Recent Developments In India's Corporate And Commercial Laws - April 2026

April 2026 will be remembered as a watershed month in Indian corporate and commercial regulation. Within a single calendar month, the President assented to a sweeping rewrite of the insolvency code, the Ministry of Corporate Affairs (“MCA”) opened a one-time compliance amnesty window and a parallel public consultation on rationalising incorporation rules, the Securities and Exchange Board of India (“SEBI”) operationalised significant changes to the ICDR framework and the Mutual Funds Regulations, and the Income-tax Act, 2025 took effect, replacing a sixty-year-old statute. Layered on top, the Reserve Bank of India’s (“RBI”) overhauled External Commercial Borrowings (“ECB”) regime continued to bed in, and the Supreme Court delivered closely-watched judgments on the contours of Section 9 of the Arbitration and Conciliation Act, 1996.

1. Insolvency and Bankruptcy Code (Amendment) Act, 2026: Presidential Assent

Of all the April 2026 developments, none is more structurally significant than the Insolvency and Bankruptcy Code (Amendment) Act, 2026, which received the President’s assent on 6 April 2026. The Bill introduced in the Lok Sabha on 30 March 2026 by Finance Minister Nirmala Sitharaman and passed by the Rajya Sabha on 1 April 2026 after extensive debate, is the most comprehensive revision of the Insolvency and Bankruptcy Code, 2016 (“IBC”) since its enactment.

Creditor-initiated insolvency resolution

The Amendment Act inserts a new Chapter IV-A creating a Creditor-Initiated Insolvency Resolution Process (“CIRP”). Eligible financial creditors representing not less than 51 per cent in value may initiate the resolution of certain corporate debtors without first invoking the jurisdiction of the Adjudicating Authority. The mechanism is conceptually closer to an out-of-court workout supervised by the IBBI than to traditional admission-driven CIRP, and is expected to compress the front-end of the process materially.

For lenders, the practical consequence is that admission no longer functions as the de facto gatekeeper, a 51 per cent financial-creditor coalition can move the debtor into resolution machinery directly. Counsel advising on inter-creditor agreements, security trustee arrangements, and ICA-NCLT interplay will need to revisit voting thresholds and consent matrices.

Faster admission timelines

The Amendment Act prescribes a 14 day window for admission of insolvency applications after default is confirmed. The intent, repeatedly emphasised in the Statement of Objects and Reasons, is to address the well-documented delays at the admission stage. The practical impact will depend heavily on Adjudicating Authority bandwidth, but the statutory anchor is now significantly tighter.

Expanded look-back for avoidance transactions

The look-back period for avoidance transactions has been extended to two years prior to the insolvency commencement date, with corresponding amendments to Sections 43, 45, 50 and 66. Promoters, related parties, and counterparties to distressed companies should expect more rigorous transaction scrutiny going forward, and acquirers in pre-stressed deals should re-examine their representations, warranties and indemnity packages.

Group and cross-border insolvency

For the first time, the IBC contains a substantive framework for group and cross-border proceedings. The new Chapter VA empowers the Central Government to prescribe the conditions for proceedings where two or more corporate debtors form part of a group. Section 240C operationalises India’s commitment to the UNCITRAL Model Law on Cross-Border Insolvency, providing the basis for recognition of foreign proceedings, judicial cooperation, and coordination.

For multinational groups, this is a long-anticipated reform. Counsel can now advise more confidently on recognition strategies for Indian subsidiaries in foreign proceedings (and vice versa), and on how to structure single entry point resolutions for groups with mixed Indian and offshore liabilities. The detailed rules under both chapters will be issued by the Central Government in consultation with the IBBI.

Restriction on withdrawal of approved plans

Reinforced by the NCLAT’s principal bench ruling later in April 2026 in the TD Toll Road matter, the Amendment Act makes clear that once a resolution plan is approved by the Committee of Creditors (“CoC”) and placed before the Adjudicating Authority, the CoC has no jurisdiction to withdraw or revisit the plan. The NCLAT’s reasoning, anchored in Ebix Singapore Private Limited v. Committee of Creditors of Educomp Solutions Limited, provides early appellate scaffolding for the new statutory position.

Liquidation supervision and avoidance applications

The Amendment Act also strengthens supervision of liquidators, clarifies the treatment of avoidance applications that survive the corporate debtor (a long-running area of uncertainty), and recalibrates the priority of certain claims in liquidation. Counsel advising on distressed acquisitions should re-examine bid structures and indemnity protections.

The direction of travel is unmistakable: India’s insolvency regime has shifted decisively toward creditor control at every stage. For general counsel of large operating companies, the practical takeaways are: revisit financing covenants in light of the lower admission threshold; re-paper inter-creditor frameworks; and treat the two-year avoidance window as a live constraint when executing related-party transactions.

