India

The Delhi High Court has issued notice in a writ petition seeking directions to ensure accessibility of the FIFA World Cup 2026 broadcast in India through the free-to-air public broadcasting plat form Prasar Bharati.  The petition highlights that the FIFA World Cup has been notified as a “Sporting Event of National Importance” under the Sports Broadcasting Signals (Mandatory Sharing with Prasar Bharati) Act, 2007. It has been submitted that despite the tournament being scheduled to commence on 11 June 2026, no broadcaster has yet acquired the broadcasting rights for India, thereby raising concerns regarding public access to one of the most widely viewed sporting events globally. Appearing on behalf of the Petitioner, Senior Advocate Vaibhav Gaggar submitted that access to sporting events of national importance forms part of the constitutional right to receive information under Article 19(1)(a) of the Constitution of India, and failure to broadcast the tournament would amount to a violation of citizens' constitutional rights under Articles 14, 19(1)(a) and 21. The submissions further drew attention to Section 12 of the Prasar Bharati Act, 1990, which mandates fair, balanced and adequate coverage of sports and events of national importance in furtherance of public interest broadcasting. The petition under Article 226 of the Constitution of India has been filed by Advocate Avdhesh Bairwa and is being represented by Hammurabi & Solomon Partners under the guidance of Shweta Bharti, Jyoti K. Chaudhary and Rohit Jolly.  The matter is being led by Senior Advocate Vaibhav Gaggar along with the Firm’s team comprising: Ankit Konwar, Avdhesh Bairwa, Subhashni Kumari, Prateek Singh, Nishi  Rathore and Nishi Kashyap. The matter raises important questions concerning sports broadcasting regulation, constitutional freedoms and public access to events of national importance.

India’s defence procurement framework has undergone a major shift from import-led acquisition towards indigenous manufacturing, localisation and technology engagement. The Strategic Partnership Model (“SPM”), originally introduced under the Defence Procurement Procedure, 2016and subsequently incorporated into the Defence Acquisition Procedure, 2020 (“DAP 2020”), reflects the Government of India’s long-term policy objective of establishing domestic defence industry capable of manufacturing complex defence products in India with foreign collaboration. Under the present framework, foreign original equipment manufacturers (“OEM(s)”) seeking participation in major defence procurement programmes are increasingly required to collaborate with Indian entities through long-term industrial arrangements involving licensed production, transfer of technology, localisation of supply chains and indigenous manufacturing commitments. The policy objective of the Indian government is no longer limited to procurement of defence equipment. Instead, the emphasis has shifted towards establishment of a domestic defence industrial sector with participation from private sector players, focussing on capability development and gradual technological self-reliance. Policy Evolution of SPM SPM was initially introduced pursuant to the approval of the Defence Acquisition Council in 2017and incorporated as Chapter VII of the Defence Procurement Procedure, 2016. The Ministry of Defence (“MoD”) clarified that the model was intended to institutionalise a transparent and objective mechanism to encourage participation of the Indian private sector in manufacturing defence products such as fighter aircraft, helicopters, submarines and armoured fighting vehicles. DAP 2020 retained and strengthened this framework, and expressly recognised acquisitions under SPM as arrangements involving participation of private Indian firms together with foreign OEMs under the “Make in India” initiative. The said framework intends the Indian strategic partner to act as the system integrator while recognising development partners, specialised vendors and suppliers, particularly from micro, small and medium enterprises (MSME). SPM must therefore be viewed alongside broader policy measures introduced under DAP 2020, including prioritisation of procurement categories favouring indigenous content, introduction of the “Buy (Global – Manufacture in India)” category, increased emphasis on domestic manufacturing and localisation, rationalisation of offset obligations and encouragement for technology transfer and indigenous capability development. These reforms collectively reflect a procurement philosophy where foreign participation is permissible but increasingly tied to local manufacturing commitments and industrial collaboration with Indian entities. Structure of SPM Under SPM, the MoD identifies specific defence segments eligible for acquisition, where Indian private sector entities are shortlisted as strategic partners based on financial, technical and infrastructure capability criteria. Foreign OEMs are separately evaluated on the basis of technological