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India's Insolvency Law Gets Major Overhaul
2 Feb
Summary
- New amendments aim for faster resolution and reduced judicial burden.
- Creditors may soon initiate insolvency proceedings.
- Cross-border insolvency framework proposed for international stakeholders.
Amendments introduced in August 2025 are poised to reshape India's insolvency regime, aiming to expedite resolutions and lessen the load on the country's judicial system. These proposed changes seek to enhance the overall effectiveness and timeliness of insolvency proceedings.
The key features of the draft legislation include granting creditors the right to initiate insolvency proceedings. It also proposes enabling out-of-court resolutions for genuine business failures and introducing a group insolvency mechanism. This mechanism is designed to manage cases involving intricate corporate structures more efficiently.
Furthermore, the bill introduces a cross-border insolvency framework. The objective is to safeguard the interests of both Indian and international stakeholders. This addition aims to bolster the global recognition and standing of India's insolvency process, bringing it closer to international standards.
