The past year has been a defining period for the Indian telecommunications sector. Driven by progressive policy and regulatory shifts, the industry has taken significant strides towards self-reliance and digitalisation. Overall, there has been growth across the sector, in data centres, satellite communications, data protection, cybersecurity, semiconductors and digital infrastructure. A look at the key policy and regulatory moves during the year…
Union budget and fiscal policy
The Union budget 2026-27 gave telecom, cloud, data centres and semiconductors a strong push. The standout move was the tax holiday until 2047 for foreign cloud providers using India-based data centres to serve global markets. Further, any sales made to Indian customers were mandated to be routed through a local reseller, who would earn a 15 per cent safe harbour margin on these transactions.
Telecom authorisation and licensing
The draft rules floated in September 2025 first proposed an authorisation model, doing away with licences in favour of a simpler approval process. This took formal shape through the Authorisation Rules for Principal Telecommunication Services, in effect from June 23, 2026, which replaced the decades-old unified licence. The new rules introduced a digital system valid for up to 20 years and finally retired the paperwork-heavy Telegraph Act of 1885. A follow-up framework, the Authorisation Rules for Telecommunication Network, was introduced in July 2026, creating six distinct network categories that operators can apply for entirely through the Telecom e-Services Portal. Together, the two rules successfully replaced a licensing system that had been operational for over a century.
Spectrum, wireless and satellite communications
The spectrum policy also underwent sweeping changes. The National Frequency Allocation Plan 2025, effective from December 30, 2025, now serves as the master reference for spectrum use across the entire range, from 8.3 kilohertz to 3000 gigahertz (GHz), guiding everyone from network operators to equipment manufacturers.
Further, the lower 6 GHz band was delicensed in January 2026 for indoor use, opening the door to faster Wi-Fi 6 and Wi-Fi 7 devices at home.
Similarly, June 2026 saw the introduction of draft rules on administrative spectrum allocation, setting out how airwaves outside the auction process can be assigned to state-run operators, law enforcement agencies, and satellite providers, such as very small aperture terminal and teleport operators.
Data centres and the digital economy
The data centre and cloud infrastructure segments received fresh support. The draft National Data Centre Policy offers developers a tax exemption of up to 20 years, tied to meeting capacity, energy efficiency, and job creation targets, alongside GST credit on capital assets. States have contributed significantly to this push.
The Uttar Pradesh government approved a new policy worth Rs 2 trillion to establish the state as a green, artificial intelligence (AI)-ready hub with a capacity of 2 GW.
Gujarat went further with its maiden data centre policy for 2026-29, targeting Rs 6 trillion in investments and 7.5 GW of capacity, backed by fiscal support such as capital and power tariff subsidies as well as faster approval timelines for developers.
Additionally, the country notified its first cloud computing, data centre and AI ethics standards, in alignment with ISO and IEC norms.
Boost in semiconductor and hardware manufacturing
Semiconductors and hardware manufacturing received a major boost as well. The union cabinet cleared the India Semiconductor Mission 2.0 (ISM 2.0), a Rs 1.27 trillion initiative built around six pillars, aiming to build on the momentum of ISM 1.0. Alongside this, the government approved the Mobile Phone Manufacturing Scheme, worth Rs 625 billion, for the period 2026-27 to 2030-31. The scheme has been designed to deepen domestic value addition, strengthen local supply chains, and help Indian brands build devices around their own patents rather than licensed technology.
Cybersecurity and data privacy
Cybersecurity and data protection saw two major shifts. The Digital Personal Data Protection (DPDP) Rules 2025 finally gave full operational effect to the DPDP Act of 2023, spelling out seven core principles for handling personal data including consent, purpose limitation, data minimisation, and accountability. Alongside this, the Ministry of Electronics and IT rolled out the India AI Governance Guidelines under the IndiaAI Mission, aiming to foster safe and responsible AI adoption across sectors while keeping a close watch on emerging risks.
Consumer protection and anti-spam measures
The consumer protection and anti-spam rules saw the most significant changes during the year. In the biggest push yet against digital fraud and “digital arrest” scams, the department directed over-the-top platforms to bind their apps to the phone number active on a single device, giving them 90 days to comply or face penalties. On the spam front, the Telecom Regulatory Authority of India (TRAI) instructed financial entities regulated by the RBI, SEBI and PFRDA to adopt the 1600 numbering series for voice calls, making such calls instantly recognisable and easier to filter out. Additionally, TRAI floated the Draft Telecom Consumers Protection (Thirteenth Amendment) Regulations, 2026 for mandatory voice and SMS vouchers, after finding that very few operators were actually offering them to users.
Shashwat Singh
