Clean Energy

Clean Energy: Issue 1 of 2024

Issue 1 of 2024 of S&R’s Quarterly Roundup Series on Clean Energy covers the period between January and March 2024. The covered period witnessed several transformational developments, such as those in respect of the Electricity Rules, 2005 involving the delicensing of transmission lines and capping of open access charges; a renewed focus on distributed/decentralized solar energy; requirements related to the approved list of manufactures and models in connection with solar photovoltaic modules; green hydrogen policies at the state level (e.g., Uttar Pradesh); and incentive schemes and guidelines for pilot projects across key sectors (like shipping, steel and transport) related to the production and supply of green hydrogen and green ammonia, along with detailed scheme guidelines for the manufacture of electrolyzers, the setting up of hydrogen hubs, as well as on research and development and skilling.


India-EFTA Agreement

Investments under the India-EFTA Agreement: Re-writing the Rules of the Game?

On March 10, 2024, India entered into a trade and economic partnership agreement (the “TEPA”) with the European Free Trade Association (“EFTA”). The Investment Chapter of the TEPA requires the EFTA States to aim towards (i) increasing foreign direct investment (“FDI”), and (ii) facilitating new jobs in India by specified numbers and timeframes, in exchange for India enhancing market access and simplifying customs procedures. This unique formulation could provide a new template for negotiating international investment agreements in the future – especially between developed and developing countries – given that it deviates from traditional treaty design by providing for non-reciprocal rights and differentiated responsibilities. This anomaly, in turn, could have far-reaching consequences for foreign investors and global FDI flows. However, the TEPA’s novel provisions also raise certain legal and practical concerns. In this note, we analyze such provisions of the Investment Chapter.


EU’s New Law on Artificial Intelligence

The EU’s New Law on Artificial Intelligence: Global Implications

Pursuant to ‘trilogue’ negotiations among major institutions of the EU, an agreement on a proposed regulation with respect to artificial intelligence (“AI”) was arrived at in Brussels a few months ago, the text of which may be approved, published, and subsequently enter into force later this year. This is the world’s first comprehensive law on AI (the “AI Act”). According to the current draft, the AI Act should apply two years after its entry into force, likely from the second quarter of 2026.
The broad focus of this new law is a risk-based approach, based on an AI system’s capacity to cause harm. Compared to prior legislative proposals, additional elements of the current agreement include rules on high-impact general-purpose AI models that can cause systemic risk in the future, as well as on high-risk AI systems. The AI Act may set a global standard for AI regulation in other jurisdictions, just like the EU’s General Data Protection Regulation (“GDPR”) did with respect to personal information. Moreover, similar to the GDPR, one of the most important effects of the AI Act will be its extraterritorial scope, involving obligations for non-EU businesses as well.


Considerations in Outbound Foreign Investment

Geopolitical and National Security Considerations in Outbound Foreign Investment

In a world characterized by geopolitical shifts and heightened national security concerns, the realm of foreign investment is undergoing a profound transformation. Disruptive events, evolving alliances and strategic recalibrations are increasingly influencing how nations perceive the risks and opportunities associated with foreign investment. As international power structures continue to evolve, the rise of new global players – coupled with technological competition in emerging sectors, underscore the need for nations to reassess their foreign investment strategies in alignment with broader geopolitical goals.
In turn, businesses may be expected to not only navigate multiple FDI regimes in the future, but different outbound screening regulations too. Although the final scope of outbound investment review regimes is still being decided, both the US and the EU have indicated that critical technologies which have the potential to advance military and dual-use capabilities, especially in respect of outbound investment into strategic adversaries, will be additionally scrutinized. Accordingly, investors may need to integrate such factors in their due diligence and risk management processes.


Can Deepfakes be Leveraged Responsibly?

Can Deepfakes be Leveraged Responsibly?

