Welcome to the latest edition of The India Governance Watch! The second half of December 2025 saw a concentrated set of policy actions spanning financial regulation, trade, infrastructure, and administrative reform. This edition of India Governance Watch documents how these interventions focused on restructuring institutional frameworks rather than incremental policy adjustment.
Key measures included the opening of the insurance sector to 100% foreign direct investment in response to India’s low general insurance penetration of ~1% of GDP, the consolidation of securities regulation through the Securities Markets Code Bill, and the repeal of 71 obsolete laws, taking the post-2014 total to 1,577 enactments. Externally, India concluded trade agreements granting near-universal duty-free access for exports to Oman and New Zealand, alongside defined services and investment commitments.
Parallel reforms in energy pricing, transport capacity, and rural employment design indicate a shift toward execution efficiency, cost rationalisation, and outcome-linked public spending. This document presents a structured account of these developments across sectors and policy domains.
I. Economic Growth And Structural Reforms :
A. Policy Updates
Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Act, 2025 - Ministry of Finance
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The Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Act, 2025 that recently received President’s assent, modernizes India's insurance framework by amending key acts. Its major reforms include permitting 100% FDI in the insurance sector, simplifying compliance (like one-time licensing), aligning with the Digital Personal Data Protection Act, 2023, and drastically reducing the Net Owned Fund (NOF) requirement for foreign reinsurance branches from ₹ 5,000 crore to ₹ 1,000 crore. These changes are aimed at achieving the "Insurance for All by 2047" mission and boosting general insurance penetration, which is currently low at about 1% of GDP compared to the global average of 4.2%.
The Securities Markets Code Bill, 2025 Introduced In Lok Sabha - Ministry of Finance
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The Securities Markets Code Bill, 2025, introduced on December 18, 2025, aims to consolidate the legal framework for securities markets by replacing the SEBI Act, 1992, the Depositories Act, 1996, and the Securities Contracts (Regulation) Act, 1956. Key provisions include expanding the SEBI board from nine to fifteen members, mandating conflict-of-interest disclosures for board members, and decriminalizing minor, procedural offenses by converting them into civil penalties, while retaining criminal sanctions for serious market abuse. These reforms are expected to boost investor confidence, reduce regulatory friction, and encourage market innovation and participation.
Amendments To Pension Fund Regulatory And Development Authority (PFRDA), 2015, To Enhance Subscriber Flexibility - Ministry of Finance
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The Pension Fund Regulatory and Development Authority (PFRDA) has substantially revised the NPS Exits and Withdrawals Regulations, 2015, to improve flexibility and liquidity for non-Government subscribers. Key amendments include increasing the maximum lump-sum withdrawal at normal exit to 80% (reducing mandatory annuity to 20%), removing lock-in for the All Citizen Model, raising the limits for a 100% lump-sum exit to ₹8 lakh and ₹12 lakh, extending the age limit to 85 years for both entry and exit, and permitting regulated lenders to place a lien on up to 25% of a subscriber’s own contribution. These changes generally lessen the requirement for annuity purchases and aim to encourage investment in potentially higher-return retirement savings.
SEBI Simplifies Basic Services Demat Account Norms To Boost Retail Participation - Securities and Exchange Board of India (SEBI)
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The Securities and Exchange Board of India has updated the norms for Basic Services Demat Accounts (BSDA) to increase retail participation and simplify compliance. Key changes include excluding Zero Coupon Zero Principal bonds (ZCZPs) and delisted securities from the BSDA eligibility calculation, standardizing the valuation of illiquid holdings, and mandating quarterly reassessment of account eligibility by Depository Participants. These updates benefit small investors by minimizing unintended charges and simplifying market engagement, while also reducing compliance complexity and mis-selling risk for Depository Participants.
