The Finance Minister of India presented the Union Budget for the financial year 2024-25 (Budget) on 23 June 2024. The Budget, particularly, focuses on employment, skilling, MSMEs, and the middle class along with all-around prosperity. Some key highlights of the Budget are: India’s real GDP grew by 8.2% in FY
On 16 April 2024, the Indian Ministry of Finance amended the Foreign Exchange Management (Non-debt Instruments) Rules, 2019 (NDI Rules) revising the permissible limit of foreign direct investment (FDI) in the space sector effective the date of the notification i.e. 16 April 2024. Under the amended FDI policy, 100% FDI
The Indian Government has today notified The Foreign Exchange Management (Non debt Instruments) Amendment Rules, 2024 (Amendment Rules) prescribing provisions pertaining to direct listing of shares of Indian companies on the stock exchanges outside India. The Amendment Rules have come into force from today when these have been published in
In December 2023, 3 new Criminal Legislations, namely the Bharatiya Nyaya Sanhita, 2023, the Bharatiya Nagarik Suraksha Sanhita, 2023, and the Bharatiya Sakshya Adhiniyam, 2023 replaced the Indian Penal Code, 1860 (IPC), Code of Criminal Procedure, 1973 (CrPC), and the Indian Evidence Act, 1872 (Evidence Act), respectively. These 3 new
On 09 August 2023, the Indian Parliament passed the much awaited Digital Personal Data Protection Bill, 2023 (“DPDP Bill“). The DPDP Bill seeks to introduce data protection law with minimum disruption while ensuring necessary change in the way Data Fiduciaries (i.e. persons who determines the purpose and means of processing
On 02 August 2023, the Indian Parliament passed the Jan Vishwas (Amendment of Provisions) Bill, 2023 (Bill), which proposes to amend and/ or decriminalise 183 provisions in 42 Central Acts administered by 19 different Ministries/ Departments, with the aim of boosting the ease of doing business as well as ease
On 6 April 2023, the Indian Ministry of Electronics and Information Technology (MeitY) notified the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Amendment Rules, 2023 (Amendment Rules), primarily for online real money games, to amend the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 (IT
Below are certain legal and regulatory developments in India, during 2022, which provide a snapshot on the pace with which the Government of India (GoI) is bringing in reforms to contribute to a strong and robust economy: The Ministry of Corporate Affairs, GoI (MCA): notified amendments to the Limited Liability
The Finance Minister of India, Mrs. Nirmala Sitharaman, presented the Union Budget for the financial year 2023-24 on 1 February 2023 (Budget), which draws the blueprint for India @100, presenting a vision for ‘Amrit Kaal’ (the best and the most auspicious time), for an empowered and inclusive economy for a prosperous India.
The Government of India in consultation with the Reserve Bank Of India (RBI) on 22 August 2022 notified the Foreign Exchange Management (Overseas Investment) Rules, 2022 (Overseas Investment Rules) and Foreign Exchange Management (Overseas Investment) Regulations, 2022 (Overseas Investment Regulations) in supersession of Foreign Exchange Management (Transfer or Issue of
The Income Tax Appellate Tribunal, New Delhi, India (ITAT) on 6 July 2020, in DDIT, Circle-2(2), New Delhi v M/s. Yum! Restaurants (Asia) Pte. Ltd, decided on whether a seconded employee of a non-resident entity amounted to the creation of a permanent establishment (PE) as per the India-Singapore Agreement For
On 5 June 2020, the President of India issued the Insolvency and Bankruptcy Code (‘Code’) (Amendment) Ordinance, 2020 (‘Ordinance’) due to the uncertainty caused by the Covid-19 pandemic and the related economic fallout. The Ordinance puts a permanent bar on the initiation of corporate insolvency resolution proceedings for any defaults
The Ministry of Corporate Affairs (MCA), vide two notifications issued on 20 January 2018, revised the Companies (Incorporation) Rules, 2014 and the Companies (Registration Offices and Fees) Rules, 2014 (together, “Amendments”). The Amendments, effective from 26 January 2018, revise the procedure in relation to incorporation of a company in India and the associated fee. The Amendments further promote India’s continuing efforts in Ease of Doing Business as the revised process is intended to be simpler and quicker.