capability, willingness to transfer technology, manufacturing strength and ability to support indigenisation. The model effectively creates a long-term tripartite industrial structure involving MoD as the procuring authority, the Indian strategic partner as the domestic system integrator and the foreign OEM as the technology and platform provider. The selected Indian strategic partner is expected to establish manufacturing capability in India, integrate domestic suppliers and progressively enhance indigenous content. The foreign OEM, in turn, is expected to provide technology access, manufacturing support, training and technical collaboration. Unlike conventional procurement contracts involving direct imports, SPM seeks to establish long-term domestic manufacturing capability through industrial cooperation. Mandatory Indian Partnership Structure A central feature of SPM is that foreign OEMs do not participate independently in procurement programmes (falling within the SPM framework). Instead, participation is structured through partnership with an eligible Indian strategic partner. The framework under DAP 2020 lays continuous emphasis on the role of the Indian entity as the principal integrator and manufacturer. This approach aligns with India’s broader defence industrial policy, including the “Aatmanirbhar Bharat” initiative and localisation-focused procurement priorities. The requirement for Indian participation also aligns with India’s foreign direct investment policy in the defence sector. While significant foreign investment is permitted in defence sector (upto 74% through automatic route and beyond 74% through government route on a case-by-case basis), procurement eligibility under indigenous procurement categories and strategic partnership structures continues to place significant emphasis on Indian ownership, control and domestic manufacturing capability. Recent policy discussions surrounding the proposed Defence Acquisition Procedure, 2026framework further indicate that the Government intends to maintain a distinction between Indian vendors and Indian subsidiaries of foreign OEMs. The policy direction therefore continues to favour domestic industrial control and indigenous manufacturing capacity. Requirement of Technology Transfer Technology transfer occupies a critical position within SPM. The objective is not limited to assembly operations or licensed manufacturing. Instead, the framework seeks gradual transition to advanced manufacturing capability, integration know-how, maintenance capability and support infrastructure within India. Under DAP 2020, foreign OEMs participating in strategic partnership procurements are evaluated on factors such as the extent of technology transfer, depth of indigenisation, manufacturing capability creation in India, lifecycle support commitments, support for domestic supply chains and long-term sustainment capability. The policy therefore incentivises foreign OEMs willing to share meaningful manufacturing and technical capability with Indian partners. In practice, technology transfer arrangements under defence collaborations may include licensed manufacturing rights, transfer of technical documentation, manufacturing process know-how, tooling and testing capability, integration capability, training and technical assistance, maintenance, repair and overhaul (MRO) capability and support for indigenous sourcing and localisation. However, the scope and depth of transfer continue to remain commercially negotiated and subject to export control restrictions imposed by the foreign OEM’s home jurisdiction. License Production and Local Manufacturing Licensed production arrangements remain one of the most common legal and commercial structures applicable under Indian defence collaborations. Under such arrangements, the foreign OEM authorises the Indian strategic partner to manufacture equipment or subsystems in India pursuant to technology licensing agreements and manufacturing assistance arrangements. DAP 2020 encourages domestic manufacturing through multiple acquisition categories, including Buy (Indian - IDDM), Buy (Indian), Buy and Make (Indian), Buy (Global - Manufacture in India) and SPM procurements, which conditions acquisitions on local manufacturing vendors. Accordingly, foreign OEMs mandatorily require local manufacturing capability if they intend to remain competitive in Indian defence procurement markets. The “Buy (Global – Manufacture in India)” category is particularly significant because it allows foreign vendors to establish manufacturing arrangements in India through subsidiaries or joint ventures while complying with indigenous manufacturing requirements. At the same time, strategic partnership procurements continue to favour collaboration with Indian system integrators capable of achieving progressive localisation. Given the long operational lifecycle of defence products, contractual arrangements typically extend beyond immediate manufacturing obligations and include long-term maintenance, upgrades, servicing