‘Deepfakes’, which involve the creation of highly realistic content (images, video, audio) by harnessing the power of artificial intelligence (“AI”), raise important concerns related to misinformation, identity theft, fraud, privacy infringement and electoral democracy – including as recently witnessed in India via incidents involving media personalities and politicians. However, deepfakes also promise exciting possibilities in various fields and business applications, including for personalized marketing, virtual training simulations and operational efficiency.
As of date, India does not have a specific law to regulate deepfakes or AI. However, certain provisions under the Information Technology Act, 2000 and its corresponding rules (together, the “IT Act”) may be invoked by appropriate authorities in this regard, including with respect to potential misuse and related penalties. In addition, new legislation – such as the proposed Digital India Act and the recently published Digital Personal Data Protection Act, 2023, respectively – which, when acting together, remain poised to overhaul the IT Act in its entirety – may introduce bespoke rules on regulating AI and deepfakes in India.
As organizations navigate this transformative techno-legal landscape, the responsible use of deepfake technology – including through a combined adoption of ethical frameworks, transparent policies, security measures, technical collaborations and awareness campaigns – is necessary to ensure a positive impact on the business ecosystem.
 


Clean Energy

Clean Energy: Issue 4 of 2023

S&R Associates presents the fourth issue of its quarterly roundup series on clean energy, covering the months of November and December 2023.
Issue No. 4 comprises regulatory updates on renewable energy and electric vehicles, respectively, including central and state government notifications in this regard, along with India-related updates and international developments from within the reviewed period.
In addition, Issue No. 4 contains a note on the investment viability of innovative and/or clean construction technologies, as published in a Knowledge Brief of the Asia Pacific Real Estate Association (APREA).


Regulating Artificial Intelligence

India’s Initiatives on Regulating Artificial Intelligence: Balancing Promotion with Protection

India’s stance on AI regulation has grown more sophisticated over the past few months. On the one hand, the country’s unique requirements have been articulated in respect of making vast datasets available for AI training, as well as to enable rapid AI deployment, innovation and growth. On the other hand, including for the purpose of addressing global concerns (some of which have arisen locally pursuant to recent events like those involving ‘deepfakes’), the government may rely on external influence – such as the risk-based approach contained in a recent political agreement on the EU’s AI Act.
With respect to the latter, new national laws, such as the proposed Digital India Act, may soon establish a concrete compliance framework, including in terms of regulating new technologies, protecting digital users from harm, enhancing intermediary liability, promoting algorithmic accountability and transparency, as well as curtailing monopoly, discrimination and bias. Further, recent reports on AI provide a useful blueprint for India’s long-term vision on AI governance, intellectual property, compute infrastructure and ethical considerations.


Clean energy

Clean Energy: Issue 3 of 2023

S&R Associates presents the third issue of its quarterly roundup series on clean energy. Here, we cover updates from the period between the months of July and October of 2023.
This issue comprises regulatory updates on renewable energy and electric vehicles, respectively, including central and state government notifications in this regard, along with India-related updates and international developments.
In addition, we provide an overview of carbon credits, including in respect of its market dynamics.


Innovative Constructions

Innovative Constructions: Assessing the Investment Viability of New Construction Technologies

Every year, Indians require 10 million new homes. At the same time, global markets are increasingly focused on sustainability, climate change and ESG-related goals. The confluence of such factors has created various opportunities to employ climate-responsive construction techniques, including through the use of eco-friendly and sustainable material. Relatedly, the interplay of energy-efficient solutions, green-certified buildings, targeted investments and financing, key legislative changes, government incentives and a coordinated regulatory framework, as well as increased digitalization, may change this ecosystem in fundamental ways.


Capital Reduction The Position of Minority Shareholders

Reliance Retail’s Capital Reduction: The Position of Minority Shareholders

In July 2023, Reliance Industries Limited announced that the board of directors of its indirect subsidiary, Reliance Retail Limited has approved a proposal to reduce its share capital. The proposed reduction involves canceling the shareholding of the minority shareholders of Reliance Retail, making Reliance Retail a wholly-owned subsidiary of its parent company, Reliance Retail Ventures Limited.
This capital reduction is of interest due to the trading of Reliance Retail’s equity shares on the unlisted market. While Reliance Retail’s valuation is based on reports from independent valuers, objections could arise if the minority shareholders perceive the offered consideration as lower than the price in the unlisted market.