On 15 November 2019, the Central Government notified the Insolvency and Bankruptcy (Insolvency and Liquidation Proceedings of Financial Service Providers and Application to Adjudicating Authority) Rules, 2019 (FSP Rules). The FSP Rules aim to provide a framework for insolvency and liquidation of systemically important financial service providers (FSPs) other than
On 20 September, 2019, the Finance Minister announced a reduction in corporate tax rates estimated to provide cumulative tax relief of INR 1,45,000 Crore (approx. USD 21 billion) to corporate tax-payers. A Press Note issued by the Ministry of Finance on 20 September 2019 (Press Note) highlights the key amendments to the corporate tax regime introduced by the Taxation Laws (Amendment) Ordinance, 2019 (Ordinance) and further proposes increased avenues for corporate social responsibility spending. Some of the key features of the
The Indian Government had constituted the Competition Law Review Committee on 1 October 2018, with members from the Competition Commission of India (CCI) and the Insolvency and Bankruptcy Board of India and headed by the Corporate Affairs Secretary (Committee). The Committee was tasked with reviewing the competition regulations and suggesting necessary changes to re-calibrate and strengthen the existing legal framework in order to promote best practices. The Committee submitted its report to the Indian Finance Minister on 14 August 2019 (Report),
The first session of the Indian Parliament after re-election of Prime Minister Narendra Modi concluded on 7 August 2019 (Session). The Session witnessed passage of more than 30 bills with the Lower House of the Indian Parliament (Lok Sabha) sitting for 281 hours in 37 days (approx. 135% of its scheduled hours) and the Upper House of the Indian Parliament (Rajya Sabha) sitting for 195 hours (approx. 103% of its scheduled hours) in 35 days – significantly higher than their respective average in past decades.
Based on the recommendations of stakeholders, the Reserve Bank of India (RBI) has liberalised end-use provisions for external commercial borrowings (ECBs) through a circular dated 30 July 2019 (Circular). Per the Circular, eligible borrowers are now permitted to raise ECBs from recognised lenders, except foreign branches/ overseas subsidiaries of Indian banks, for the following purposes: Working capital purposes and general corporate purposes, with a Minimum Average Maturity Period (MAMP) of 10 years. Non-Banking Financial Companies (NBFCs) can also raise ECBs for
The Finance Minister of India presented the Union Budget for India for the financial year 2019-2020 on 5 July 2019 (Budget), which aims to bolster several sectors such as infrastructure, roads, railways, agriculture, education, rural development, banking and finance thereby increasing jobs and bringing rural and urban India closer together to make India a USD 5 Trillion economy by 2024, as it moves towards becoming a USD 3 Trillion economy this year with the focus being on promoting ease of living for its citizens and ease of doing business in India and with India maintaining a 7% GDP growth in 2019-2020 as per the Economic Survey presented by the Government prior to the Budget.
On 7 June 2019, the Reserve Bank of India (RBI) issued the Reserve Bank of India (Prudential Framework for Resolution of Stressed Assets) Directions 2019 (Directions), with the intent of ‘providing a framework for early recognition, reporting and time bound resolution of stressed assets.’ The Directions replace the Resolution of Stressed Assets – Revised Framework Circular (2018 Circular) issued by the RBI on 12 February 2018 which was struck down by the Supreme Court of India in the case of Dharani
The Indian Parliament on 8 August 2016, passed the much awaited and widely discussed legislation over the past several years, the Constitution (One Hundred and Twenty Second Amendment) Bill (commonly known as the “GST Bill”) to introduce Goods & Services Tax (GST) intending to subsume all indirect taxes under a single indirect taxation regime. The GST Bill is the biggest tax reform by India since its independence in 1947 which will certainly ease doing business in India once fully implemented. The GST Bill provides for levying GST on all transactions involving supply of goods and services, except those specifically excluded, by conferring concurrent taxing powers to both the Government of India (GoI) and the State Governments.