and sustainment support. Shift from Pure Imports to Industrial Collaboration The overall trajectory of Indian defence procurement policy highlights a gradual movement away from direct imports towards domestic capability creation. SPM reflects this transition most clearly. Foreign OEMs are no longer evaluated solely on capability or pricing. Increasingly, evaluation also depends on willingness to manufacture in India, localisation commitments, technology transfer depth, support for indigenous ecosystems, long-term industrial investment and partnership capability with Indian industry. Consequently, foreign OEMs seeking long-term access to the Indian defence market must increasingly adopt collaborative industrial structures rather than transactional export-led models. Conclusion SPM represents one of the most significant structural reforms in India’s defence procurement system. It indicates the intent of the Indian government to transform India from a defence importer into a manufacturing and technology development hub. Under DAP 2020, foreign OEM participation in major defence programmes is linked with domestic industrial collaboration, technology transfer and localisation commitments. The framework encourages long-term partnerships between foreign technology providers and Indian strategic partners, with the latter expected to emerge as system integrators capable of supporting indigenous manufacturing requirements. For foreign OEMs, market access in India therefore increasingly depends on their ability to partner effectively with Indian industry, structure commercially viable technology transfer arrangements and support progressive indigenisation. For Indian industry, SPM creates an opportunity to participate in high-value defence manufacturing programmes, engage advanced technologies and develop long-term domestic industrial capability. As India continues to recalibrate its defence acquisition priorities towards self-reliance and indigenous manufacturing, SPM is likely to remain central to the future evolution of India’s defence procurement framework. Authors: Mr. Uday Singh Ahlawat - Managing partner Ms. Ishita Goel - Associate

Introduction The IRDAI first introduced the regulatory sandbox framework in 2019 with the objective of permitting controlled experimentation in the insurance sector while maintaining policyholder protection and orderly market development[[1]]. Conceptually, the sandbox operates as a controlled environment for innovation, allowing relaxations to participants from existing compliance requirements without diluting the underlying principles of prudential oversight and policyholders’ interests. The sandbox thus broadly serves a dual function, allowing the IRDAI to oversee experimentation in a controlled setting, while also giving Indian market participants a route to stress test technologies and new business models that are already beginning to influence insurance distribution, underwriting, servicing and claims elsewhere. The market response to the regulatory sandbox framework appears to have been significant. IRDAI’s own press releases indicate that the sandbox initiative has received more than 350 applications across the first two cohorts[[2]], indicating substantial market appetite for testing new products, distribution models, servicing processes and technology-led solutions within a supervised environment. That interest was not merely theoretical, for instance, in the second tranche of approvals granted under the sandbox in 2020[[3]], the IRDAI approved proposals such as Bajaj Allianz’s V-Pay Motor Insurance Product (offering broader coverage for minor scratches, mechanical and electrical breakdowns, etc), TATA AIG’s Parametric Insurance, TATA AIG’s Credit Insurance for TReDS Platform, ICICI Lombard’s Trade Credit Insurance for SME, and several life and health insurance related proposals built around monitoring wellness and prevention such as Health Savings, Outpatient Health Cover, Disease Management and Dynamic Term Cover. Such a framework remains particularly relevant for emerging insurance models that depend on data, automation and/or alternate distribution modes. IRDAI’s own InsurTech Working Group had, even before the IRDAI (Regulatory Sandbox) Regulations 2025 (“2025 Regulations”), identified artificial intelligence and machine learning in underwriting, wearables in life and health insurance, telematics and IoT in motor insurance, and chatbot or voicebot enabled claims handling as some of the technologies likely to reshape insurance business in India[[4]]. Against this backdrop, the 2025 Regulations were notified on 3 January 2025 in furtherance of an exposure draft of 4 November 2024. They repeal the erstwhile IRDAI (Regulatory Sandbox) Regulations 2019 (“2019 Regulations”). The 2025 Regulations do not merely continue the earlier sandbox regime (which permitted only specific categories of innovation). Consistent with the series of IRDAI regulatory reforms in 2024-25 aimed at shifting from the earlier