Policy Newsletter | June 2026

India’s external outreach and internal reforms continue in tandem

Even as India continued economic diplomacy abroad, a series of targeted regulatory interventions were announced at home by the Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI), Directorate General of Foreign Trade (DGFT), Competition Commission of India (CCI) and Insolvency and Bankruptcy Board of India (IBBI). Each intended to improve market efficiency, reduce regulatory friction and deepen India's financial and commercial ecosystem.

Foreign Policy

Despite not being a member, India’s participation in the G7 continued with Prime Minister Modi attending the latest Summit in France. This reflects India’s growing significance in international economic governance and its role as a preferred partner for diversification of manufacturing and technology supply chains. Discussions centered on global economic resilience, trusted supply chains, artificial intelligence, critical minerals, clean energy and emerging technologies. The summit also reinforced India's strategy of maintaining close engagement with advanced economies while preserving strategic autonomy across competing geopolitical blocs. For businesses, these priorities closely align with India's domestic industrial strategy, particularly its ambition to become a trusted manufacturing and technology hub for global markets. Companies in electronics, semiconductors, renewable energy, pharmaceuticals and advanced manufacturing can expect greater opportunities arising from government-supported supply-chain diversification initiatives.

A meeting between Prime Minister Modi and Canadian Prime Minister Mark Carney on the sidelines of the G7 Summit also marked restoration of regular diplomatic engagement after a prolonged period of strained bilateral relations. Canadian institutional investors are among the largest long-term investors in Indian infrastructure, logistics, renewable energy and real estate sectors. Talks about a comprehensive India-Canada trade agreement might be in the offing.

Discussions on implementing the Free Trade Agreements with the UK and European Union also made progress. Unlike earlier trade agreements that focused primarily on tariff reductions, these negotiations increasingly address broader regulatory issues, including digital commerce, investment protection, conformity assessment, government procurement, sustainability obligations, intellectual property and regulatory cooperation.

Economic Policy

The Reserve Bank of India maintained the policy repo rate at 5.25% during its June Monetary Policy Committee meeting. This stance signifies confidence that India’s macroeconomic indicators such as inflation, banking sector stability and domestic consumption compare favorably with many major economies despite geopolitical tensions in West Asia, volatility in energy markets and uncertainty on global trade.

• Alongside the monetary policy announcement, the RBI unveiled several measures designed to strengthen India's external financial position which included:
• expanding investment opportunities for overseas investors in Indian financial markets;
• increasing investment limits under the Portfolio Investment Scheme for non-resident Indians and Overseas Citizens of India;
• widening foreign participation in specified government securities; and
• introducing measures intended to improve foreign exchange liquidity.

On the domestic front, the RBI also clarified rules for credit default swaps and total return swaps while expanding the range of participants permitted to use these instruments for risk management purposes. Another significant development during June was the RBI's revised Master Directions governing the Trade Receivables Discounting System (TReDS). The revised framework implements several announcements made in the Union Budget and seeks to improve access to institutional finance for micro, small and medium enterprises. Large corporates should review procurement practices involving MSME suppliers. Greater adoption of digital receivables financing is expected to improve liquidity throughout manufacturing supply chains while supporting compliance with payment obligations.

Capital Markets and Foreign Investment

The Securities and Exchange Board of India (SEBI) adopted one of its most significant packages of market reforms this year. At its Board meeting on 19 June 2026, SEBI approved a wide-ranging package of reforms affecting listed companies, investment funds, debt markets, municipal finance and market intermediaries to support foreign investor participation and growing demand for diversified financing mechanisms as India's infrastructure and manufacturing sectors expand.

Reintroduction of open-market buybacks from August 2026 with additional safeguards will equip listed companies with an important capital allocation tool at a time when many corporates are reporting strong cash positions. The GARUDA (Green Channel - AIF Rollout Upon Document Acknowledgement) framework will enable faster launches of alternative investment funds that play a key role in infrastructure financing, private equity, venture capital, real estate and private credit. SEBI also approved several amendments that simplify issuance and facilitate refinancing of municipal bonds to boost urban infrastructure. SEBI also approved amendments governing securitized debt instruments to facilitate broader participation by banks, non-bank financial companies and institutional investors. Lastly, SEBI launched an ease-of-doing-business initiative on June 22 when it announced a comprehensive review of its Master Circulars governing stock exchanges, clearing corporations and commodity derivatives. The aim is to consolidate and simplify compliance requirements without reducing investor protection.

The Government notified the Foreign Exchange Management (Non-Debt Instruments) (Third Amendment) Rules, 2026 to expand the class of overseas investors eligible to invest in listed Indian companies. These amendments complement the RBI's measures to widen participation by foreign portfolio investors and non-resident Indians in Indian capital markets.

Competition and Insolvency

One of the month's most significant legal developments was the Supreme Court's decision in the long-running Amazon-Future Coupons dispute. The Court set aside the Competition Commission of India's (CCI) order that had suspended its earlier approval of Amazon's investment in Future Coupons and imposed penalties relating to disclosures made during the merger review process. The judgment clarified important principles governing merger control, including the scope of the CCI's review powers and the application of statutory limitation periods under the Competition Act. The ruling provides welcome certainty for businesses undertaking complex acquisitions involving multiple transaction documents and layered investment structures. It also reinforces the importance of procedural fairness in merger review while recognising that commercial transactions frequently evolve after regulatory approval. This judgment is likely to become an important precedent for future cross-border mergers involving India.

The Insolvency and Bankruptcy Board of India (IBBI) issued a series of amendments including revisions to the:

• Liquidation Process Regulations;
• Corporate Insolvency Resolution Process Regulations;
• Information Utilities Regulations;
• Inspection and Investigation framework; and
• Grievance and Complaint Handling Procedures.

These amendments coincide with the tenth year of implementation of the Insolvency and Bankruptcy Code (IBC) and reflect the Government's continuing emphasis on improving operational efficiency rather than undertaking structural legislative reform. The IBC has fundamentally reshaped India's restructuring landscape over the past decade. As the regime matures, businesses should expect future reforms to focus on improving execution, creditor participation and value maximisation rather than introducing wholesale legislative change.

As the Indian Parliament prepares for its Monsoon Session, businesses should expect continued regulatory activity across financial markets, foreign investment, digital governance and commercial regulation.