B. Announcements
Quality Council Of India Announced Next-Generation Quality Reforms To Strengthen Quality Ecosystem – Ministry of Commerce and Industry
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The Quality Council of India (QCI) has introduced next-generation quality reforms to align with the Viksit Bharat 2047 vision, modernizing quality assurance across sectors like healthcare, laboratories, manufacturing, and MSMEs. Key initiatives include: introducing Q Mark – Desh ka Haq to combat fraudulent certifications; shifting to a trust-based, paperless Accreditation Model; establishing Quality Setu for grievance resolution; and significantly expediting timelines. Specifically, the National Accreditation Board for Testing and Calibration Laboratories (NABL) and the National Accreditation Board for Certification Bodies (NABCB) will offer approvals/accreditations in 48 hours. Additionally, 5,000 laboratory professionals are scheduled for training in 2026, and the National Accreditation Board for Hospitals (NABH) will implement graded penalties and AI-enabled surveillance.
India-Oman Comprehensive Economic Partnership Agreement (CEPA) Signed - Ministry of Commerce and Industry
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The Comprehensive Economic Partnership Agreement (CEPA) between India and Oman is a major step in India's Gulf trade strategy. The agreement grants India zero-duty access on 98.08% of Oman's tariff lines, covering 99.38% of India’s exports by value, benefiting sectors like textiles, gems and jewellery, and pharmaceuticals. India will liberalize 77.79% of its own tariff lines, protecting sensitive sectors. The CEPA also features extensive services commitments from Oman, including enhanced mobility for Indian professionals and 100% FDI access for Indian firms in key services, alongside provisions for expedited pharmaceutical approvals and mutual recognition of standards. The deal is expected to boost bilateral trade beyond $10 billion and strengthen economic integration.
India – New Zealand Free Trade Agreement Signed - Ministry of Commerce and Industry
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The Free Trade Agreement (FTA) between India and New Zealand was finalized in December 2025, one of India's quickest FTA negotiations. Key aspects of the agreement include duty-free access for 100% of Indian exports, a $20 billion investment commitment over 15 years, and significant gains for labour-intensive Indian sectors like textiles and gems and jewellery. The agreement fully protects India's sensitive dairy and agricultural sectors. New Zealand offered its most comprehensive services package to date, covering 118 sectors, with new annexes on Health and Traditional Medicine, and Student Mobility. Professional mobility is enhanced with assured post-study work pathways for STEM graduates and a 5,000-visa window for skilled Indian professionals.
Market Access Support Intervention Launched To Boost Export Market Entry - Ministry of Commerce & Industry
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The Government of India has introduced the Market Access Support (MAS) Intervention under the Export Promotion Mission to improve global market access for exporters, with a special focus on MSMEs, first-time exporters, and emerging sectors. Key features include providing targeted support for international trade events, replacing ad-hoc participation with a structured, data-driven strategy supported by a 3–5 year advance event calendar, mandating a minimum of 35% MSME participation, and offering partial airfare support for small exporters (turnover up to ₹ 75 lakh). This initiative aims to ensure sustained export growth and deeper global value chain integration.
Centre Rationalises Debt Recovery Tribunal Jurisdiction In West Bengal And Andaman & Nicobar Islands - Ministry of Finance
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The Central Government has revised the territorial jurisdiction of Debt Recovery Tribunals (DRTs) for West Bengal and the Andaman and Nicobar Islands to improve administrative efficiency and reduce disputes. Key changes include implementing police station-wise jurisdiction in Kolkata and reallocating districts in West Bengal to balance caseloads. This revision also provides a clear designation for the competent DRT in the Andaman and Nicobar Islands. These adjustments are intended to streamline debt recovery proceedings, requiring banks, financial institutions, and legal practitioners to update their filing practices.
II. Infrastructure, Technology And Sustainability:
A. Policy Updates
The Sustainable Harnessing And Advancement Of Nuclear Energy For Transforming India (SHANTI) Act, 2025 – Department of Atomic Energy
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The SHANTI Act, 2025, modernizes India's nuclear legal framework by consolidating fragmented laws, aligning the sector with clean energy goals, and introducing key reforms. The Act permits limited private participation, grants statutory status to the Atomic Energy Regulatory Board, introduces a graded nuclear liability framework, and formalizes the regulation of non-power applications. It also establishes dedicated dispute resolution mechanisms. This legislation is expected to attract up to $150 billion in nuclear investment and facilitate 100 GW of capacity by 2047, bolstering energy security and creating high-skill jobs.