rule-based to a more principle-based framework, the 2025 Regulations materially widen the sandbox scope by permitting applications for promoting or implementing innovation in insurance in India “across the insurance value chain” and in any area requiring relaxation from any provision of the regulations, notification, master circular, guidelines, circular or other communication issued by the Authority, except for areas involving prudential and financial condition/stability matters such as “capital, liquidity, investment, solvency, reserving” and such other areas as decided by the Authority from time to time[[5]]. This article examines the legal architecture of the 2025 Regulations, key changes introduced, potential implications for market participants, and certain aspects common across other sectoral regulators. Legal Architecture of Regulatory Sandbox The IRDAI possesses wide powers under the governing statutory framework (ie, the Insurance Act 1938 (“Insurance Act”) and the Insurance Regulatory and Development Authority Act 1999) to relax certain requirements set out under its regulatory framework including for “promoting efficiency in the conduct of insurance business”. In exercise of these powers, the requirements under the 2025 Regulations are as follows: A.      Eligibility Criteria: Who May Apply? The 2025 Regulations define an “applicant” broadly[[6]]. An applicant may be either a licensed entity (such as an Insurer, intermediary, or insurance intermediary) or an unlicensed individual/entity (any person other than an individual having the minimum net worth specified by the Competent Authority[[7]], or any other person specified by the Competent Authority seeking singly or jointly permission for promoting innovation in insurance in India). This is a notable structural change from the 2019 Regulations. Under the earlier framework, the definition of applicant included any person other than an individual having a minimum net worth of Rs. 10 lakhs for the previous financial year and applications were accepted in specified cohorts through a more standardised/controlled approach[[8]]. This relaxation may also make the sandbox more relevant for arrangements between Insurers and specialist technology vendors. For instance, the IRDAI’s own InsurTech report had contemplated wider use cases[[9]] involving wearables, telematics and data based risk assessment, and the 2025 Regulations arguably allow more room to accommodate such arrangements (than the more prescriptive 2019 Regulations). B.      Scope of Innovation: A wider sandbox Under the 2019 Regulations, the sandbox categories were limited to: “(a) Insurance Solicitation or Distribution (b) Insurance Products (c) Underwriting (d) Policy and Claims Servicing (e) Any other category recognised by the Authority.” However, as noted earlier, R4 of the 2025 Regulations now allows an applicant to seek permission for promoting or implementing innovation in insurance in India across the insurance value chain and in any area that requires IRDAI relaxation, subject to express carveouts for prudential and financial condition matters. In other words, the 2025 Regulations move the sandbox from a closed-list framework to a much broader framework contemplating regulatory relaxations where needed. This in turn opens up a wide range of areas potentially for experimentation, including innovations in customer onboarding and digital authentication processes, blockchain-based claims settlement systems, and embedded insurance through third-party platforms. C.       Conditions for Grant of Permission Similar to the erstwhile Sandbox Regulations, the 2025 Regulations continue to prescribe the considerations for evaluating sandbox applications. However, 2025 Regulations introduces two new considerations[[10]], ie (i) bringing efficiency in insurance business, and (ii) promoting ease of doing insurance business, in addition to the earlier considerations: (iii) promoting innovation beneficial to the insurance sector, (iv) serving policyholders’ interests, (v) conduciveness to orderly industry growth, and (vi) potential to increase insurance penetration. This matters because now under the new framework, an applicant may potentially be able to justify a proposal not only by pointing to novelty or customer benefit, but also by showing that the proposal reduces operational costs and friction for Insurers, improves process efficiency (such as accelerated claims processing timelines), simplifies contract language or regulatory compliance, or otherwise improves how insurance business is carried on. At the same time, the 2025 Regulations expressly require the applicant to comply with the relevant provisions of the Insurance Act, the IRDA Act 1999, the Digital Personal Data Protection Act 2023 (“DPDP Act”), and all other relevant statutes/regulations, thus clarifying that the regulatory relaxations under the sandbox cannot override primary legislation or other applicable statutes such as the DPDP Act[[11]]. D.      