 "Year in review: 5 important regulatory changes by Indian govt in 2024")
The year 2024 marked significant strides in regulatory reforms across various sectors in India, reflecting the government's commitment to fostering innovation, sustainability, and a fair business environment.
From streamlining patent procedures to addressing AI governance, liberalising foreign investments, tackling digital monopolies, and introducing green steel standards, these landmark changes aim to position India as a global leader in economic and technological progress. Here’s a closer look at five key regulatory changes that shaped the year.
1. Patents (Amendment) Rules, 2024: The Ministry of Commerce and Industry (DPIIT) on March 15, 2024, introduced the Patents (Amendment) Rules, 2024, in the Official Gazette of India. These rules aim to address critical challenges in Indian patent practices and align them with international standards, particularly those in the US and Europe. The amendments focus on streamlining application processes, enhancing flexibility, and curbing frivolous pre-grant oppositions. Here are the key amendments:-
Key changes include a reduced Reduced request for examination (RFE) filing timeline (48 to 31 months) for faster patent grants, simplified Section 8 compliance with a single Form 3, and recognition of individual inventors on certificates. Working statement filings now occur every three financial years instead of annually, while opposition procedures see improved timelines. Controllers gain discretionary powers to condone six-month delays, and a 10 per cent renewal fee discount is offered for advance electronic payments. These reforms boost efficiency, ease compliance, and enhance global collaboration in patent administration.
2. AI Regulation framework: With artificial intelligence (AI) increasingly influencing every industry, governments worldwide are grappling with issues such as biased data, misinformation, copyright infringement, and, crucially, the effects on labour markets. Since 2022, the Indian government has alternated between a non-interventionist stance on AI regulation and a more hands-on approach, causing some uncertainty.
Around the same time, the Ministry of Electronics and Information Technology (MeitY) unveiled plans for a new Digital India Act, which specifically mentioned the regulation of “high-risk AI systems”. Following a period of inaction, the government issued a directive in March 2024 that sent ripples through the industry. This directive required companies to secure government approval before deploying certain AI models in India and to implement measures against algorithmic discrimination and the spread of deepfakes.
Also Read
Although this directive aimed to address pressing concerns, it faced significant pushback, leading to revisions. At present, the government appears to be taking a measured approach, seeking to build consensus. The Office of the Principal Scientific Advisor (PSA), which advises the Prime Minister and cabinet on science and technology, has been tasked with offering strategic guidance on AI regulation. A sub-committee led by MeitY and reporting to the PSA has prepared a draft report on AI regulation, though it remains unpublished.
MeitY is also exploring regulatory frameworks, including potential amendments to the Information Technology Act, 2000, which would be quicker than enacting new legislation such as the proposed Digital India Act. During a recent Question Hour in the Lok Sabha, MeitY indicated its openness to introducing specific legislation for AI governance.
3. Foreign Direct Investment (FDI) policy relaxation: In 2024, India continued its efforts to liberalise Foreign Direct Investment (FDI) policies, aiming to attract global investors and foster a more business-friendly environment. These reforms reflect the government's commitment to easing market entry and enhancing investment opportunities across various sectors. Key updates to the FDI framework include:
a) Expansion of the automatic route: Nearly 90 per cent of FDI inflows now occur through the automatic route, allowing foreign investors to invest in most sectors without prior government approval. Strategic sectors remain exceptions to this provision. This streamlined approach has simplified entry into the Indian market for global investors.
b) Sector-specific reforms: The government has increased FDI limits in key areas such as banking, insurance, and defence. Notably, the space sector has undergone transformative changes, with up to 100 per cent FDI now permitted under relaxed conditions for satellite manufacturing and operations.
c) Regulatory simplification: Through initiatives like the Jan Vishwas Act, the government has reduced over 40,000 compliance requirements, aligning regulations with global standards and improving the ease of doing business in India.
India’s cumulative FDI inflow since April 2000 has surpassed the $1 trillion mark, bolstered by innovation, an improved business environment, and forward-thinking policy reforms, according to recent data from the Ministry of Commerce and Industry.
4. Digital Competition Bill: The Ministry of Corporate Affairs (MCA), in March 2024, introduced a draft Digital Competition Bill to regulate anti-competitive practices by tech giants. The legislation targets ‘Core Digital Services,’ which include online search engines, social media platforms, video-sharing sites, communication services, operating systems, web browsers, cloud services, advertising platforms, and online intermediation services. The government will periodically update this list.
A report from the Committee on Digital Competition Law, presented in Parliament in March, recommended enacting a Digital Competition Act to balance legal certainty and adaptability. It identified 10 harmful practices in the digital sector, including anti-steering, self-preferencing, bundling, misuse of non-public data, deep discounting, exclusive tie-ups, biased search rankings, restrictions on third-party apps, and unfair advertising policies.
The Digital Competition Bill defines Systemically Significant Digital Enterprises (SSDEs) as entities with annual Indian turnover above Rs 10,000 crore, global turnover over Rs 25,000 crore, or significant user bases (10 million Indian users or 10,000 business users). SSDEs must ensure fair competition, avoiding practices like self-preferencing or disadvantaging third-party businesses. Non-compliance can incur penalties of up to Rs 10 crore daily or ?25 crore cumulatively.
The Competition Commission of India (CCI), empowered as a civil court, can enforce these rules and impose fines up to 1% of global turnover for false information, ensuring accountability in the digital economy.
This Bill aims to ensure fair competition in India’s digital economy by holding major tech firms accountable.
5. Green Steel classification: The Union Ministry of Steel, on December 12, introduced a framework for categorising 'green steel' based on carbon emissions per metric tonne of steel produced. The classification is divided into three tiers.
Steel with carbon emissions below 2.2 tonnes per tonne of finished steel qualifies as "green steel." Further, steel with emissions under 1.6 tonnes per tonne is deemed "five-star green-rated steel," the most environmentally friendly category. On the other hand, steel with emissions ranging from 2 to 2.2 tonnes per tonne falls under the "three-star green-rated steel" category, the least eco-friendly of the three.
The thresholds for these categories will be reassessed every three years, according to a government release. Additionally, the government is considering making green steel mandatory for public sector projects.
This initiative aligns with Prime Minister Narendra Modi's goal of achieving net zero emissions by 2070.