Petroleum and Natural Gas Regulatory Board (PNGRB) Implements ‘One Nation, One Grid, One Tariff’ For CNG And Domestic PNG – Ministry of Petroleum and Natural Gas
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The Petroleum and Natural Gas Regulatory Board (PNGRB) has reformed the unified natural gas transportation tariff, effective January 1st, 2026, to promote the use of CNG and domestic PNG. Key changes include reducing tariff zones from three to two ('up to 300 km' and 'beyond 300 km') and fixing tariffs at ₹ 54.00/MMBtu and ₹ 102.86/MMBtu, respectively. Crucially, a uniform transportation charge of ₹ 54.00/MMBtu will be applied to CNG and domestic PNG consumers nationwide. This reform is expected to align with the "One Nation, One Grid, One Tariff" objective, save the City Gas Distribution (CGD) sector approximately ₹ 1,000 crore annually in transportation costs, and lead to consumer price reductions of ₹ 1.25–2.50 per kg for CNG and ₹ 0.90–1.80 per SCM for domestic PNG.
Amendment Recycling Of Ships Rules, 2025 Notified To Operationalise Ship Recycling Framework – Ministry of Ports, Shipping and Waterways
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The Central Government has implemented its framework for safe and environmentally sound ship recycling, effective from December 24, 2025, through the Recycling of Ships (Amendment) Rules, 2025. This action brings into force the Recycling of Ships Rules, 2021 (issued under the Recycling of Ships Act, 2019), which mandates compliance with the Hong Kong Convention (HKC). Key requirements include mandatory authorization for recycling facilities, the Inventory of Hazardous Materials (IHM), strict worker safety and waste management norms, and inspection by the Directorate General of Shipping. This regulatory move aims to enhance India's credibility in HKC-aligned ship recycling.
Government Notifies Colliery Control (Amendment) Rules, 2025 To Fast-Track Coal Mine Openings - Ministry of Coal
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The Ministry of Coal has introduced the Colliery Control (Amendment) Rules, 2025, reforming the mine opening process. The key change is the removal of the requirement for prior approval from the Coal Controller's Organisation for opening new mines or sections. This authority is now delegated to the Board of the respective coal company, who can grant approval only after obtaining all necessary clearances. This reform aims to eliminate duplication, accelerate coal production by cutting operationalisation timelines, and improve regulatory efficiency, while maintaining accountability at the corporate level.
B. Announcements
Indian Railways Rationalises Passenger Fares With Minimal Impact On Commuters - Ministry of Railways
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The Indian Railways has announced a revision of passenger fares, effective December 26, 2025, to balance operational requirements and passenger welfare. The changes include no increase for suburban, season, and short-distance (up to 215 km) Second Class Ordinary tickets. There will be a 1 paise per kilometre increase for Sleeper and First Class Ordinary fares, and a 2 paise per kilometre increase for all Mail/Express fares (AC and Non-AC). The revision only applies to tickets booked on or after the effective date, with existing rules for reservation fees, superfast charges, GST, and fare-rounding remaining unchanged.
Draft Coastal Shipping Rules, 2026 Introduced To Mandate Digital Voyage Reporting And National Database – Ministry of Ports, Shipping and Waterways
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The Central Government has established a statutory framework for coastal shipping through the draft Coastal Shipping (Strategy and National Database) Rules, 2026, under the Coastal Shipping Act, 2025. This framework mandates the creation of a National Coastal and Inland Shipping Strategic Plan and the National Database of Coastal Shipping (NDCS) Portal. The rules require mandatory end-to-end digital voyage reporting for all coasting vessels via the NDCS portal, including 24-hour pre-departure and post-arrival filings and real-time deviation updates. Biennial strategic planning is institutionalized to address infrastructure, tonnage promotion, alternative fuels, and inter-agency coordination. The Directorate General of Shipping is the nodal authority for the NDCS portal.