2. Companies Compliance Facilitation Scheme, 2026 (CCFS-2026)

Although introduced by MCA General Circular No. 01/2026 dated 24 February 2026, the Companies Compliance Facilitation Scheme, 2026 went live on 15 April 2026 and will remain in force until 15 July 2026. It is the most significant one-time amnesty extended by the MCA since the Companies Fresh Start Scheme of 2020.

Scheme architecture

CCFS-2026 allows defaulting companies to regularise pending annual filings and financial statements with the MCA-21 registry at a 90 per cent waiver on additional fees levied under Sections 460 and 403 of the Companies Act, 2013. Companies pay only 10 per cent of the accumulated additional filing fees for forms such as MGT-7, AOC-4 and related annual returns.

The scheme also provides a 50 per cent reduction in dormant status fees for companies opting to move into dormancy and a 25 per cent reduction in strike-off filing fees for inactive entities.

Eligibility carve-outs

The relief is not available to: companies against which final notice for strike-off has already been initiated; companies that have already filed strike-off applications; companies that filed for dormant status before the scheme commenced, and companies dissolved pursuant to a scheme of amalgamation.

Post-scheme enforcement

After 15 July 2026, the Registrars of Companies are required to initiate action under the Act against companies that did not avail of the relief and remain in default. For listed entities and large unlisted groups, the scheme is also a useful occasion to clean up dormant subsidiaries, joint-venture vehicles, and legacy SPVs ahead of consolidation exercises.

For in-house teams, the message is operational: identify defaulting subsidiaries and step-down entities in the group, run the cost-benefit analysis on the 90 per cent additional-fee saving versus the cost of preparing back-dated filings, and complete the regularisation well before the July deadline to avoid the inevitable end-of-window congestion on the MCA-21 portal.

3. Draft Companies (Incorporation) Amendment Rules, 2026 - Public Consultation

By Public Notice dated 8 April 2026, the MCA placed in the public domain the draft Companies (Incorporation) Amendment Rules, 2026. Stakeholder comments were invited through the MCA e-consultation portal by 9 May 2026, with the exercise undertaken in coordination with the Indian Institute of Corporate Affairs.

Key proposals

The draft Rules consolidate several existing forms into simplified e-forms such as “E-CHNG” and “E-CON,” rationalise KYC and documentation requirements, and remove what the MCA has described as redundant compliance steps, including affidavits for One Person Company conversion and certain director-related filings.

The proposed Rules also increase the cap on Director Identification Numbers (“DINs”) that may be allotted in a single SPICe+ filing from three to five, optionally integrate EPFO, ESIC, and bank account registrations into the incorporation flow, and shift mandatory communications from registered post toward speed post and electronic delivery.

The draft Rules are still under consultation as of writing; once finalised, they are expected to be notified in late Q2 or Q3 of 2026.

4. SEBI ICDR Lock-In Mechanism for Pledged Shares - Operational Circular of 8 April 2026

On 8 April 2026, SEBI issued an operational circular giving effect to the SEBI (Issue of Capital and Disclosure Requirements) (Amendment) Regulations, 2026, which had been notified on 21 March 2026. The circular provides the procedural mechanism for the lock-in of pledged shares in IPO and FPO contexts.

What changed

Under the existing ICDR framework, promoters’ shares allotted under public issues are subject to a statutory lock-in. Where, however, the shares were pledged at the time the lock-in period commenced, depositories could not technically create a lock-in flag on the encumbered securities. The April 2026 circular addresses this by introducing a regime under which the relevant pledged shares are marked as “non-transferable” for the duration of the lock-in period, without requiring the pledge to be released.

Practical effect

For investment bankers, issuer counsel, and lender-side counsel, this resolves a long-standing operational gap. Promoter-pledged shares, common in family-owned groups raising debt against listed equity, can now be reconciled with ICDR lock-in obligations without forcing a pre-IPO unwind of the pledge. The circular also provides a clearer audit trail for monitoring purposes.

5. SEBI Mutual Funds Regulations, 2026 - Effective 1 April 2026

The SEBI (Mutual Funds) Regulations, 2026, which came into force on 1 April 2026, are the most significant overhaul of the mutual fund framework in over two decades. The reforms reshape the economics of asset management in India and recalibrate the governance expectations placed on Asset Management Companies (“AMCs”).

