India applies a residency requirement for the members of the board of directors. Art. 149.3 of the 2013 Companies Act requires every company to have at least one director who has stayed in India for a total period of not less than 182 days in the previous calendar year.

India does not mandate functional separation for operators with significant market power (SMP) in the telecom market. However, the Accounting Separation Regulation is applicable to all the service providers having aggregate turnover of not less than rupees one hundred crore (approx. 12,182,700 USD) during the accounting year for which report is required to be submitted from operations under the telecom license(s) issued to them under Chapter II of the Telecommunications Act, 2023. The telecom service providers are required to submit their audited accounting separation reports based on a historical cost basis every year and on a replacement cost basis every second year within seven months of the end of the accounting year.

According to the Consolidated Foreign Direct Investment (FDI) Policy Circular 2020, broadcasting services require that a majority of the company’s directors are Indian citizens. Additionally, the CEO, the chief officer responsible for technical network operations, and the chief security officer must all be resident Indian citizens. Furthermore, officers or officials of the licensee companies involved in the interception of services must also be Indian citizens. This requirement has been in effect since the implementation of the Consolidated Foreign Direct Investment (FDI) Policy Circular 2013 (Section 6.2.7.6)

According to the Consolidated Foreign Direct Investment (FDI) Policy Circular 2020, foreign direct investment in telecom services (including fixed, mobile, and internet) is subject to compliance with both licensing and security conditions by the licensees and investors. These regulatory requirements have been in place since the implementation of the Consolidated FDI Policy Circular 2013 (Section 6.2.15). The conditions are outlined in the License Agreement for Unified License, which applies to all telecom services across the country.
Internet Service Providers (ISPs) and Telecom Service Providers (TSPs) in India must comply with the License Agreement for the Provision of Internet Services. Additionally, TSPs are required to adhere to two separate license agreements: the Cellular Mobile Telephone Service (CMTS) License Agreement, which governs cellular mobile communications, and the License Agreement for the Provision of Basic Telephone Services (BTS), which covers landlines. Reports suggest that these licenses provide the government with significant access to communication data held and processed by service providers.
It is also noted that India’s one-time licensing fees—approximately USD 500,000 for a service-specific license or USD 2.7 million for an all-India Universal License—act as a barrier to market entry for small and medium-sized enterprises.

India has traditionally implemented FDI screening for investors from Bangladesh and Pakistan. According to Section 3.1.1 of the Consolidated FDI Policy 2020, non-resident entities may invest in India, subject to the conditions specified in the policy, except in prohibited sectors or activities. However, investment by citizens of Bangladesh or Pakistan is permitted solely through government approval. This regulatory requirement has been in effect since the enactment of the Consolidated FDI Policy Circular 2013 (Section 3.1.1).
Notwithstanding this framework, in April 2020, the Ministry of Commerce and Industry introduced the Review of Foreign Direct Investment (FDI) Policy for Curbing Opportunistic Acquisitions of Indian Companies (Press Note 3). Under this policy revision, the FDI regime was expanded to mandate government approval for investments from any entity based in a country that shares a land border with India. Furthermore, the policy stipulates that any direct or indirect transfer of ownership of existing or future FDI in India, which results in a change in beneficial ownership falling within the scope of the conditions set forth in the Press Note, will similarly require government approval.
This legislative adjustment primarily targeted China in response to escalating border tensions between the two nations. Since the introduction of Press Note No. 3, an estimated 150 private equity and venture capital investment applications from China and Hong Kong have remained pending government clearance.

According to Section. 6.2.14 of the 2020 Consolidated Foreign Direct Investment (FDI) Policy Circular, full foreign direct ownership is permitted in the telecommunications sector (including Category-I Telecommunications Infrastructure Providers). However, government approval is required for FDI above 49%. This regulatory requirement has been in effect since the enactment of the Consolidated FDI Policy Circular 2013 (Section 6.2.15).

Pursuant to Art. 13A of the Internal Trade (DPIIT) Order No. P-45021/2/2017-B.E, for goods, services, or works subject to substantial public procurement, where the Nodal Ministry has not determined the existence of sufficient local capacity and competition, the Ministry must establish an upper threshold value beyond which foreign companies are required to form joint ventures with Indian companies to participate in tenders. Procuring entities must incorporate this requirement into their tenders and include provisions exempting such joint ventures from the stipulated minimum local content requirements, with a framework for the gradual increase of these requirements over time.

