Newsletter October 2026

Dear Friends,

Greetings from the Centre for Regulatory Governance.

At the Kautilya Economic Conclave last weekend, Mr Rajiv Gauba, former cabinet secretary to the Government of India, made a very pertinent remark on how regulators should operate. He said the goal should be a State that is "firm where risks are high, and light-touch where risks are low," but predictable in both cases.  

Mr Gauba’s comments were in the context of rapidly changing contours of enterprises where, as he said, the traditional boundaries between industries were becoming less relevant. If regulatory frameworks have to address those new interconnected risks without creating fragmented or conflicting obligations, then they must evaluate what prevails without bringing in new demands or regulations on the companies that populate the sector. More than three decades after liberalisation in India, if a top government functionary has to fulminate against what is essentially another name for license-control-raj then it is a matter of deep concern. 

The reasons why in India the state has often rushed to prohibit new activities before giving those a go-ahead is varied but almost always got created by the desire to play a pater familias role for the citizens. It is also true that often these prohibitions have emanated from the political demands on the state instead from the considered opinion of the regulators themselves. The proclivity to restrict has particularly hurt innovations and competition in many sectors in India.

In recent years, the series of restrictions on e-commerce companies were a good example of this proclivity to prohibit instead of recognising a light-touch regulatory spirit. Companies in this space have long wrestled with models like marketplace and inventory models. The reasons were various, but the costs got imposed on the buyers from the platforms. It was difficult to distinguish for whom the risks were high and why therefore the restrictions were brought in.

Wisely so far, the government agencies have refrained from putting in place restrictions on segments of the social media for those below a certain age. As the examples from Australia and other places where these bans were rung in, show, they do little to stem the curiosity of those whom it is supposed to apply, instead adding to the load of policing by the state. A clear example of non-light touch approach. 

So as technology rapidly dissolves the differences among markets, Mr Gauba’s concerns seem most valid. In the maelstrom of inventions, it is inevitable that established models of doing business will collapse in favour of new ones. Regulators therefore need to often tell the word forbearance to themselves. Let the markets decide through pricing which models seem best for the citizens. This is a difficult call that regulators need to heed. In the financial sector, for instance, the business models of plain-vanilla underwriting companies in the insurance sector have come under threat from the online distribution companies. The recent draft paper by the regulator to rein in the commissions could actually hurt the small distributors while offering benefits to the large aggregators. 

Often the regulators to get over this challenge appeal to the supposed interest of the citizens as the insurance regulator has done. This is not helpful. Instead, the wise retreat by the capital market regulator on Closing Auction System to calculate derivatives settlement prices in response to public sentiment is a laudatory move. Many other regulators need to follow this spirit of light touch regulation. 

With Regards

Subhomoy Bhattacharjee

September, 2026 witnessed further unified policy push towards modernization, capacity expansion, and trust-based governance across India's maritime, healthcare, fintech, energy, and insurance sectors. The focus is rapidly evolving towards driving global competitiveness while balancing safety and sustainability.

MARITIME: The Maritime sector remained firmly in focus in September as it got further boost in investments. As the Indian Government remained focussed strongly in this industry, CRG discussed the growth potential and domestic challenges, the impact of Government policies on revitalizing India’s shipbuilding and maritime ecosystem, the environmental issues faced by the sector and even the Regulatory conflicts. The focus of CRG remains strongly in this sector as its potential for growth remains high – necessitating major Regulatory changes in coming months.

CDSCO: As the regulator pushes for major Regulatory initiatives, the CRG team examines key challenges and regulatory issues faced by the Indian MedTech and Healthcare Industry. We also discuss how CDSCO is taking these challenges head-on to ensure not just higher growth for the sectors, but also adapting to the international standards to ensure higher exports and make India a global superpower. 

FINTECHS: With stricter regulations getting enforced along all sectors - the purpose being not just aligning with international standards and ensure higher growth and credibility, but also customer protection, RBI issued directives to Fintechs. It laid stress on treating customer data as a fiduciary responsibility rather than a commercial asset. The discussions by CRG panellists harped on key implications – focussing on factors like data privacy challenges, the role of self-regulatory organizations (SROs), the operational status of the Payment Regulatory Board (PRB), and alignment with the DPDP Act and GDPR compliance.

CERC: The CERC Draft Regulations 2026 propose crucial amendments to the Indian Electricity Grid Code - aiming to streamline grid operations as India faces growing demand for 24/7 firm renewable power, driven by hyperscale data centers that present significant grid stability challenges. The CRG team discusses the challenges faced by the sector and how CERC is negotiating through these.

IRDAI: The Insurance regulator had been very active for quite some time – highlighting not just the issues it faced, but issuing directions and bringing in regulatory reforms in the sector. The objective had been to improve efficiency, gain customer confidence and increase its reach, while initiating reforms to cater to needs of international markets as the sector opens up. The CRG members discuss in details about all the issues faced by the sector and the implications of the reforms being set forth through the new Draft Rules announced recently. 

Among other major headlines, CRG also focussed on Delhi’s Infra Governance problems, Supreme Court striking down Maharashtra’s Ethanol rules, IBBI cancelling registrations of Insolvency professionals, and issues related to TRAI and FSSAI. These are covered in our “Latest News” section. 

The detailed reports and discussions by our CRG panellists analyzing the reports are captured in our website: https://crg.jgu.edu.in/.