Application Process and Period of Experimentation R5 of the 2025 Regulations sets out the procedural framework for filing an application. Such application must be made electronically “in the specified form” and accompanied by a non-refundable fee “as specified”. The Competent Authority may lay down such criteria and parameters for the experimentation stage as it deems fit, and may also determine the liabilities and responsibilities of an applicant that is granted permission. Under the 2025 Regulations, the permission granted is valid for such “experiment period as specified”, and an applicant seeking extension must submit reasons along with a performance report. This is again a notable change, as the framework has moved away from prescribing fixed experimentation periods[[12]]. E.       Monitoring, Responsibility, and Conclusion of Sandbox Proposals The 2025 Regulations require the applicant, after grant of permission, to ensure the integrity of systems, maintain confidentiality of policyholder data, and put in place adequate internal mechanisms for reviewing, monitoring and evaluating its controls, systems, procedures and safeguards[[13]]. More importantly, R9 and R10 make it explicit that the applicant is solely responsible for every action taken in respect of the proposal and remains liable to discharge all obligations thereunder, including legal obligations. Upon completion of the experiment period[[14]], the applicant must submit a report within 30 days on how the proposal met its objectives, along with policyholder feedback and such other information as may be specified. Further, the applicant must also submit a plan on how the proposal would be brought under the existing IRDAI regulatory framework. If satisfied, the Competent Authority may permit the proposal to transition into the ordinary regulatory framework. DPDP Act Compliance: Practical Implications for Sandbox Participants Notably, the 2025 Regulations expressly require applicants to comply with the DPDP Act[[15]], in addition to the applicable insurance statutory and regulatory framework. Under the DPDP Act, consent must be “free, specific, informed, unconditional and unambiguous”, and must be limited to such personal data as is necessary for the specified purpose[[16]]. The Data Principal must also be given notice[[17]] describing the personal data and the purpose of its processing. Further, where consent is the basis of processing, the Data Principal has the right to withdraw consent at any time[[18]], and a Data Fiduciary must erase personal data upon withdrawal of consent or once it is reasonable to assume that the specified purpose is no longer being served, unless retention is necessary for compliance with law[[19]]. For proposals which rely heavily on data collection and processing, the concerns under the DPDP Act are highly relevant since the more predictive a model seeks to become, the more granular the data it may wish to process. For instance, an AI-driven health underwriting model may seek to rely on lifestyle inputs such as exercise patterns, sleep cycles or biometric indicators, a telematics-based motor insurance product may depend on continuous data on driving behaviour, and a wearable-linked wellness model may require persistent monitoring of health parameters. In each such case, the applicant would need to be able to justify why each category of personal data is genuinely necessary for the stated purpose, and how that data will be retained or erased. Consequently, for sandbox participants whose proposals rely on health data, telematics data, behavioural data, wearable-linked data or other personal data, the requirements will not be limited to establishing the regulatory merits of their proposal under the IRDAI framework. They will also need to demonstrate that they possess the systems/infrastructure abilities for handling personal data and complying with the DPDP Act. Inter-operable Sandbox: Relevance for Hybrid Products The 2025 Regulations also recognise that some sandbox proposals may cut across more than one financial sector, for instance, innovations in the insurance space may overlap with related innovations with payments, lending, capital markets, pensions and the wider available digital infrastructure. R12 therefore provides that the process and procedures for regulatory sandbox applications spanning more than one financial sector shall be as specified by the Competent Authority. This assumes importance because the Reserve Bank of India (“RBI”) has, through its official FAQs on the Inter-operable Regulatory Sandbox (“IoRS”)[[20]] clarified that hybrid financial products and services falling within the remit of more than one financial sector regulator (involving RBI, SEBI, IRDAI, IFSCA and PFRDA) may be tested through a common window rather than through multiple standalone sandbox applications. In this regard, the RBI has expressly indicated that cross-sector products such as insurance products linked to banking services, InsurTech, WealthTech and cross-border payment solutions may fall