May 2025 - S&R Associates

A Deep Dive into the Draft Guidelines for Virtual Power Purchase Agreements

Insights | May 26, 2025 | Practice Area: Clean Energy, Corporate Governance and ESG, Projects; Infrastructure and Energy, Regulatory

On May 22, 2025, India’s Central Electricity Regulatory Commission released draft guidelines for virtual power purchase agreements (“VPPAs”), further to an opinion from theSecurities and Exchange Board of India on regulatory jurisdiction. Unlike a ‘physical’ power purchase agreement, which involves the actual delivery of electricity, a VPPA is essentially a bespoke financial contract to hedge against market volatility and other risks. Pursuant to the draft guidelines,the difference between the VPPAprice and the market price will be settled bilaterally between the contractingparties.
In the United States and elsewhere, VPPAs have appealed to a wide variety of corporate buyers, including to meet renewable energy (“RE”) targets, improve sustainability performance and branding, andsecure long-term certainty on electricitycosts and RE intermittency.
While the draft guidelines specify that VPPAs will be non-tradable and non-transferable, the RE involved in a VPPA will be eligible for RE certificate (“REC”) issuances. If the RE generator sells electricity through power exchanges or other authorized modes, it may directly transfer the RECs received to an eligible consumer. Such consumer, in turn, can use such RECs for compliance or green attribute claims.
However, existing regulations on RECs do notprovide for the sale of ‘bundled’ certificates, where RECs can be sold together with their associated RE. This limitation may impact verifiability and ESG claims. The draft guidelines suggest that, apart from statutory certificates issued under REC regulations, no other environmental attribute certificate (“EAC”) may be transferred in a VPPA, potentially compromising the commercial viability of such arrangements.
Global trends indicate that VPPAs need not always include EAC transfers. However, the draft guidelines make REC transfers mandatory in VPPAs. Although transferred RECs can be used for meeting RE consumption targets, they cannot be traded. This may restrict consumers from entering into VPPAs for capacities not supported by RECs.

RBI Eases Investments by FPIs in Corporate Debt Securities

Insights | May 22, 2025 | Practice Area: Banking and Finance, General Corporate, Investment Funds, Mergers and Acquisitions, Private Equity, Restructuring and Insolvency, Tax

The Reserve Bank of India recently issued a circular onInvestments by Foreign Portfolio Investors in Corporate Debt Securities through the General Route(“RBI Circular”) on May 08, 2025, to withdraw short term investment limits and concentration limits, applicable on investments by FPI in corporate debt securities under the general route. This note highlights the changes to the regulatory framework brought about by the RBI Circular that are intended to provide greater flexibility and ease of investments for FPIs investing in corporate debt securities in India under the general route.

Regulatory Initiatives on ESG Disclosure Requirements in India

Insights | May 21, 2025 | Practice Area: Banking and Finance, Corporate Governance and ESG, General Corporate, Regulatory

Regulatory initiatives to build the legal frameworks around environmental, social, and governance (“ESG”) disclosures in India, while still nascent, are not of recent origin. Various regulators have gradually introduced requirements aimed at enhancing transparency and fostering corporate responsibility. This note examines these evolving ESG disclosure frameworks as implemented by the Securities and Exchange Board of India, the Reserve Bank of India, and the International Financial Services Centres Authority. It further analyzes the regulatory gaps that these initiatives seek to fill, andproposes solutions to enhance these frameworks.

India’s Concerns About Deepseek and Possible Regulatory Responses

Insights | May 20, 2025 | Practice Area: Data, Regulatory, Technology; Media and Telecommunications

Large language models (“LLMs”) connected with DeepSeek, OpenAI’s ChatGPT, and xAI’s Grok, have faced significant regulatory attention in recent times. In particular, DeepSeek’s LLMs and artificial intelligence (“AI”)-based chatbots have been prohibited, restricted, and/or extensively reviewed by several countries, including because of concerns related to privacy and national security.
While the Government of India (“Government”) is currently monitoring the use of DeepSeek by Indian users, it may adopt regulatory measures under existing provisions of the Information Technology Act, 2000 (“IT Act”) and its rules, as necessary. Such provisions include those related to: (i) blocking public access on account of risks to the security or sovereignty of India (under section 69A of the IT Act), subject to specified procedures and safeguards; and (ii) ‘safe harbor’ and intermediary liability (under section 79 of the IT Act), subject to due diligence and other obligations in respect of hosting third-party information.
Further, the Government has certain powers under the Digital Personal Data Protection Act, 2023 (“DPDP Act”) and its rules, the provisions of which are yet to be notified but are expected to come into force soon. Such powers include restricting cross-border data flows/ transfers and requiring data localization in certain circumstances.