Draft Coastal Shipping (Licensing of Foreign Vessels) Rules, 2026 To Regulate Foreign Participation In Coastal Trade – Ministry of Ports, Shipping and Waterways
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The Central Government has introduced the draft Coastal Shipping (Licensing of Foreign Vessels) Rules, 2026, under the Coastal Shipping Act, 2025, to establish a unified licensing framework for foreign-flagged vessels in India's coastal trade. Key features of this framework include mandatory licensing through the e-Samudra portal, standardized requirements, and a "Right of First Refusal" to prioritize domestic shipping. The rules also mandate Indian manning and P&I coverage to boost employment for Indian seafarers, and they set up an enforcement and official appeals mechanism. The goal is to balance access for foreign vessels with the protection of domestic interests and the promotion of Indian employment.
Indian Railways Plans To Double Train-Originating Capacity In 48 Major Cities By 2030 - Ministry of Railways
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The Indian Railways plans an extensive strategy to double its train-originating capacity in 48 major cities over the next five years to meet rising passenger demand. This strategy, part of the larger 2030 target, involves phased actions across immediate, short-term, and long-term timelines. Key initiatives include expanding and decongesting urban rail nodes, adding infrastructure like platforms and new terminals, improving maintenance complexes, and enhancing sectional capacity through multitracking and signaling upgrades.
III. Human Development And Welfare:
A. Policy Updates
Repealing and Amending Act, 2025 Receives President’s Assent – Ministry of Law and Justice
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The Repealing and Amending Act, 2025, supports the Government’s goal of legal simplification and reducing the compliance burden. The Act has repealed 71 obsolete laws (including the Indian Tramways Act, 1886) and amended four other Acts to correct drafting issues and update terminologies (e.g., General Clauses Act, 1897). A significant reform is the proposed removal of Section 213 of the Indian Succession Act, which will eliminate community-based disparities in probate requirements. Since May 2014, this legislation brings the total number of laws repealed to 1,577.
IV. National Security And Foreign Policy:
A. Announcements
Dedicated Bureau Of Port Security To Be Established For National Maritime Security - Ministry of Home Affairs
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The Central Government is establishing the Bureau of Port Security (BoPS), a new statutory body under the Merchant Shipping Act, 2025, operating under the Ministry of Ports, Shipping and Waterways. Modeled after BCAS, BoPS will focus on analyzing and exchanging security information, particularly the cyber security of port IT systems. The Central Industrial Security Force (CISF) has been named the Recognised Security Organisation, tasked with security assessments, creating port security plans, and developing the capacity of licensed private security agencies to create a unified, risk-based, and cyber-resilient security architecture across all ports.
V. Rural And Agricultural Transformation:
A. Policy Updates
Viksit Bharat-Guarantee For Rozgar And Ajeevika Mission (Gramin) (VB-G RAM G) Act, 2025 - Ministry of Agriculture and Farmers Welfare
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The new VB-G RAM G Act, 2025, replaces MGNREGA and introduces major reforms to the rural employment guarantee scheme. Key changes include increasing the guaranteed employment from 100 to 125 days and implementing a 60-day "no-work window" to protect labor during peak agricultural seasons. The act links wages to outcome-based infrastructure projects integrated with PM Gati Shakti, aiming for higher-quality rural assets. The funding model shifts to a centrally sponsored framework with a 60:40 Centre–State cost-sharing ratio (90:10 for North Eastern/Himalayan states). Administrative expenditure ceiling is raised from 6% to 9%. Accountability is strengthened through mandatory social audits, digital attendance, geo-tagged assets, and enforceable unemployment allowances. These reforms are expected to boost rural earnings and reduce labor conflicts.
VI. Miscellaneous Policy Updates:
A. Policy Updates
RBI Clarifies Responsibility Under Central KYC Framework - Reserve Bank of India
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The Reserve Bank of India (RBI) has amended its Know Your Customer (KYC) directions for All India Financial Institutions to clarify accountability. The new directions assign the responsibility for verifying a customer's identity and address to the regulated entity that uploads or updates the KYC records on the Central KYC Records Registry (CKYCR). This change means financial institutions downloading records from CKYCR are no longer required to re-verify the identity and address, provided the data is current and compliant with the Prevention of Money Laundering Act, 2002. This amendment aims to eliminate ambiguity, reduce duplication in onboarding, and enhance efficiency while maintaining anti-money laundering safeguards.