within the IoRS framework. For insurance market participants whose proposal genuinely cuts across or straddles insurance and another regulated financial activity, the IoRS may offer a more efficient route for experimentation rather than parallel applications across multiple sandbox frameworks. Conceivably, hybrid products may also emerge at the intersection of insurance and other regulated financial products or infrastructure. These might include insurance bundled with coupons or other prepaid instruments, investment-linked insurance involving alternative assets such as REITs or InvITs, or products covering loss, theft or fraud associated with NFT-like holdings or even blockchain based lending. Whether any such proposal is ultimately permissible would depend on its exact structure and the applicable regulatory framework, but the IoRS framework would be relevant for such proposals. Practices from international markets indicate that such sandbox arrangements have been useful in testing the commercial viability of such hybrid models. By way of comparative illustration only, the Bank of Lithuania has separately described the testing of a peer-to-peer insurance platform (in which participants form groups to pool funds, collectively decide on compensation for member losses, and share surplus amounts[[21]]) in its regulatory sandbox, and AXA Global Healthcare has described the launch of a virtual healthcare payment card for eligible outpatient treatment (without upfront out-of-pocket expenditure or subsequent reimbursement processes)[[22]]. Concluding Remarks The most significant change under the new sandbox framework for Insurers, insurance intermediaries and potential technology companies, is that experimentation is no longer confined to the closed categories specified earlier. Instead, the framework is now framed as a broader mechanism for permitting innovation “across the insurance value chain”, subject of course to carveouts for prudential and financial norms, as well as continued compliance with provisions under primary legislation. Several operational aspects of the 2025 Regulations remain to be specified by the Competent Authority, including net-worth eligibility, fees, forms, various procedural aspects, and inter-operability of the IRDAI sandbox with other sectoral regulators. In this regard, the 2025 Regulations expressly empower the Competent Authority to issue circulars, guidelines and directions, and to provide clarifications. Further subordinate guidance, whether by way of a “master circular” or otherwise appears likely to be issued by the IRDAI in this regard in order to operationalise the new sandbox framework. The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances. For further information on this topic please contact Tuli & Co Authors: Anuj Bahukhandi (Partner) and Rohan Bangia (Senior Associate) T: +91 120 693 4000, E: [email protected], or W: www.tuli.co.in [1]                 R2 of the erstwhile Sandbox Regulations is in the following terms: “2. Objectives.-- The objectives of these Regulations are: (1) To strike a balance between orderly development of insurance sector on one hand and protection of interests of policyholders on the other, while at the same time facilitating innovation; (2) To facilitate creation of regulatory sandbox environment and to relax such provisions of any existing Regulations framed by the Authority for a limited scope and limited duration, if such a relaxation is needed.” [2]                See IRDAI’s press release on “Granting approval to proposals from Health, Motor and Intermediaries department under the Regulatory Sandbox” of 14 January 2020, and the Exposure draft on IRDAI (Regulatory Sandbox) (Amendment) Regulations 2021, which records that the first cohort of the Regulatory Sandbox received 173 applications and the second cohort received 185 applications. The same note also records that the first cohort covered concepts such as wellness, wearables, usage-based insurance, KYC onboarding, distribution and products. [3]                See IRDAI’s Press Release on “2nd tranche of approvals under the Regulatory Sandbox” of 31 March 2020, available at https://irdai.gov.in/documents/37343/1092396/2nd+tranche+of+approvals+under+the+Regulatory+Sandbox.pdf/5230c60a-46c2-fbfb-8393-5f2a51f34d74. [4]                 See IRDAI’s Report on “InsurTech – Working Group Findings & Recommendations” of 31 July 2018, available at https://irdai.gov.in/documents/37343/366723/Report+on+InsurTech+-Working+Group+Findings+%26+Recommendations.pdf/a3b8f207-f16d-f76f-8660-ea53edabc677. [5]                 R4 of the 2025 Regulations. [6]                 R3(1)(b) of the 2025 Regulations. [7]                 “Competent Authority” means the Chairperson, or such Whole-Time Member, committee of Whole-Time Members or officer(s) of the Authority, as may be determined by the Chairperson. [8]                 R5 of the 2019 Regulations. [9]                 Supra 4. [10]               R6(1) of the 2025 Regulations. [11]               