Carbon credits in India

Carbon Credits: An Overview

The idea of carbon credits, including the establishment of a market for such credits, has generated significant global attention in recent years. While this idea is not new, it has become especially important today to understand what such credits entail and how these can benefit businesses – given the worldwide momentum towards ESG-related goals.
Carbon market transactions involve the purchase of emission rights from entities which have the technical and/or economic ability to reduce emissions. India’s Carbon Credit Trading Scheme, 2023 defines a ‘carbon credit’ to mean a value assigned to a reduction, removal or avoidance of emitted greenhouse gases amounting to one metric ton of CO2 or its equivalent. Accordingly, certificates may be issued by the government under the newly amended Energy Conservation Act, 2001.
In regulated carbon markets, each registered/obligated entity may be allotted a certain number of credits. Those that produce fewer emissions than the number of credits issued by the government (or an authorized agency) may enjoy a surplus. Conversely, companies with older and/or less efficient operations may generate more emissions than their credit allocation. The latter category may then look to buy credits to balance their emissions, including on account of a regulatory mandate.
This exchange between buyers and sellers will establish the market price. If it is cheaper for an emitter to trade in, rather than control, emissions, they can buy credits. Those that find it feasible to reduce emissions at a cost less than the market price can sell. Emissions trading can thus transform the right to emit a pollutant into a tradable good and create economic incentives for reduction.


Capital Reduction

Capital Reduction: Tax Conundrums!

Capital Reduction, simply put, refers to the technique of reducing a company’s share capital in any form. It is a usually adopted mechanism by the companies for re-modelling their capital structure, amongst other means (viz., buy-back of shares and redemption of the preference share capital). Depending upon the objectives and attendant circumstances, a company can undertake capital reduction either with or without making any payment to its shareholders. This note discusses the tax implications that may arise in the hands of the company undertaking such capital reduction and its shareholders under different situations.


Managing Consent

Yes Means Yes: Managing Consent Under India’s New Data Protection Law

Unlike the EU’s GDPR (which allows non-consensual data processing under various circumstances), India’s new Digital Personal Data Protection Act, 2023 (the “DPDP Act”) relies heavily on consent as a ground for processing personal data. Other than a few ‘legitimate uses’ specified in the DPDP Act, consent will be the only legal basis for processing digital personal data in India once the law enters into force. This note discusses the role of consent managers and the potential of notice-and-consent management platforms (both inhouse and outsourced) to help entities comply with their obligations under the DPDP Act.


Disclosure Requirement SEBI Listing Regulations

Assessing the Sweep of a Recently Introduced Disclosure Requirement in the SEBI Listing Regulations

On June 14, 2023, the Securities and Exchange Board of India (“SEBI”) notified certain amendments to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“SEBI Listing Regulations”). The amendments are designed to strengthen corporate governance in listed entities by enhancing shareholder suffrage and disclosure of material events. Notably, the amendments introduced a new Regulation 30A that is to be read with a newly inserted Clause 5A of Paragraph A of Part A of Schedule III to the SEBI Listing Regulations (“Clause 5A”). Regulation 30A mandates shareholders, promoters, promoter group entities, related parties, directors, key managerial personnel, and employees of a listed entity or of its holding company, subsidiary, or associate company (“Specified Persons”) to notify the listed entity as and when any of them enters into agreements covered by Clause 5A (“5A Agreements”).
This note highlights the key features of Clause 5A and outlines certain practical considerations for Specified Persons and listed entities.


Digital Personal Data Protection Act 2023

It’s Personal: A Roadmap for Data Mapping in Digital India

Although India’s newly published Digital Personal Data Protection Act, 2023 (the “DPDP Act”) is not yet in force, it is likely to take effect soon. Accordingly, while entities wait for the government to notify discrete provisions of the DPDP Act along with specific rules under it, they could use this transitional phase to align themselves to the requirements of the new regime and prepare for future obligations. Before anything else, organizations could draw up a compliance roadmap, the starting point of which should include a comprehensive data mapping exercise.
Organizational databases are likely to contain vast volumes of digitized information, not all of which may be considered ‘personal’ data. This note discusses the main features of the data mapping process, including the determination of, and the processual prerogatives with respect to, personal information contained in mixed datasets – where organizational data inventories are likely to comprise both personal and non-personal data.


Amendments to the Voluntary Delisting Process

Proposed Amendments to the Voluntary Delisting Process

The Securities and Exchange Board of India issued a consultation paper proposing certain amendments to the Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2021. Amendments have been proposed to the counter-offer mechanism of the reverse book-building process, manner of calculation of floor price and the determination of the reference date. A fixed-price route for delisting and a framework for delisting of investment holding companies have also been proposed. This note summarizes the proposed changes to the voluntary delisting process.


Digital Personal Data Protection Act 2023

All Aboard: Getting Ready for India’s New Data Protection Journey

The Digital Personal Data Protection Act, 2023 (the “DPDP”) is poised to (re)define India’s legal framework with respect to the processing of digital personal data.
This new regime is designed to be an overarching one, irrespective of data category (in terms of sensitivity) or entity type. While provisions of the DPDP are likely to be notified soon, all organizations need to check whether and to what extent the DPDP applies to them and their operations.