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Government Policy and Engagement Monthly Mailer

May 2026 Volume 8, Issue 5

Nasscom | Data Centre SIG

On April 17, 2026, Nasscom's meeting of its SIG on Data Centres in New Delhi was attended by members of the Data Centre Industry and Government officials from MeitY, CEA, MoF and BIS. The meeting highlighted the need for deeper state-level engagement to ease friction between policies and their implementation as well as continued advocacy with MoF and MeitY.

Key Points: Direct Taxation: Discussion on the Data Centre notification scheme under the Finance Act, 2026, including eligibility design, and conditions under the Finance Act, 2026. GST Input Tax Credit: Treatment of Data Centres as buildings rather than plant and machinery continues to block ITC claims. Connectivity: Ground-level implementation of the Telecommunications (Right of Way) Rules 2024 remains weak at the level of municipal corporations/ local bodies. State-owned OPGW fibre, which offers direct, low latency backhaul routes, remains an underutilised connectivity option for data centres. Power: Fiscal benefits notified under state data centre policies often remain unoperationalised for want of requisite government orders and notifications from relevant departments. CEA outlined its plan to convene a multi-state coordination meeting in May on the GRID India load pattern study. Building Norms: BIS is finalising NBC 2.0 with a dedicated chapter for Data Centres. Once finalised, adoption of the code will require sustained state-level advocacy as building regulations are administered at the state and local body level. For more information, please write to Sudipto Banerjee at Sudipto@nasscom.in and Ayush Raj at Ayush@nasscom.in.

MEITY | Representation to consider calibrated implementation timelines under DPDPA, 2023

On April 24, 2026, Nasscom highlighted the need for appropriate time frame for operationalisation of DPDPA obligations through internal governance, contractual updates, technical controls, audit readiness, and user-facing processes. The representation explained the likely risks from accelerated implementation as well as dependencies for certain aspects of implementation on actions to be taken by the Government. The representation focused on use cases like SDF designation, government information requests, data retention obligations, and cross-border data transfers. For more information, please write to Ayush Raj at Ayush@nasscom.in.

MEITY | Submission on proposed scheme for specified Data Centres for tax exemption

On April 22, 2026, Nasscom through its submission urged that the scheme should be closely aligned to its core purpose of providing tax certainty to foreign CSPs using Indian infrastructure for their foreign sales and cautioned that eligibility conditions like capacity commitments, employment thresholds, and domestic sourcing conditions could deter investment. For more information, please write to Sudipto Banerjee at Sudipto@nasscom.in.

CBDT | Data Centre Tax Exemption Framework

On April 27, 2026, Nasscom submitted its representation requesting administrative guidance regarding Data Centre tax exemption framework under the Finance Act, on treatment of standard group operating models, scope of reseller routing condition, meaning of "users located in India" and other crucial aspects. (Read more)

NITI AAYOG | Strengthening India's Social Security Framework on EPFO & ESIC Reform

On April 24, 2026, Nasscom outlined key EPFO and ESIC implementation challenges including PF transfers from exempted establishments, ECR system constraints, UAN activation for globally mobile employees, deferred pension cases, data synchronisation gaps, operationalisation of the Vishwas app, mobility between EPFO and NPS, ESIC exemption rationalisation, and social security coverage for gig workers. (Read more)

MEITY | Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Second Amendment Rules, 2026

On April 21, 2026, MeitY released an updated version of the draft Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Second Amendment Rules, 2026. The revised draft largely retains the provisions introduced earlier while introducing an additional requirement mandating continuous and clearly visible labelling throughout the duration of synthetically generated content. Nasscom will be making an industry submission to help improve the proposed revisions.

State Government

Uttar Pradesh | Nasscom's feedback on Draft Uttar Pradesh Rules for labour codes

On April 24, 2026, Nasscom submitted its feedback to the Department of Labour, Government of Uttar Pradesh, on draft Uttar Pradesh rules under four labour codes including Code on Wages, Code on Social Security, Code on Industrial Relations and Code on Occupational Safety and Health. The submission focused on operational clarity, reducing compliance ambiguity, and ensuring that rules are aligned with contemporary industry realities. Nasscom has recommended revision or deletion of select provisions, while reaffirming industry's commitment to constructive and effective implementation of the reforms. (Read More)

Uttar Pradesh | Feedback on Draft UP Motor Vehicle and Delivery Service Provider Rules, 2026

On April 12, 2026, Nasscom proposed a balanced regulation approach taking into account the operational requirements of the platforms. The recommendations included aligning the aggregator definitions in the draft Rules with MV Act, 1988, and enabling non-transport motorcycles (with white number plates) for last-mile connectivity. It also called for a phased EV transition and harmonisation of social security provisions with COSS 2020. Read More

