India

Hindu Business Line | English | News | Nov. 28, 2025 | Regulation

The IMF’s Executive Board has emphasized the need for careful monitoring of the fiscal impact resulting from India's recent GST rate rationalization and personal income tax rate cuts. These measures, effective from September 22, 2025, are expected to help mitigate the adverse effects of tariffs and keep headline inflation well contained, aided by stable food prices. However, the board cautioned that the fiscal implications of these tax reductions require close observation.

The Board recommended that tariff relief measures should be targeted, transparent, and timebound, and advised that the pace of fiscal consolidation in FY2026-27 should depend on how tariffs affect the output gap. For the medium term, it urged replenishing fiscal buffers through enhanced domestic revenue mobilization and improved expenditure efficiency, including more focused social safety nets. The Board also encouraged India to revise its medium-term debt targets following GDP rebasing planned for next year and underscored the importance of fiscal sustainability at the state level and monitoring contingent liabilities.

Monetary policy support from the Reserve Bank of India (RBI) was endorsed, highlighting a data-dependent approach. The Board suggested that if tariffs persist, further monetary easing could be appropriate given subdued inflation. Enhancing monetary transmission and increasing exchange rate flexibility were also recommended to help India absorb external shocks, with interventions targeted at preventing disorderly market conditions.

India’s economy continues to perform well amid external challenges, with subdued headline inflation, resilient financial and corporate sectors, ongoing fiscal consolidation, and a contained current account deficit supported by service exports. Under a baseline assumption of sustained 50 percent US tariffs, real GDP growth is projected at 6.6 percent in FY2025-26, moderating to 6.2 percent in FY2026-27. However, near-term risks include geoeconomic fragmentation, which could tighten financial conditions and depress trade, foreign direct investment, and growth, as well as unpredictable weather affecting agriculture and inflation. Achieving advanced economy status will depend on advancing comprehensive structural reforms that support higher potential growth.

The Hindu | English | News | Nov. 28, 2025 | Regulation

The Indian government informed the Supreme Court that online money gaming platforms cannot claim a right to trade or profession when such activities result in loss of human lives. The government argued that money generated through these platforms is often laundered or used to fund terrorism, and the rapid spread of online money games contributes to addiction and fatalities, especially among young people. This justification accompanies the push for the Promotion and Regulation of Online Gaming Act aimed at curbing these risks. Online gaming companies requested the court to stay the law, but the government highlighted that an estimated 45 crore people have suffered losses exceeding ₹2,000 crore due to online money games.

The government cited multiple "systemic legal violations" linked to online money gaming, including large-scale tax evasion, money laundering, cross-border illicit fund flows, and potential terror financing. Banks have identified “money mule accounts” connected to these platforms, and the rise in online money gaming since COVID-19 has coincided with a spike in fraud cases involving gaming, gambling, and illegal loan applications. The affidavit also noted risks linked to identity theft, data compromise, and exposure to cyber threats from interactions with unknown players on these platforms.

Data presented by the government showed a significant increase in outward remittances related to online money gaming, exceeding ₹5,700 crore during 2023-2024. The affidavit included reports of deaths linked to online money games across states such as Kerala, Tamil Nadu, Telangana, Andhra Pradesh, and a recent case from Indore in 2025 involving a 13-year-old student. The government defended the Act’s differentiation between real money games—which are hazardous—and e-sports, supporting this classification as a rational and constitutional measure aimed at protecting youth, public health, and preventing terror funding and money laundering.

Fox Mandal | English | AcademicThink | Nov. 28, 2025 | Regulation

SEBI’s Fifth Amendment to the LODR Regulations in 2025 introduces significant changes to the materiality thresholds and approval processes for related party transactions (RPTs). A new Schedule XII replaces the earlier uniform threshold with a graded, turnover-linked framework, increasing the materiality threshold for larger entities up to a cap of ₹5,000 crore. This adjustment mainly benefits larger listed companies, while smaller entities see little change. Listed entities must update their RPT policies and annual materiality computations accordingly.

The amendment expands the Audit Committee’s oversight to subsidiary-level RPTs, requiring prior approval for transactions exceeding ₹1 crore based on prescribed turnover or capital tests for subsidiaries with and without audited standalone financials. This broadens governance responsibility to the parent listed entity and necessitates group-wide RPT monitoring and centralized controls.

Shareholder approvals for material RPTs now have defined tenures: approvals granted at AGMs remain valid only until the next AGM under Companies Act timelines, while approvals from other general meetings expire after one year. Additionally, clarification was added that “holding company” refers strictly to a listed holding company for exemption purposes concerning transactions with listed subsidiaries.

The amendment redefines the employee and key managerial personnel (KMP) benefit scheme carve-out, broadening its scope to include relatives and enforcing stricter uniformity criteria. This makes selective benefit schemes less likely to qualify for exemption and mandates issuers to reassess their current schemes for compliance.

Changes to annual report requirements acknowledge entities formed under special statutes, requiring reports to meet both statutory and SEBI disclosure norms. Reporting timelines are tightened, with mandatory submission to stock exchanges, debenture trustees, and posting on the entity’s website coinciding with dispatch to shareholders or government submissions. For non-convertible security holders without registered emails, entities must send physical letters providing direct links or QR codes to the online annual report, ensuring timely communication.

Listed entities are advised to incorporate Schedule XII into RPT policies, enhance subsidiary-level RPT oversight, plan for renewal of omnibus approvals, review benefit schemes under the new carve-out, and revise annual reporting and communication protocols in line with the amended regulations. This amendment advances SEBI’s objective to reinforce group-level governance and transparency in related party transactions.