IFSCA Eases Fund Management Norms and Notifies New Global In-House Centres Rules for GIFT City - International Financial Services Centres Authority
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The International Financial Services Centres Authority (IFSCA) has introduced significant regulatory changes to enhance operations in GIFT City. Key adjustments include targeted relaxations for Fund Management Entities, such as eased eligibility for key personnel, a broader scope of recognized experience, greater flexibility for private placement memorandums, and a 24-month transition for custodians. Additionally, the new Global In-House Centres Regulations, 2025, have been notified, providing GICs with more flexible operating models, limited ability to service Indian group entities, and eased restrictions on employee transfers and co-delivery of services. These collective reforms are aimed at reducing compliance friction, improving fundraising, and solidifying GIFT City's position as a leading hub for global fund management and high-value financial and technology services.
B. Announcements
MOSPI To Release Revised GDP, CPI And IIP Series With Updated Base Years - Ministry of Statistics and Programme Implementation
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The Ministry of Statistics and Programme Implementation (MOSPI) is introducing a new macroeconomic data series with updated base years to improve the accuracy and contemporary relevance of India's official statistics. The scheduled release dates for the updated series are: New Consumer Price Index (CPI) Series (Base Year 2024) on 12th February 2026, National Accounts (Base Year 2022–23) on 27th February 2026, and Updated Index of Industrial Production (IIP) Series (Base Year 2022–23) on 28th May 2026.
Draft Rights Of Persons With Disabilities (Amendment) Rules, 2025 Notified To Introduce Non-Negotiable Accessibility Standards – Ministry of Social Justice and Empowerment
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The Central Government has introduced the draft Rights of Persons with Disabilities (Amendment) Rules, 2025, transforming accessibility from a recommendation into a binding regulatory requirement under the Rights of Persons with Disabilities Act, 2016. The draft rules mandate non-negotiable accessibility standards for the built environment. Key requirements include compulsory compliance for all public and publicly-used private buildings based on National Building Code and Indian Roads Congress codes, mandatory accessibility audits before approval and occupancy, and public disclosure of accessibility features. This amendment aims to significantly enhance the enforceability and accountability of universal access.
RBI Defers Phase II Of Faster Cheque Clearing Reforms - Reserve Bank of India
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The Reserve Bank of India (RBI) has deferred the start of Phase II of the expedited cheque clearance framework, initially set for 3rd January 2026. This delay allows banks more time to optimize their internal processes and achieve operational readiness. While Phase II is postponed, the continuous cheque clearing system under the Cheque Truncation System (CTS) will proceed with Phase I, albeit with adjusted timings. Cheques can now be presented between 9 am and 3 pm, with banks confirming or rejecting them from 9 am to 7 pm. This measured decision aims to roll out the faster clearing process effectively, mitigating potential operational or settlement risks.
The policy actions recorded in this period reflect a consistent emphasis on institutional consolidation and execution capacity. Legal simplification continued through the repeal of 1,577 laws since 2014, while regulatory reforms in insurance and securities sought to lower compliance frictions without weakening oversight. Trade agreements with Oman and New Zealand expanded market access while maintaining calibrated protection for sensitive sectors.
Infrastructure and energy reforms prioritised system efficiency and scale. Measures such as uniform gas transportation tariffs, rail capacity expansion across 48 major cities, and the statutory restructuring of nuclear governance by supporting a 100 GW capacity target by 2047, signals a preference for predictable, long-horizon planning. In rural policy, the expansion of guaranteed employment to 125 days and its linkage to asset creation marked a shift toward productivity-oriented public expenditure.
Taken together, these developments point to a governance approach anchored in durable frameworks, quantified objectives, and administrative accountability rather than episodic intervention.