Telangana | Representation on GHMC notices to IT/ITeS establishments on Trade Licenses

On April 21, 2026, Nasscom sought a review of trade license notices issued to IT/ITeS establishments. The representation highlighted that, under the GHMC Act, 1955, licensing requirements apply only to specified trades and articles and does not appear to cover software or IT/ITeS services. Read More

Haryana | Government revises Minimum Wages with effect from April 1, 2026

On April 9, 2026, Labour Department's notification set new baseline wages applicable to all establishments under the Code on Wages, 2019, while clarifying that basic wages cannot be split into allowances. It also reinforces employer responsibility for wage compliance, including for contract labour and prescribes conditions for trainee wages. Read More

Delhi | Amendments to Delhi's Shops and Establishment Act, key changes to working hours, and women night shift

On March 11, 2026, the Government of NCT of Delhi notified the Delhi Shops and Establishments (Amendment) Act, 2026. The amendment raises employee threshold for applicability and revises working hour limits, including higher daily and weekly caps, with updated spread-over provisions. It also enables women to work night shifts across establishments with consent and mandated safeguards, aligned with requirements under the POSH Act, 2013. Read More

Nasscom | Knowledge exchange sessions on the implementation of Labour Codes with members

On April 13 & 29, 2026, Nasscom organised two knowledge sessions on the implementation of labour codes with its members. These sessions were led by Ashish Aggarwal with the objective of providing Nasscom members a platform for exchange of industry practices and alignment on various perspectives regarding implementation of labour codes including Code on Wages, Code on Social Security, Code on Industrial Relations and Code on Occupational Safety and Health.

Nasscom | Safer Workplaces, Stronger Partnerships: An Industry-Law Enforcement Dialogue

On April 29, 2026, Nasscom conducted a webinar on making workplaces safer for women workers in the IT/ITeS sector. Nasscom members from Maharashtra along with representatives from Police Department and Government of Maharashtra participated. The discussion, moderated by Ashish Aggarwal, with support from Leenika Khattar, Director of Diversity, Inclusion, and Belonging, Dr. Chetan Samant, Head of SME Council, and the Regional Team, focused on strengthening internal committees, interface with law enforcement, and workplace safety Infrastructure as well as culture and deterrence.

Nasscom | RBB Economics: From Framework to Action: Implementation of the AI Chakras

On April 15, 2026, Nasscom, in collaboration with RBB Economics, convened a discussion titled "From Framework to Action: Implementation of the AI Chakras" in New Delhi. The event featured presentations by Nasscom and RBB Economics, followed by two panel discussions on enabling competitive markets for democratising AI resources and enabling resilient and efficient AI infrastructure at scale. (Read more)

Haryana Govt | Dialogue on Strengthening Haryana's Digital Economy

On April 23, 2026, the policy and membership teams from Nasscom engaged in a constructive and forward-looking dialogue with the Hon'ble CM of Haryana, Shri Nayab Singh Saini. The discussion centred on strengthening the IT/ITeS ecosystem in the state and advancing the EoDB agenda, an increasingly critical factor in attracting long-term digital investments. (Read more)

Nasscom | Evolving policy and regulatory landscape, Coimbatore & Chennai

In April 2026, Nasscom hosted two interactions with Ashish Aggarwal, and founders of SMEs, CFOs from leading enterprises, GCCs, and MNCs for a focused discussion on the evolving regulatory, economic, and policy landscape.

Key Topics: Impact of geopolitical volatility on financial strategy and global operations Practical challenges in implementing Labour Codes across organisations Readiness for DPDPA 2026 and its implications for data governance and compliance Policy direction around DeepTech and its relevance for enterprise growth Updates in transfer pricing, Safe Harbour, and APA frameworks Evolving outlook on SEZ 2.0 and its potential impact on business operations Addressing operational inefficiencies within GST frameworks Increasing importance of tech sovereignty in financial and strategic planning

Nasscom | Engineering R&D CEO Forum

On April 8, 2026, Nasscom organised the ER&D CEO forum which brought together industry leaders driving ER&D for global enterprises. Discussions were held across industry priorities, policy signals, technology outlook, peer experiences, frontier technologies (AI, Quantum Security, 5G) and startup-enterprise collaborations. Ashish Aggarwal presented details on the latest developments pertaining to the India AI Mission, ANRF, and the recognition framework for deeptech startups, along with an overview of the avenues available for industry engagement across each of these initiatives.