Base Expense Ratio framework

The single most consequential change is the replacement of the all-in Total Expense Ratio (“TER”) with a Base Expense Ratio (“BER”) regime supplemented by optional performance-linked fees. The new framework is intended to align fee structures with investor outcomes and to drive down the cost of investing in mutual funds. AMCs that choose to charge performance-linked fees must satisfy additional disclosure and benchmarking obligations.

New scheme categories and portfolio rules

The 2026 Regulations introduce a new category, Life Cycle Funds, being open-ended schemes with a stated “target maturity” date that follow a glide path strategy. The category is intended to facilitate goal-based investing for retirement and education planning, and brings India’s product taxonomy closer to international comparators.

The Regulations also impose a 50 per cent ceiling on portfolio overlap between sectoral or thematic equity schemes and other equity schemes managed by the same AMC, and raise certain category-specific exposure ceilings to 80 per cent to ensure that schemes remain true to their stated investment objectives.

Governance and senior management accountability

The Regulations tighten the responsibilities of trustees, AMC boards, and senior management. Trustees are expected to play a more substantive supervisory role, including periodic review of scheme performance against benchmarks, conflict-of-interest monitoring, and oversight of related-party transactions. AMCs will need to review their trustee charters, compliance manuals and code-of-conduct frameworks to align with the new expectations.

6. SEBI Board Reforms of 23 March 2026 - Implementation Through April

While the SEBI board met on 23 March 2026, not in April, a meaningful share of the implementation guidance and operational circulars rolled out through April 2026 and remain live workstreams for compliance teams.

Net settlement for Foreign Portfolio Investors

SEBI approved a move from gross to net settlement of funds for cash-market transactions executed by Foreign Portfolio Investors (“FPIs”). Outright transactions, that is, only buy or only sell in a security within a settlement cycle, can now be netted to determine the final fund obligation. The change is expected to reduce funding requirements, lower transaction costs, and improve liquidity efficiency, particularly during high-volume events such as index rebalancing. Gross settlement is retained for securities to mitigate market risk. The targeted implementation date is 31 December 2026, and custodians and prime brokers are working through the operational changeover during the April–December window.

Alternative Investment Fund reforms

SEBI also approved amendments to the AIF Regulations to address the long-running question of post-tenure liquidation proceeds: schemes can now retain liquidation proceeds of portfolio investments after the completion of the AIF’s tenure, subject to prescribed conditions. A new framework permits the tagging of certain AIFs as “inoperative funds” with lighter compliance requirements until surrender of the registration certificate. For sponsors of legacy AIFs that have completed their investment period but cannot yet exit residual holdings, the framework provides much-needed regulatory certainty.

Social Stock Exchange

The minimum investment threshold for Social Impact Funds under the AIF Regulations has been reduced from ₹2 lakh to ₹1,000, enabling broader retail participation in the Social Stock Exchange ecosystem. Combined with the SEBI Master Circular on the Social Stock Exchange framework (January 2026), this is expected to accelerate listings by social enterprises and Section 8 companies.

7. Competition Commission of India - April 2026

April 2026 saw a steady volume of activity at the CCI across enforcement, appellate review and merger control.

Merger approvals

The Commission cleared a broad set of transactions spanning investment, financial services, hospitality, infrastructure, and renewables, including acquisitions involving Maple-group entities, Avendus Capital, KNR-group SPVs, Nabha Power, Aditya Birla Housing Finance, and Fleur Hotels. The combination filings reflected continued reliance by parties on the Green Channel route for non-overlapping transactions, with several filings clearing within statutory timelines.

Enforcement and appellate developments

The Delhi High Court declined to interfere with the CCI’s ongoing investigation into alleged labour cartelisation involving International Flavors & Fragrances Inc., reinforcing the deference courts have generally shown to the Commission’s procedural discretion at the investigation stage. At the appellate level, the National Company Law Appellate Tribunal upheld the CCI’s findings of bid-rigging in respect of certain Indian Railways tenders, affirming both enterprise-level penalties and the imposition of personal liability on responsible individuals — a continued trend post-2023 amendments.

The CCI also directed an investigation into alleged vertical restraints in the poultry sector and declined interim relief in a defence-procurement matter, reiterating the high threshold for interim intervention at the investigation stage.

Settlement and commitment regime - building track record

The settlement and commitment regime, operationalised in March 2024, continued to attract take-up in April 2026, particularly for matters arising from prima facie orders under Section 26(1). Counsel handling pending investigations should map the 45-day application windows (from receipt of the prima facie order for commitments and from the Director General’s report for settlements) into their case strategy at the outset. Early engagement, as practitioners have observed, can reduce penalty exposure materially relative to contested proceedings.

