INDIA Law and Practice Contributed by: Anuja Tiwari, Mallika Anand, Pranjal Bhattacharya and Antra Shourya, AZB & Partners
• In October, 2025, the RBI – through the Statement on Developmental and Regulatory Policies – has proposed to allow Indian banks to finance acqui- sitions by Indian companies. The guidelines to enable such financing will be issued shortly. • On 19 June 2025, the RBI issued the RBI (Project Finance) Directions 2025 (the “Directions”) (effec- tive from 1 October 2025), with the intention of providing a unified, principle-based prudential framework for project financing across different types of regulated lending entities. • On 20 January 2025, the RBI issued amendments to the Master Direction on Foreign Investment in India (the “Master Direction”), which introduced critical clarifications on the regime governing downstream investment by Indian entities with foreign ownership or control and aligned the down- stream investment framework with the provisions of the Foreign Exchange Management (Non-Debt Instruments) Rules 2019 (the “NDI Rules”). The amendments confirm that “foreign owned and controlled companies” (FOCCs) are permitted to make downstream investments under the automat - ic route, provided that the relevant sector permits 100% FDI under the automatic route and that pricing guidelines, reporting obligations, and other attendant conditions under the Master Direction and the NDI Rules are duly complied with. • On 9 September 9 2024, the Ministry of Corporate Affairs notified certain amendments to Rule 25A of the CAA Rules, allowing a fast-track merger approval process in cases where a holding com- pany incorporated abroad is proposing to merge into its India-incorporated wholly owned subsidi- ary. Prior to this amendment, the fast-track merger approval process was only available for domestic mergers. This amendment provides an impetus to “reverse flipping” by permitting inbound (cross- border) mergers to be undertaken through the fast- track merger process. • The Competition (Amendment) Act 2023, together with the CCI (Combinations) Regulations 2024 significantly reformulated the Indian merger control regime, with effect from 10 September 2024. A mandatory notification requirement is now trig- gered where the value of a transaction exceeds INR20 billion and the target enterprise has “sub- stantial business operations in India”, including
user base, ownership of IP, or R&D presence. In parallel, the existing asset and turnover thresholds have been revised upwards, statutory review peri- ods have been compressed to 30 calendar days for Phase I and to 150 days overall. The scope of “control” has been broadened to encompass nega- tive rights (eg, veto powers) and access to com- petitively sensitive information, thereby potentially capturing minority acquisitions and private equity investments. Although the Green Channel route for deemed approvals has been retained, its avail- ability has been curtailed in respect of transactions involving overlaps in digital markets or sensitive data sharing. • The Union Budget 2025–26 amended Sections 72A and 72AA of the IT Act, with effect from 1 April 2025 – in the case of amalgamations, the carry-for- ward of accumulated losses will be permitted only for the balance period out of the original eight-year limitation from the year in which such losses were first incurred. Under the earlier regime, the limita- tion period effectively restarted upon completion of the merger, thereby curtailing opportunities for indefinite tax arbitrage through amalgamation- driven structures. • The Union Budget 2024–25 abolished “angel tax” (ie, tax applicable on investments raised by start- ups if the total investment value exceeds the fair market value of the company) for all classes of investors. 6.2 Key Developments in Renewable Energy and Cutting Emissions As part of the Paris Agreement, in August 2022, India updated its “Nationally Determined Contributions”, with an emphasis on increasing the percentage of renewable energy consumption in its energy mix. India formulated the Panchamrit goals (a dedicated five- point strategy) to achieve its carbon reduction goals, which include the reduction of emissions intensity by 45% by 2030 and achieving 50% of non-fossil-fuel- based energy resources out of the total installed elec- tric power capacity by 2030. Legal Developments In this context, the following are some of the most significant legal developments in past three years in relation to renewable energy.
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