It is worth pausing about why an ordinance was the route chosen. It shows the closely watching foreign holders of Indian bonds that the government is willing to move at the pace markets need.
What Really Changes?
The one change that reached the public was an amendment to Section 10A of the Payment and Settlement Systems Act, 2007, which has kept UPI and RuPay transactions free. The amendment itself doesn’t introduce a charge. It simply gives the government the option, to apply a fee at some point to a specific category of larger merchant transactions, managed by the NPCI. Ordinary consumers have nothing to worry about as any further decision would be handled through proper processes and consultation. However, for businesses, the more meaningful changes lie elsewhere. Most of them share one idea: fewer decisions should depend on getting government approval first.
In electronics manufacturing, foreign companies supplying capital goods, equipment, or tooling to Indian contract manufacturers had an exemption set to expire in 2030-31, now extended to 2040-41. This gives an extra decade of certainty for investments with long payback periods. The law also clearly defines, for the first time, what specified electronic goods include – phones, laptops, all-in-one PCs, tablets, servers, ultra-small-form-factor devices, their sub-assemblies, and hearables, wearables and accessories. A related measure, gives a new fifteen-year exemption to foreign companies storing components in customs-bonded warehouses for supply to Indian manufacturers, directly addressing the kind of supply chain instability that influenced this act.
Level Playing Field for India’s Diamond Trade
India polishes most of the world’s diamonds, yet the trade in rough stones has mostly happened outside the country, in Antwerp and Dubai. From 1 October 2026, income tax on rough diamond sales conducted through special notified zones in Mumbai and Surat will be waived for foreign mining companies, sightholders, brokers, aggregators and auction houses for fifteen years, until March 2041. Surcharges would otherwise push the effective tax rate to about a third of profits, so this is a real financial commitment, not a symbolic one. A Namibian delegation has already visited to discuss direct supply arrangements, an early sign worth watching.
Data centres and fund management follow the same principle. A foreign company buying Indian data centre services earlier needed a specific government notification, and the facility itself needed prior approval. Both requirements are gone now, replaced by standard filings. The exemption, extended to March 2047, covers data centres that are leased and run from India, not only those owned by foreign companies. Offshore fund managers no longer need to meet thirteen separate conditions to avoid being treated as doing business in India; eight have been dropped, leaving five core safeguards in place.
The data centre change may sound like paperwork, but it solves a real problem. Much of India’s data centre growth depends on global cloud providers who lease space rather than build it themselves. Replacing with a standard filing will quickly translate as new capacity. The fund management change follows the same thinking: fewer conditions to track means fewer reasons for a global fund to hold back, while the safeguards that remain keep a check on misuse.
Long-Term Commitments Against Short-Term Trade-offs
It wouldn’t be fair to present this as a change with no trade-offs. The Lok Sabha passed the bill quickly with limited debate. Domestic manufacturers, who don’t directly gain from measures aimed at their foreign suppliers and partners, will still need their own support to stay competitive. And any easing of offshore fund conditions could draw scrutiny on round-tripping, which the remaining safeguards will need to guard against closely.
Taken together, these changes suggest a government trying to hold its nerve in a difficult moment, choosing patience over quick fixes.
The author is a public policy and government affairs strategist.