8. Income-Tax Act, 2025 - Effective 1 April 2026

The Income-tax Act, 2025, notified to take effect on 1 April 2026 and applicable from assessment year 2027-28, replaces the Income-tax Act, 1961 after sixty years of administration. The Central Board of Direct Taxes also notified the Income-tax Rules, 2026 by Notification No. 22/2026 dated 20 March 2026, with effect from 1 April 2026.

Structural simplification

The new Act consolidates the law into 536 sections across 23 chapters, down from the 819 sections of the 1961 Act. While the substantive scheme is largely preserved, tax rates, regimes, and the broad architecture of heads of income are unchanged, the drafting has been rationalised significantly.

Corporate-tax impacts

The most material corporate-tax changes are summarised below.

1. Minimum Alternate Tax (MAT): MAT is proposed to be made a final tax under the new regime, with the rate reduced from 15 per cent to 14 per cent. Set-off of brought-forward MAT credit is allowed only to companies that have transitioned to the new regime, and only to the extent of one-fourth of the tax liability in any year, a deliberate design choice to encourage migration.
2. TDS simplification: The 37 TDS sections of the 1961 Act have been consolidated into 20 sections, with rate uniformity within categories. Withholding compliance for in-house tax teams should become materially simpler over time.
3. Holding periods: Capital gains holding periods have been standardised across asset classes, removing some of the complexity that previously distinguished between listed and unlisted securities and between different categories of debt instruments.
4. Continuity provisions: Rights, benefits, obligations or liabilities that crystallised under the 1961 Act are preserved. Carry-forward of losses, unabsorbed depreciation, and deferred expense items continue to be available even after repeal.

9. Recent Arbitration Developments - Supreme Court of India

The Supreme Court delivered two notable arbitration-related judgments in April 2026 that bear on commercial practice.

Home Care Retail Marts Private Limited vs. Haresh N. Sanghavi (2026 INSC 415, decided 24.04.2026)

The Court resolved a conflict on the availability of Section 9 of the Arbitration and Conciliation Act, 1996 to an unsuccessful party in arbitration at the post award stage. The Court held that an unsuccessful party is not barred from invoking Section 9 after the award, on the rationale that Section 9 confers wide powers on courts to grant interim measures “before, during, or after” arbitral proceedings but prior to enforcement of the award under Section 36.

The judgment opens a route to interim protection in respect of attachment, deposit or security pending the disposal of Section 34 proceedings, provided the threshold criteria for interim relief are independently established. Award-creditors should expect a corresponding uptick in pre-enforcement interim applications and may wish to recalibrate strategy on security demands at the award-confirmation stage.

MCM Worldwide Private Limited vs. Construction Industry Development Council (2026 INSC 425, decided 21.04.2026)

The Court considered the interplay between a civil suit referred to arbitration under Section 8 of the Act and challenges to maintainability of claims on limitation grounds raised during the arbitral proceedings. The judgment reinforces the principle that limitation issues are arbitrable and should ordinarily be decided by the tribunal, with curial intervention reserved for the post-award stage.

Both judgments continue the trajectory of judicial minimalism in supervisory review of arbitration, a trend that practitioners advising on seat selection and dispute-resolution clauses should factor into their drafting.

10. RBI’s Revised External Commercial Borrowings Regime - Implementation Through April 2026

The Foreign Exchange Management (Borrowing and Lending) (First Amendment) Regulations, 2026, notified by the RBI with effect from 16 February 2026, continued to bed in through April 2026 and have already begun to reshape cross-border financing practice.

Expanded borrower universe

All resident entities incorporated, established or registered under central or state law are now eligible to raise ECBs, including companies and LLPs irrespective of FDI eligibility, entities undergoing restructuring or insolvency resolution, and borrowers with pending FEMA investigations. This is a substantial liberalisation.

Higher borrowing ceilings

Eligible Indian borrowers may now raise ECBs up to 300 per cent of net worth (per the last audited balance sheet), including both external and domestic borrowings, a significant uplift from the previous framework.

Broader recognised-lender pool

Recognised lenders now include all persons resident outside India, irrespective of whether their jurisdiction is FATF- or IOSCO-compliant. This is expected to widen the pool of capital available to Indian borrowers, particularly mid-cap issuers that previously struggled to qualify lenders.

Simplified reporting

Monthly Form ECB-2 certification has been withdrawn. Form ECB-1 is now the principal filing for obtaining the Loan Registration Number, and a revised Form ECB-1 must be filed within seven days of month-end to report changes to previously reported parameters.

Currency flexibility

ECBs can be raised in any foreign currency or in INR, with the ability to convert between currencies during the life of the loan. This is a meaningful enhancement to currency risk management and is particularly useful for borrowers with INR-denominated revenue streams seeking to mitigate USD–INR mismatch.

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.