Briefing Room

Increase of foreign investment limits in the insurance sector from 74% to 100%, with rationalized regulatory requirements for insurers and intermediaries significantly improved prospects for strategic and control investments. For foreign investors, this is among the most meaningful sector-opening reforms of the year and underscores India’s continued willingness to liberalize selected sectors where long-term capital and expertise are seen as beneficial. Manufacturing, electronics, contract manufacturing and IFSC-linked models also received visible policy support.

India’s investment regime saw measures expanding investment opportunities and IFSC‑linked participation routes for several segments including angel investments, sovereign funds and accredited investors. The IFSCA (Fund Management) Regulations, 2025 provided regulatory depth to Gift City / IFSC, strengthening its role as an onshore–offshore bridge for fund management and cross‑border financial activity.

India expanded global integration through major trade agreements, including India‑EFTA TEPA (Switzerland, Norway, Iceland, Liechtenstein), UK CETA, India‑Oman CEPA, India‑EU FTA, and announced India‑US interim trade framework, supporting tariff liberalization and supply‑chain diversification.

India is more accessible in priority sectors, but increasingly structure‑sensitive, requiring early attention to FDI conditions, tax structuring, treaty protection and applicable IFSC eligibility.

FY25-26 focused on consolidation, strengthening governance and operationalizing reforms. In addition to the revamped tax framework and insurance sector limits,

• The Protection of Interests in Aircraft Objects Act, 2025, was introduced to align Indian law with the Cape Town Convention & Protocol;
• SHANTI Act, 2025, enabled private participation in specified atomic sector activities;
• The Banking Laws (Amendment) Act, 2025 updated the governance and nomination norms in banking sector;
• Four new Labour Law Codes consolidated 29 central laws enabling centralized compliance, digital registrations, returns, filings, and enhanced safety and working-condition mandates, with focus shifting to implementation at state‑level; and
• The Insolvency and Bankruptcy Code (Amendment) Bill, 2025, was passed by the Parliament on April 01, 2026, aimed at speeding up the resolution process and introduced provisions for an out-of-court mechanism, group insolvency and cross-border insolvency.

India’s data-protection reforms focused on data processing, consent management and breach reporting, came to light with phased commencement of the Digital Personal Data Protection Rules, 2025. For investors, data protection is now a live diligence and integration issue rather than a future regulatory concept, particularly in data rich sectors such as IT, fintech, consumer, healthcare, financial services. Transaction planning now needs to consider consent architecture, vendor data flows, children’s data, governance structures, breach response and internal accountability.

India’s competition law regime continued to mature, with increased scrutiny of CCI including investigations, closures and first-ever settlement order under the novel settlement, commitment regime and high-profile investigations into Google, Asian Paints, WhatsApp, and PVR INOX. The Supreme court also introduced effect-based approach requiring concrete evidence of harm in abuse of dominance cases. Policy priorities and enforcements are expected to further consolidate in FY26-27.

• The recent tax policy changes focused on certainty and simplification and investor-targeted incentives over rate-based reset. Further, the government enacted Income‑tax Act, 2025, effective April 1, 2026, to reflect a usability‑driven rewrite rather than radical alteration of core tax policy.
• The government undertook a major overhaul of the existing Goods and Services Tax regime and simplified the pre-existing four tier tax slabs to two tax slabs of 5% and 18%, with a special slab of 40% for certain luxury products.
• Additionally, treaty‑based capital gains planning (particularly via Mauritius) faced and may continue to face heightened scrutiny following the Supreme Court’s Tiger Global decision, reinforcing the need for commercial substance and governance over legacy structuring for treaty access.

• Securities Markets Code, 2025: The Government has proposed consolidation of securities laws into a single code, which is currently under parliamentary review.
• Corporate Laws (Amendment) Bill, 2026: Changes have been proposed to the Company Law regime including company classification, share‑linked benefits, CSR thresholds, audit requirements and penalties, with impact expected from FY26-27.

Outlook: India remains an attractive destination for foreign capital. Success in FY26-27 will depend less on access and more on getting legal, tax, competition and compliance architecture right at the outset.