Question: My friends and I would like to set up a manufacturing outfit in India.  As we will continue to remain in the Gulf, we are worried about the new labour regulations which have come into effect.  Can you give us some guidance in this regard?

ANSWER: With effect from November 21, 2025, four labour codes have come into effect replacing 29 earlier labour laws.  The Labour & Employment Ministry has drawn up a list of compliances under these codes in order to ensure that litigation is reduced.  Since you are setting up a new business, the registration of the company or firm has to be done and necessary licences, depending on the nature of your business, have to be obtained.  Register of persons who are employed has to be maintained giving details of the salary, wages and other payments that each employee would be entitled to. 

Once the business has commenced, it would be necessary to maintain registers for attendance, wages and overtime paid, and deductions made from the salary of each employee.  Workers will have to be enrolled for social security benefits wherever applicable and Work and Grievance Redressal Committees will have to be constituted.  At the end of each month, all employees would have to be paid their dues on time and the social security contribution would need to be deducted and deposited with the Employees’ Provident Fund Organisation and Employees’ State Insurance Corporation. 

At the end of every financial year, your firm will have to file a unified annual return, conduct safety audits and renew all applicable licences.  Upon retirement or resignation, the final dues of the concerned employee would need to be paid within two days of such event and gratuity within thirty days.  Other regulations pertaining to giving maternity benefits and reporting accidents which an employee may have been subjected to have to be complied with.  A handbook on compliances will be issued by the Ministry shortly for better clarity and understanding of the responsibility by employers under the labour codes.

Question: Many Indian companies are setting up subsidiaries or entering into joint ventures with overseas enterprises. Are they taking care of the regulatory hurdles which exist under foreign laws and are steps taken to comply with them?

ANSWER: In foreign countries rules on trade, environment, labour and taxation are rapidly changing which have significant business outcomes. Import restrictions, carbon taxes, anti-dumping duties, subsidies and localisation norms are altering cost structures and directly impacting product pricing and profit margins.  Therefore, for Indian companies having a global footprint, challenges of regulatory complexities need to be dealt with. These companies are now factoring regulations into their core business planning and compliance is taking centre stage in board rooms.

With mandatory self-reporting obligations and the risk of stringent penalties, statutory compliance has become a critical function. The reason is that any instance of violation of regulations would expose Directors to civil and even criminal liabilities. Therefore, Indian companies which are operating overseas are taking proactive steps because regulatory risks have become a survival metric and navigating the legislative maze is considered to be a competitive advantage.

HP Ranina is a practising lawyer, specialising in corporate and tax laws of India.

Question: In a recent report in the Khaleej Times, it was mentioned that UAE is setting up an AI super-computer in India marking a new phase in its infrastructure development.  Are global companies also planning to make large scale investments?

ANSWER: At the recent AI Impact Summit many well-known global firms have given their commitment to make substantial investments in India. Google has announced that it is vigorously pursuing its $15 billion AI hub which is to be set up in Vishakhapatnam which will house gigawatt-scale compute capacity. It is also setting up a new international subsea fibre optic cable gateway which will connect India and the United States with the southern hemisphere. The network will span thousands of kilometres on the seabed and carry high capacity data traffic. According to its CEO, India offers a full stack AI facility which will help research institutions, infrastructure, and technology that will benefit the healthcare, education and agricultural sectors. This company has also announced a $ 30 million initiative to improve public services which will benefit millions of Indian citizens.

The CEO of OpenAI has also announced investments because India is not merely adopting artificial intelligence at scale but shaping its trajectory as more than a hundred million youngsters in India use ChatGPT every week. The cost of OpenAI’s models has come down drastically in fourteen months and will continue to do so. This will help small, medium and micro enterprises and generate quick returns on investments made by startups. 

The writer is a practising lawyer, specialising in corporate and fiscal laws of India.