Supra. [12]               Under the original 2019 Regulations, sandbox permission was granted for 6 months, with extension not permissible beyond a further 6 month. After being amended in 2022, the framework allowed permission for up to 36 months, and stated that “under no circumstances” would the applicant be granted extension of time beyond 12 months. [13]               See R9 of the 2025 Regulations. [14]               See R11 of the 2025 Regulations. [15]               R6(1) of the 2025 Regulations. [16]               §6(1) of the DPDP Act. [17]               §5(1) of the DPDP Act. [18]               §6(4) of the DPDP Act. [19]               §8(7) of the DPDP Act. [20]               Please see the RBI’s FAQs on “Inter-operable Regulatory Sandbox (IoRS)” of 17 September 2025, available at https://www.rbi.org.in/commonman/English/scripts/FAQs.aspx?Id=3822. [21]               See Bank of Lithuania, “Peer-to-peer insurance platform – the first innovation tested in the Bank of Lithuania’s regulatory sandbox” (2 March 2021), available at https://www.lb.lt/en/news/peer-to-peer-insurance-platform-the-first-innovation-tested-in-the-bank-of-lithuania-s-regulatory-sandbox. [22]               See AXA Global Healthcare, “Healthcare Payment Card” (20 February 2024), available at https://www.axaglobalhealthcare.com/en/about-us/news/2024/healthcare-payment-card/.

India has emerged as a dynamic destination for entrepreneurship, supported by policy reforms, digital infrastructure, and a growing investor ecosystem. However, regulatory compliance for new companies remains one of the most complex aspects of starting and scaling a business. New companies often face a dense legal framework involving multiple authorities, evolving regulations, and procedural requirements. A clear understanding of these challenges is essential for founders who aim to build a compliant and sustainable business. This article examines the key regulatory hurdles new companies encounter in India, along with practical legal insights to manage compliance effectively. Understanding the Legal Landscape for New Businesses India follows a structured regulatory regime governed by various central and state laws. The legal framework includes company law, taxation law, labour law, environmental norms, and sector specific regulations. The primary legislation governing incorporation and corporate governance is the Companies Act, 2013. New businesses must interact with multiple regulatory bodies such as the Ministry of Corporate Affairs, Income Tax Department, Goods and Services Tax authorities, and sector regulators. Each authority imposes compliance obligations which may overlap or change over time. This creates a layered compliance environment which often confuses first time entrepreneurs. Regulatory Compliance for New Companies The concept of Regulatory Compliance for New Companies refers to adherence to statutory requirements from the stage of incorporation to ongoing operations. Compliance is not limited to registration. It extends to financial reporting, taxation filings, governance practices, employee welfare norms, and disclosures. Failure to comply can result in penalties, legal proceedings, reputational damage, and even business closure. Therefore, compliance must be viewed as a core business function rather than a procedural formality. Key Regulatory Challenges Faced by New Companies Complex Incorporation Procedures The process of incorporating a company in India has improved through digital platforms. Yet, new founders often struggle with documentation, selection of business structure, and regulatory approvals. Choosing between a private limited company, LLP, or other structures requires legal clarity and strategic foresight. Many startups underestimate the importance of drafting accurate incorporation documents such as Memorandum and Articles of Association. Errors at this stage may create complications in governance and investor relations later. Multiple Registrations and Licences Beyond incorporation, businesses must obtain various registrations depending on their operations. These include GST registration, Shops and Establishment licence, Professional Tax registration, and sector specific licences. For instance, a fintech startup may require approval from the Reserve Bank of India, while a food business must comply with FSSAI regulations. The need to deal with multiple authorities increases administrative burden and delays operational readiness. Taxation and GST Compliance India’s tax regime presents one of the most challenging aspects of regulatory compliance. New companies must understand corporate tax obligations, GST filings, TDS deductions, and advance tax payments. GST compliance involves regular return filing, invoice matching, and reconciliation. Frequent amendments in GST rules often create confusion. Startups with limited resources may struggle to maintain accurate records, leading to penalties. Labour Law Compliance Employment regulations in India are governed by a mix of central