks worry about promoter-related parties benefiting indirectly. They are unsure how to provision for such loans. And in the backdrop, where NPAs are still a sensitive topic, very few would want to take a risk on a company facing CIRP. Global perspective with respect to TPF It would be useful to refer to the regime being followed in other jurisdictions with respect TPF. In that regard, in United Kingdom, the litigation funders follow a self-regulatory code under the Association of Litigation Funders. Further, Singapore and Hong Kong have legalised and structured TPF in international arbitration. Even in the context of India, the judicial precedents has been encouraging with respect to resort to TPF. From the Privy Council’s 1867 ruling in Ram Coomar Coondoo vs. Chunder Canto Mookerjee to the Supreme Court’s A.K. Balaji judgment, Indian courts have made space for funding, provided it’s fair, transparent, and arms-length. Apart from Judicial moves, the recent policy moves are also significant. In February 2025, the IBBI proposed allowing interim financers to observe CoC meetings, enabling protection of their interest. It’s a small step, but signals that regulators are listening. The Road Ahead Since implementation of IBC in the year 2016, the regime has seen overwhelming “debt resolution”. Now the thrust is upon achieving progress in “Insolvency Resolution”. In that course, India’s insolvency regime is still maturing. In this backdrop, if TPF and IF are nurtured, through clear rules, transparent disclosures, and supportive jurisprudence, they could prove to be game changes in this exercise. Because at its heart, insolvency isn’t just about winding up. It’s about revival, resolution, and restoration of value. And that requires money, sometimes from unexpected places. Authors: Jyoti Kumar Chaudhary, Senior Partner Nikita Sharma, Associate

New Delhi, January 12, 2026: Lakshmikumaran & Sridharan Attorneys (“LKS”) advised Inox Neo Energies Limited (“Inox”), part of the InoxGFL Group, in relation to its acquisition of 250 MWp solar portfolio with assets across 13 States, from the Sun Source Energy Private Limited (“SunSource Energy”), a subsidiary of the Netherlands based SHV Energy. Inox has already acquired 250 MWp of solar projects from SunSource Energy and is in the process of acquiring another 50 MWp capacity, taking the total acquired capacity to 300 MWp. LKS acted as the legal counsel for Inox and advised on all aspects related to the transaction. LKS provided end-to-end assistance to Inox on the deal, from advising on the structure of the transaction to finalizing the deal documentation. The firm was instrumental in leading the negotiations and advised on nuanced aspects of the deal including staggered closing of SPVs spread across various states in India. The transaction team of LKS consisted of Kunal Arora (Partner), Anupam Misra (Associate Partner), Mitushi Garg (Principal Associate), Ria Mehta (Associate) and Satwik Mohapatra (Associate). SunSource Energy was represented by JSA. This acquisition marks a significant step in Inox’s vision to strengthen its presence in the renewable sector and achieve its medium-term targets of 10 GW of installed IPP capacity.

The Indore Bench of the Madhya Pradesh High Court, by a common order dated January 8, 2026, has declined to appoint an arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996 in three employment-related disputes involving TaskUs India Pvt. Ltd., holding that the parties must first exhaust the institutional arbitration mechanism under the Mumbai Centre for International Arbitration (MCIA) Rules. The order was passed by Justice Pavan Kumar Dwivedi in Arbitration Case Nos. 105, 106 and 107 of 2025, filed by Anshul Chawla, Bhagat Singh Bhati and Bhavana Yadav against TaskUs India Pvt. Ltd. and others. The three petitioners, had relied upon their respective employment agreements containing identical dispute resolution clauses providing that any dispute arising out of or relating to employment would be referred to a sole arbitrator appointed in accordance with the MCIA Rules, with the seat and venue of arbitration at Indore. The petitioners invoked arbitration by notices dated July 28, 2025, which were accepted by the company on August 29, 2025, with the Company expressly insisting that the appointment of the arbitrator be carried out strictly in accordance with the MCIA Rules. However, instead of approaching MCIA, the petitioners moved the High Court seeking appointment of an arbitrator. Before the Court, the petitioners contended that the arbitration clause was unworkable, arguing that while the MCIA Rules were applicable, the seat of arbitration was fixed at Indore, whereas MCIA is based in Mumbai. According to the petitioners, both could not operate simultaneously, necessitating court intervention under Section 11. Rejecting this submission, the High Court held that Rule 30 of the MCIA Rules expressly permits parties to agree upon any seat of arbitration, and that Mumbai operates only as the default seat in the absence of such agreement. The Court observed that fixing Indore as the seat while adopting the MCIA Rules did not render the arbitration clause inconsistent or inoperative. The Court further noted that TaskUs had accepted the invocation of arbitration and had not refused to follow the agreed appointment procedure, thereby ruling out any failure of the mechanism contemplated under the contract. Relying on the Supreme Court’s decision in Union of India v. Parmar Construction Company (2019) 15 SCC 682, as well as earlier decisions of the Madhya Pradesh High Court, Justice Dwivedi reiterated that a court may exercise powers under Section 11 only when the agreed procedure for appointment of an arbitrator has failed. Since the petitioners had not approached MCIA for appointment of an arbitrator, the Court held that the petitions were premature. Accordingly, the High Court dismissed all three petitions, while granting liberty to the petitioners to approach the Mumbai Centre for International Arbitration for appointment of a sole arbitrator in accordance with their employment agreements and the MCIA Rules. TaskUs India Pvt. Ltd. was represented by Goswami & Nigam LLP through its Partner, Mr. Nishant Nigam.