IUKFP: Recommendations for India’s New Insolvency Regulations

This paper identifies a number of areas where the ease of doing business in India could be improved by addressing institutional issues around insolvency including greater legal clarity and speedy processes.

India’s new insolvency regulations are an important policy priority in order to improve ease of doing business by providing legal clarity and speedy processes. To this effect, the Indian government has set up the Bankruptcy Law Reform Committee (BLRC) in August 2014. The scope of this committee is to i) suggest immediate reforms to the existing framework of bankruptcy and ii) develop new insolvency laws for India.

India shares a common law system with the UK and can therefore draw significantly from the UK system of law and practice. The IUKFP has prepared this policy paper for submission to the BLRC which has incorporated its suggestions in the current draft of the report that has been submitted to the government. This paper represents a practitioner view on the institutional mechanisms and select principles that will contribute to a successful insolvency regime in India. The contributions to India’s new insolvency laws is part of the Mutual Sharing of Expertise, one of nine work streams for the IUKFP.

We hope that as a next stage, both governments, regulators and the private sector will look to discuss these recommendations in detail with a view to identifying specific actions and assigning roles for implementation. The private sector is committed to playing its part in this process. The IUKFP Working Group that helped produce this paper will continue to support and provide input to the BLRC deliberations and will be available for specific discussions with practitioners and policymakers. We propose that a review of progress be undertaken by the end of June 2017 and reported to the co-Chairmen of the IUKFP. The paper identifies a number of suggested outcomes against which such a review could track progress.