Sectoral / Business Law

  • SEZ
  • Telecomm
  • Software Technology Parks
  • Civil Aviation
  • Insurance
  • Venture Capital and Private equity
  • Non-Banking Financial companies
  • Banking


With a view to overcome the shortcomings experienced on account of the multiplicity of controls and clearances; absence of world-class infrastructure, and an unstable fiscal regime and with a view to attract larger foreign investments in India, the Special Economic Zones (SEZs) Policy was announced in April 2000. The Special Economic Zones Act, 2005, was passed by Parliament in May, 2005 which received Presidential assent on the 23rd of June, 2005.
After extensive consultations, the SEZ Act, 2005, supported by SEZ Rules, came into effect on 10th February, 2006, providing for drastic simplification of procedures and for single window clearance on matters relating to central as well as state governments. The main objectives of the SEZ Act are:

  • generation of additional economic activity
  • promotion of exports of goods and services;
  • promotion of investment from domestic and foreign sources;
  • creation of employment opportunities;
  • development of infrastructure facilities;

It is expected that this will trigger a large flow of foreign and domestic investment in SEZs, in infrastructure and productive capacity, leading to generation of additional economic activity and creation of employment opportunities.


The Telecom Regulatory Authority of India (TRAI) was, thus, established with effect from 20th February 1997 by an Act of Parliament, called the Telecom Regulatory Authority of India Act, 1997, to regulate telecom services, including fixation/revision of tariffs for telecom services which were earlier vested in the Central Government. The TRAI Act was amended by an ordinance, effective from 24 January 2000, establishing a Telecommunications Dispute Settlement and Appellate Tribunal (TDSAT) to take over the adjudicatory and disputes functions from TRAI.

TRAI's mission is to create and nurture conditions for growth of telecommunications in the country in a manner and at a pace which will enable India to play a leading role in emerging global information society. One of the main objectives of TRAI is to provide a fair and transparent policy environment which promotes a level playing field and facilitates fair competition.


Software Technology Parks of India' (STPI) is a government agency in India, established in 1991 under the Ministry of Communications and Information Technology, that manages the Software Technology Park scheme. It is an export oriented scheme for the development and export of computer software, including export of professional services. The STP Scheme provides various benefits to the registered units, which include 100% foreign equity, tax incentives, duty free import, duty free indigenous procurement, CST reimbursement, DTA entitlement, deemed export etc.

Besides regulating the STP scheme, STPI centers also provide variety of services, which includes High Speed Data Communication, Incubation facility, Consultancy, Network Monitoring, Data Center, Data Hosting etc. It will help dispersal of IT industry in smaller cities and also support STPI-registered units which have not come under SEZs as well as other units which are not covered under any incentive scheme. This incentive scheme is seen as an alternate scheme to compensate the STPI units it will help dispersal of IT industry in smaller cities and also support STPI-registered units which have not come under SEZs as well as other units which are not covered under any incentive scheme.
Aircraft Act, 1934 and the Aircraft Rules, 1937 was framed under the Act to bring efficiencies in economic and operational aspects of the civil aviation industry. Now, the Ministry of Civil Aviation is in the process of formulating a Civil Aviation Policy and examining the proposal of having a new Civil Aviation Act and Civil Aviation Rules to replace the present Act.

A well-developed and evolved insurance sector is critical for economic development as it provides long term funds for infrastructure development and strengthens risk taking abilities. Insurance is a federal subject in India. There are two legislations that govern this sector:

  • The Insurance Act, 1938 (“Insurance Act”) and
  • The Insurance Regulatory and Development Authority Act, 1999 (“IRDA”)

The IRDA provides for the protection of the interests of holders of insurance policies and regulates, promotes and ensures orderly growth of the insurance sector.

With the opening of the Indian market, foreign and private Indian players are keen to convert untapped market potential into opportunities by providing tailor-made products. The presence of a host of new players in the sector has resulted in a shift in approach and the launch of innovative products, services and value-added benefits.


The SEBI regulates private pools of capital in India under the Securities and Exchange Board of India (Alternative Investment Funds) Regulations 2012 (“AIF Regulations”). In May 2012, the AIF Regulations replaced an earlier set of regulations called the Securities and Exchange Board of India (Venture Capital Funds) Regulations, 1996 as the latter was outdated in light of the developments in the Indian market since 1996. As a result, all privately pooled investment vehicles established in India in any form are required to register with the SEBI and comply with the AIF Regulations. Certain funds and pools of capital like Family trusts, ESOP trusts, employee welfare trusts, funds managed by securitization, etc. are excluded from the scope of the AIF Regulations. The AIF Regulations permit all funds registered under the repealed regulations and existing as of the date of issue of the AIF Regulations to continue to be governed by the repealed regulations until the relevant fund life is completed and subject to certain restrictions.


The Reserve Bank of India has issued detailed directions on prudential norms, vide Non-Banking Financial Companies Prudential Norms (Reserve Bank) Directions, 1998. The directions interalia, prescribe guidelines on income recognition, asset classification and provisioning requirements applicable to NBFCs, exposure norms, constitution of audit committee, disclosures in the balance sheet, requirement of capital adequacy, restrictions on investments in land and building and unquoted shares, loan to value (LTV) ratio for NBFCs predominantly engaged in business of lending against gold jewellery, besides others. Deposit accepting NBFCs have also to comply with the statutory liquidity requirements. Details of the prudential regulations applicable to NBFC holding deposits and those not holding deposits is available in the DNBS section of master Circulars in the RBI website → sitemap → Master Circulars.

NBFCs are categorized a) in terms of the type of liabilities into Deposit and Non-Deposit accepting NBFCs, b) non deposit taking NBFCs by their size into systemically important and other non-deposit holding companies (NBFC-NDSI and NBFC-ND) and c) by the kind of activity they conduct. Within this broad categorization the different types of NBFCs are as follows:

  • Asset Finance Company (AFC)
  • Investment Company (IC)
  • Loan Company (LC)
  • Infrastructure Finance Company (IFC)
  • Systemically Important Core Investment Company (CIC-ND-SI)
  • Infrastructure Debt Fund: Non- Banking Financial Company (IDF-NBFC)
  • Non-Banking Financial Company - Micro Finance Institution (NBFC-MFI)
  • Non-Banking Financial Company – Factors (NBFC-Factors)



Banking companies in India are regulated under the Banking Regulation Act, 1949 (“BR Act”). The BR Act regulates the business of banking companies, prohibitions on trading, disposal of non-banking assets, rules pertaining to Boards of Directors, management; powers of the RBI, minimum paid-up capital and reserves requirements, reserve fund, cash reserves and restrictions on loans and advances, among others. RBI formulates the banking policy in India from time to time in the interest of the banking system, monetary stability and sound economic growth. Such policy is formulated with due regard to inter alia, the interests of the depositors, the volume of deposits and other resources of the banks and the need for equitable allocation and efficient use of these deposits and resources.