The Union Cabinet on 29 June 2016, approved the Model Shops & Establishments (Regulation of Employment and Conditions of Service) Bill, 2016 (“Model Bill”), which was introduced by the Ministry of Labour and Employment in January this year. The Model Bill seeks to ensure uniformity of the legislative provisions in various states to facilitate the ease of doing business and generate employment opportunities. States can adopt or carry out necessary amendments in their respective laws in accordance with the Model Bill.
The Government of India (GOI) has, with the objective of providing major impetus to the growth of investment and employment creation in India, further liberalized the Foreign Direct Investment (FDI) regime on 20 June 2016 pursuant to a high-level meeting chaired by the Prime Minister.
The Ministry of Corporate Affairs (MCA) has, with effect from 1 June 2016, notified the constitution of the National Company Law Tribunal (NCLT) and the National Company Law Appellate Tribunal (NCLAT), pursuant to which 11 (eleven) NCLT benches have been constituted with each bench exercising different territorial jurisdiction i.e. 2 (two) at New Delhi and 1 (one) each at Ahmedabad, Allahabad, Bengaluru, Chandigarh, Chennai, Guwahati, Hyderabad, Kolkata and Mumbai. The NCLAT will be situated in New Delhi.
The Reserve Bank of India has on 20 May, 2016, notified the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) (Seventh Amendment) Regulations, 2016 (Amendment Regulations) pursuant to which:
(i) a purchaser in a cross border share transfer is permitted to make payment of up to 25 per cent of the total consideration on a deferred basis within a period not exceeding 18 months from the date of the share transfer agreement;
In yet another step towards pushing growth in the IT and service sector, the Government of India through the Department of Industrial Policy and Promotion (“DIPP”) has issued the “Guidelines for Foreign Direct Investment on E-commerce” vide a press note (2016 Series) on 29 March 2016 (“Guidelines”) thereby liberalizing and providing clarity to Foreign Direct Investment (“FDI”) in e-commerce sector in India. Under the Guidelines, DIPP has reiterated that while FDI is permitted up to 100% under the automatic route in Business-to-Business (“B2B”) e-commerce, the same is prohibited in Business-to-Consumer (“B2C”) e-commerce. However, FDI in B2C e-commerce is permitted in the following circumstances:
With the view of liberalizing and providing clarity to Foreign Direct Investment (“FDI”) in e-commerce sector in India, the Department of Industrial Policy and Promotion (“DIPP”) has issued the “Guidelines for Foreign Direct Investment on E-commerce” vide a press note (2016 Series) on 29 March 2016 (“Guidelines”). Under the Guidelines, DIPP has reiterated that while FDI is permitted up to a 100% under the automatic route in Business to Business e-commerce (“B2B”), the same is prohibited in Business to Consumer (“B2C”) e-commerce.
In order to promote the ease of reporting of FDI transactions, the Reserve Bank of India (“RBI”) has issued a circular making it mandatory for online filing of the following forms on the e-Biz Portal :
(i) Advance Remittance Form (“ARF”) which is used by companies to report FDI inflows to the RBI;
The Payment of Bonus (Amendment) Act, 2015 (Act) received the assent of the President of India on 31 December 2015 and is deemed to have come into force on 01 April 2014. Some salient features of the Act are:
The definition of “employee” has been amended to mean any person (other than an apprentice) employed on a salary/ wage not exceeding INR 21,000 (Rupees twenty one thousand) per month in any industry to do any skilled or unskilled manual, supervisory, managerial, administrative, technical or clerical work for hire or reward, whether the terms of employment be express or implied.
The year of 2015 can be recognised as the year for commencement of legal reforms in India. Some of the key legal developments during the year 2015 are as follows:
As a measure to improve the ease of doing business in India, the Ministry of Corporate Affairs (“MCA”) issued:
The Companies (Amendment) Act, 2015 was enacted which removed the requirement of a minimum paid up share capital amount for private and public companies and requirement of special resolution for related party transaction and introduced provision stipulating punishment for contravention for acceptance of deposit from public.