and state laws. These include laws relating to wages, social security, workplace safety, and employee benefits. New companies must comply with requirements such as Provident Fund contributions, Employee State Insurance, and gratuity provisions. Failure to adhere to labour laws may result in legal disputes and financial liabilities. Compliance becomes more complex when businesses expand across multiple states due to varying state regulations. Corporate Governance and Reporting Obligations Once incorporated, companies must maintain proper governance practices. This includes conducting board meetings, maintaining statutory registers, filing annual returns, and financial disclosures. Many startups overlook governance during early growth stages. However, investors and regulators expect strict compliance. Non-compliance may affect funding opportunities and valuation. Data Protection and Privacy Regulations With increasing digitalisation, data protection has become a critical compliance area. Companies handling personal data must ensure secure processing, storage, and usage. India is moving towards a stronger data protection regime. Startups in technology, ecommerce, and fintech sectors must adopt privacy policies, consent mechanisms, and cybersecurity measures. Any data breach may attract regulatory scrutiny and loss of customer trust. Environmental and Sector Specific Regulations Certain industries such as manufacturing, infrastructure, and pharmaceuticals require environmental clearances and regulatory approvals. Compliance with pollution control norms and waste management rules is mandatory. Startups entering regulated sectors must understand industry specific laws from the beginning. Delays in obtaining approvals may disrupt project timelines and increase costs. Frequent Regulatory Changes India’s regulatory environment evolves continuously to align with economic and technological developments. While reforms aim to improve ease of doing business, frequent changes create uncertainty. New companies must stay updated with amendments in tax laws, corporate regulations, and sector policies. Lack of awareness may result in inadvertent non-compliance. Practical Strategies to Manage Regulatory Challenges Addressing regulatory challenges requires a proactive and structured approach. Founders should focus on building a compliance framework from the early stages of business. Engaging legal and financial experts helps in interpreting complex laws and ensuring accurate filings. Technology driven compliance tools can streamline documentation and reporting processes. Regular internal audits also assist in identifying gaps before they become serious issues. Entrepreneurs planning to setup a company in India should conduct thorough legal due diligence. This includes evaluating regulatory requirements specific to their industry and location. Similarly, those looking to register a startup company in India should align their business model with compliance obligations from the outset. Early planning reduces risks and enhances operational efficiency. Importance of Compliance in Building Investor Confidence Investors place significant importance on regulatory compliance. Startups seeking funding must demonstrate transparency, proper governance, and adherence to legal norms. Due diligence conducted by investors often reveals compliance gaps. These gaps may delay funding or reduce valuation. A well-maintained compliance record signal’s reliability and long-term sustainability. Role of Government Initiatives The Government of India has introduced several initiatives to ease compliance for startups. Programmes such as Startup India aim to simplify procedures, reduce regulatory burden, and promote innovation. Online portals for company incorporation, GST registration, and tax filings have improved accessibility. However, effective utilisation of these platforms requires awareness and proper guidance. Entrepreneurs can refer to official government resources such as the Ministry of Corporate Affairs and GST portal for accurate and updated information. Conclusion Regulatory compliance is an integral part of doing business in India. While the legal framework ensures accountability and transparency, it also presents challenges for new companies. Understanding the complexities of regulatory compliance for new companies allows founders to make informed decisions and avoid legal pitfalls. For entrepreneurs planning to register a startup company in India, early awareness of compliance requirements becomes equally important. A structured compliance strategy, supported by professional advice and technology, can transform compliance from a burden into a strategic advantage. Businesses that prioritise compliance from the beginning are better positioned to scale, attract investment, and build long-term credibility in the market. Authored by: Bhushan Shah, Partner The views expressed in this update are personal and should not be construed as any legal advice. Please contact us for any assistance.