Implementation of the Environment (Construction and Demolition) Waste Management Rules, 2025 by Project Developers

Insights | May 19, 2025 | Practice Area: Clean Energy, Corporate Governance and ESG, Projects; Infrastructure and Energy, Real Estate, Regulatory

The Environment (Construction and Demolition) Waste Management Rules, 2025 (“Construction Waste Rules”) have been recently notified as a response to growing concerns about construction dust pollution from projects across India. The Construction Waste Rules set out an integrated framework for waste management as well as utilization by imposing extended producer responsibility aided by a central interface based online monitoring and compliance assessment. This note analyzes certain key provisions in the Construction Waste Rules, especially from the perspective of infrastructure and real estate developers and contractors, including considerations for risk allocation.

Environmental Law: Issue 1 of 2025

Periodic Roundups | May 7, 2025 | Practice Area: Clean Energy, Corporate Governance and ESG, Litigation and Arbitration, Regulatory

Issue 1 of 2025 of our Quarterly Newsletter on Environmental Law covers key judicial and regulatory developments between the months of January and March 2025. In respect of judicial updates, Issue 1 includes judgements and orders of the Supreme Court, High Courts and the National Green Tribunal related to inter-alia color-coded registration plates for diesel and petrol vehicles; investigation into illegal earth mining and unauthorized brick kilns in elephant corridors; coastal regulation zone clearances; wetlands of international importance; and tree-felling restrictions and industrial expansion in the Taj Trapezium Zone.
In addition, Issue 1 also tracks regulatory updates related to inter-alia plastic and battery waste management; end-of-life vehicles; revised classifications in respect of industrial sectors; consent guidelines; standard operating procedure for petrol depots; effluent and emission standards for the caustic soda industry; amendments to environment impact assessment norms in respect of linear projects; and mandatory registration requirements for lead acid battery dealers, refurbishers and recyclers.

Misleading Advertisements: A Cautionary Tale on Advertisement of Consumer Goods and Services

Insights | May 6, 2025 | Practice Area: General Corporate, Regulatory

Misleading advertisements in India have been a growing concern, particularly in sectors like healthcare, pharmaceuticals, food and consumer goods, where exaggerated or false claims can have serious consequences. This note provides an insight into the legal and ethical implications of misleading advertisements in the consumer goods sector and how the Supreme Court has reinforced its directions issued in the case ofIndian Medical Association v. Union of Indiaby actively reviewing submissions by central and state governmental bodies on the actions taken by them to prevent violations of advertising laws in India. The Supreme Court has demanded concrete actions to ensure compliance with advertising laws, signaling a stricter approach towards enforcement. This judicial intervention underscores a new era of consumer protection, where regulatory complacency is no longer tolerated and misleading advertisements face stringent scrutiny.

Regulatory Landscape for SM REITs in India

Insights | May 5, 2025 | Practice Area: Capital Markets, Investment Funds, InvITs; REITs and Business Trusts, Real Estate, Regulatory

In March 2024, the Securities and Exchange Board of India (“SEBI”) amended the SEBI (Real Estate Investment Trusts) Regulations, 2014, to introduce Small and Medium Real Estate Investment Trusts (“SM REITs”), aiming to regulate fractional ownership platforms (“FOPs”) that offer retail investors access to real estate. This move addresses concerns related to investor protection, regulatory gaps, and operational transparency in FOPs. SM REITs are structured as SEBI-registered trusts and are required to comply with specific eligibility, investment, and governance criteria. This note outlines procedures for registration, scheme launches, and investor safeguards intended to enhance investor confidence, market liquidity, and standardized practices in India’s evolving real estate sector.