Under Rule 151 of the General Financial Rules, the Central Government may, through notification, mandate the procurement of specific goods or services from certain categories of bidders or grant preferential treatment to bidders to promote locally manufactured goods or locally provided services.

Under India’s Public Procurement Policy for Micro and Small Enterprises (MSEs) Order, Central Government Ministries, Departments, and Public Sector Undertakings are required to procure a minimum of 25% of their annual value of goods or services from Indian micro and small enterprises. Within this 25% allocation, 3% is reserved specifically for women-owned SMEs.

In 2015, India’s Ministry of Electronics and Information Technology (MeitY) issued the Request for Proposal for Provisional Empanelment of Cloud Service Offerings of Cloud Service Providers, establishing a framework under which cloud computing service providers may obtain provisional accreditation for government procurement of cloud services. A key requirement for accreditation is the mandatory storage of all data within India.
Additionally, Section 2.1.d of the Guidelines for Government Departments on Contractual Terms Related to Cloud Services stipulates that all government contracts must include a localisation clause mandating that government data stored in cloud networks remain on servers located in India.
Further reinforcing this requirement, Section 1.17.4 of the Master Service Agreement: Procurement of Cloud Services specifies that cloud service providers must deliver services from a MeitY-registered data centre located within India, ensure that all data remains stored domestically, and prohibit its transfer outside India without explicit approval from the purchaser.

The Public Procurement (Preference to Make in India) Order 2017 - Notification of Telecom Products, Services, and Works establishes a list of telecom products, services, and works for which procurement preference is granted to domestic manufacturers. The telecom products and services covered under this Order include encryption systems, ethernet switches, IP-based soft switches, set-top boxes, and Wi-Fi-based broadband wireless access systems, among others. The local content requirements range between 30% and 70%. Annexure B of the Order outlines the conditions for inputs to qualify as local content, which include components such as integrated chips, active components, and cables, among others, that must be manufactured in India. The Order also stipulates that local suppliers must manufacture equipment from the component level in India and develop local vendors for procuring raw materials, components, and parts to enhance local content.

With the enactment of the Public Procurement (Make in India) Order 2018 for Cyber Security Products, the Ministry of Electronics and Information Technology underscored the strategic importance of cybersecurity. As a result, governmental entities are directed to prioritise the procurement of domestically manufactured cybersecurity products when tendering processes. A domestically manufactured cybersecurity product is defined as one where an Indian company owns the intellectual property (IP), and the company has the autonomy to distribute, modify, or commercialise the product without third-party consent. Additionally, products composed of multiple sub-components may also qualify as domestically manufactured cybersecurity products if at least 60% of the total product cost is attributed to local content and third-party licensing fees do not exceed 20% of the total product cost.
Additionally, the Public Procurement (Make in India) Order 2019 for Cyber Security Products granted preferential treatment to companies incorporated and registered in India or to startup firms meeting the criteria set by the Department for Promotion of Industry and Internal Trade (DPIIT), provided that revenue from the product and IP licensing is accrued within India. The scope of cybersecurity products covered by these notifications includes anti-virus software, cloud security solutions, mobile security applications, firewalls, OTP gateways, encryption services, and others. A comprehensive list of products can be found in the Public Procurement (Make in India) Order 2019 for Cyber Security Products.

The Policy for Providing Preference to Domestically Manufactured Electronic Products in Government Procurement (PMA) mandates that domestically manufactured equipment be prioritised in both government procurement and select private sector procurement activities. The policy stipulates that each ministry or department must meet a minimum percentage of their demand for electronic products with locally manufactured goods that comply with the prescribed minimum value addition requirements for each item. This policy aligns with India’s broader objectives to enhance domestic manufacturing capacity and safeguard the security of its telecommunications infrastructure.
According to the 2015 Guidelines on the implementation of this policy, the minimum threshold for domestic procurement of any electronic product is set at 30%. Additionally, the rate of total procurement value accorded preference for domestically manufactured electronic products should be determined in a manner that encourages domestic manufacturing while maximising competition.
In addition, the Guidelines list the electronic products subject to this policy, including but not limited to notebooks, tablets, desktop PCs, servers, printers, keyboards, monitors, USB devices, ATMs, photocopiers, scanners, faxes, smartcards, mobile handsets, handheld terminals, PC projectors, and POS-based services. Telecom products under the Guidelines include SIM cards, encryption platforms, leased line network equipment, WiFi access systems, among others.

India is a signatory of the World Trade Organization (WTO) Information Technology Agreement (ITA) of 1996, but it is not a signatory of its 2015 expansion (ITA II).