India’s top companies are estimated to have spent anywhere between ₹69,000 crore and ₹72,000 crore on legal matters in the fiscal year ended March. The spending has risen from ₹60,000 crore in FY25 due to shifting regulations, geopolitical risks and rising compliance demands. And this is set to grow at a quicker pace this year amid the ongoing global disruptions, experts said.
“From our conversations with general counsels and law firms, we estimate a 15% -20% rise in legal expenses for corporate India (in FY26),” said Ritvik Lukose, chief executive officer of Vahura, a governance search and consulting firm. “This includes expansion of inhouse legal teams, creation of specialist roles, investment in legal tech and increased external legal fees.”
In FY25, the spending was up a little over 14% at ₹60,000 crore. For FY24, the amount was around ₹52,568 crore, as per Vahura .
According to Lukose, while routine legal work is now being handled more through inhouse teams and standardized processes, the biggest spending continues to be on high-stakes litigation, merger and acquisition (M&A) activity and capital markets work.
Why legal matters more now
Law firms, including Khaitan & Co and JSA Advocates & Solicitors and Singhania and Co, said clients are becoming more cautious amid new laws and geopolitical uncertainty, seeking legal advice before taking decisions, as the cost of non-compliance can outweigh the benefits of acting quickly.
For example, Khaitan has seen strong demand for advice on matters such as cross-border deals, regulatory and governance advisory, data and privacy compliance, environmental, social and governance (ESG) work, and disputes.
“We are seeing higher legal advisory and compliance spending in FY26 compared to FY25,” said Prasenjit Chakravarti, partner at Khaitan & Co. “This is mainly due to more complex regulations, especially around data, ESG and sector rules, higher governance expectations, cross-border risks, and more detailed advisory work.”
Recent changes in laws have also added to companies' burden. Late 2025, the new labour codes started getting implemented, along with the Digital Personal Data Protection Rules, 2025, and changes under the income tax framework. At the same time, Securities and Exchange Board of India's (Sebi) ESG disclosure requirements under the Business Responsibility and Sustainability Reporting (BRSR) framework have increased compliance needs, making companies seek more legal support.
“This approach is driven by the fact that the cost of non-compliance can be much higher than legal costs,” said Ashish Suman, partner at JSA Advocates & Solicitors. “Sanctions can affect a company’s operations across countries, while non-compliance with laws like data protection or labour rules can lead to penalties.”
Geopolitical tensions and sanctions have further increased legal work, especially in cross-border deals. Law firms are seeing more queries on force majeure clauses and MAC clauses (material adverse change), particularly in contracts linked to conflict-hit regions. The war in West Asia and disruptions around the Strait of Hormuz have pushed companies to seek legal advice on supply chains and contract risks.
Force majeure clauses allow companies to pause or avoid obligations if events like war or sanctions disrupt business, while a MAC clause allows a party to exit or renegotiate a deal if a major negative event affects the transaction. With global uncertainties on the rise, companies are reviewing such clauses more closely and seeking legal advice on them.
“Even normal cross-border contracts today involve more discussion around sanctions, supply chains, data protection and geopolitical risks than before,” Chakravarti of Khaitan added.
Mint earlier reported that sanctions related to geopolitical issues are driving many insolvency disputes in India, as companies are unable to perform contracts involving sanctioned entities.
According to an April blog by law firm Cyril Amarchand Mangaldas, international sanctions are making compliance more complex for companies. Earlier, businesses relied on the 50% ownership rule, where an entity was treated as sanctioned only if a designated person owned 50% or more stake. Now, regulators in the US, EU and UK are also examining control and influence, not just ownership.
More spending likely
Looking ahead, experts expect companies' legal spending to be on the rise in FY27. While work around M&As and the capital markets may slow down, areas such as litigation, restructuring, insolvency and compliance are likely to grow, they said.
“We are consistently seeing that tax and corporate compliance are particularly active because clients want clarity before committing to transactions or restructuring," said Rohit Jain, managing partner at Singhania & Co. "Another growing area is technology-related compliance, including Al governance, data usage, cybersecurity obligations and documentation for automated decision-making or audit trails.”
Lukose from Vahura said the full impact of geo-political crisis will be clearer in FY27. The ongoing US-Iran war, which started end February 2026, has severely disrupted global supply chains across sectors.