CBIC | Discussion on Indirect Tax and GST Issues

On April 27, 2026, Nasscom led a delegation of IT/ITeS industry representatives, including e-commerce companies, to discuss a broad range of indirect tax issues, including GST implementation challenges, streamlining of audit processes, enabling paperless movement of goods, working capital optimisation concerns, and practical issues relating to IMS. For feedback, please write to swapnil@nasscom.in or ayush@nasscom.in.

DoR | Strategic Engagement on GST Issues

On April 27, 2026, Nasscom led delegation in a meeting with Joint Secretary, TPRU, discussed GST related issues impacting the sector, including refund bottlenecks, implementation of circulars, audit processes, and concerns affecting SEZ units. For feedback, please write to swapnil@nasscom.in or ayush@nasscom.in.

Industry | Roundtable: The Next Frontier of Digital Commerce: Competition, Innovation, and the Future of Digital Markets

On April 16, 2026, Nasscom participated in this roundtable. The discussion examined evolving landscape of digital commerce, as platforms mature and policy attention shifts toward governance, competition, innovation, and sustainability. The roundtable saw participation from DPIIT, CBIC, members of Industry, academia and think tanks.

Academia | Panel discussion on Copyright and AI Training: India's Governance Choices

On April 11, 2026, Nasscom presented its views at ISPP Sansad 2026, a policy drafting simulation workshop, addressing implementation challenges in the two approaches proposed by the DPIIT Committee's Working Paper on Copyright and Generative AI. Nasscom elaborated its position, that the choice between mandatory licensing and a text and data mining exception should be informed by a baseline assessment of India's existing licensing landscape, technical feasibility, and implementation challenges before any legislative intervention is considered.

MEITY | Participation of Nasscom as a member of the standing expert advisory body on AI Governance

MeitY has constituted the AI Governance and Economic Group (AIGEG), a high-level inter-ministerial body that will serve as India's central institutional mechanism for AI governance policy development and coordination. The AIGEG will be supported by a Technology and Policy Expert Committee (TPEC) in which Nasscom is a member. The TPEC will provide specialised technical, policy and strategic expertise to support the functioning of the AIGEG.

RBI | Draft Master Direction on Prepaid Payment Instruments

RBI is set to replace the 2021 framework on PPIs and strengthen the related regulatory regime. The draft covers applicability of directions, authorisation of banks and non-bank issuers, eligibility and net-worth norms, governance and fit & proper criteria as well as issuance and loading of PPIs. The RBI has invited comments on the draft by May 22, 2026. (Read more)

DPIIT | Operationalisation of Startup India Fund of Funds 2.0

DPIIT has released the operational guidelines for the ₹10,000 crore Startup India Fund of Funds 2.0, outlining a structured framework for capital deployment, governance, and monitoring. The scheme will invest through SEBI-registered Category I and II AIFs, with SIDBI as the initial implementation agency, to catalyse private capital and strengthen venture funding across sectors and stages. (Read more)

List of Acronyms AI Artificial Intelligence AIGEG AI Governance and Economic Group AIF Alternative Investment Fund APA Advance Pricing Agreement ANRF Anusandhan National Research Foundation BIS Bureau of Indian Standards CBDT Central Board of Direct Taxes CBIC Central Board of Indirect Taxes and Customs CEA Central Electricity Authority CEO Chief Executive Officer CFO Chief Financial Officer COSS Code on Social Security CSP Cloud Service Provider DoR Department of Revenue DPDPA Digital Personal Data Protection Act DPIIT Department for Promotion of Industry and Internal Trade ECR Electronic Challan cum Return EoDB Ease of Doing Business EPFO Employees' Provident Fund Organisation ESIC Employees' State Insurance Corporation EV Electric Vehicle GCC Global Capability Centre GHMC Greater Hyderabad Municipal Corporation GST Goods and Services Tax IMS Invoice Management System ISPP Indian School of Public Policy IT/ITeS Information Technology / IT-enabled Services ITC Input Tax Credit JS TPRU Joint Secretary, Tax Policy and Research Unit MeitY Ministry of Electronics and Information Technology MNC Multinational Corporation MoF Ministry of Finance MV Motor Vehicles NBC National Building Code NPS National Pension System OPGW Optical Ground Wire PF Provident Fund POSH Prevention of Sexual Harassment PPI Prepaid Payment Instrument RBI Reserve Bank of India SDF Significant Data Fiduciary SEBI Securities and Exchange Board of India SEZ Special Economic Zone SIDBI Small Industries Development Bank of India SIG Special Interest Group SME Small and Medium Enterprise TPEC Technology and Policy Expert Committee TPRU Tax Policy and Research Unit UAN Universal Account Number

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