India has removed a proposed 20% local sourcing requirement for satellite internet operators such as Starlink, Eutelsat OneWeb and Amazon Leo from its final telecom authorisation rules, although industry sources said the obligation could still be enforced indirectly through satellite licence agreements and security undertakings.
The new rules also tighten security requirements for satellite operators and introduce a stricter anti-fraud framework for telecom service providers.
The draft rules issued last year required operators to source at least 20% of the value of ground-segment equipment and infrastructure from India within five years of launching commercial services.
While this requirement has been removed from the final rules released on Wednesday, industry sources Mint spoke with said the local sourcing mandate may still be indirectly reflected through GMPCS (global mobile personal communications by satellite) security guidelines and the undertakings provided by operators.
“The same has been removed from the final rules as this was creating confusion,” a government official said, noting that the GMPCS licence agreement already has this provision.
However, Satya N. Gupta, former principal adviser at the Telecom Regulatory Authority of India (Trai), said it would be better if the government provided clarity on removal of the localization clause from the final rules.
“The GMPCS agreement between operators and government might govern the same, but it needs to be clarified since the operators will be migrating from the licensing regime to the new authorization regime,” he said.
The government on Wednesday notified the Telecommunications (Authorisation for Provision of Principal Telecommunication Services) Rules, 2026, completing the transition from a licensing regime to an authorisation-based framework under the Telecommunications Act, 2023.
The delay in notifying the rules had stalled operator applications for the past seven months for various services.
The rules provide long-awaited regulatory clarity for satellite internet providers, but commercial launches will still depend on spectrum allocation and the government's final decision on pricing and related terms.
The rules allow satellite internet operators to use gateways in India to serve other countries, subject to approvals. This could make it easier to offer services in smaller neighbouring countries without setting up local ground infrastructure there.
However, the rules also impose new security requirements on satellite operators. Companies must now demonstrate their lawful interception and monitoring systems before they can begin offering services. Additionally, the operators must link fixed satellite service user terminals to users’ registered premises, with location accuracy maintained within 100 metres.
The rules also prohibit operators from routing Indian user traffic through foreign gateways, either directly or through inter-satellite links, even during domestic gateway failures or network optimisation.
Satellite operators must also ensure that user terminals cannot conceal their actual location through hardware or software spoofing tools. They will need to deploy systems to detect and report any such devices on their networks.
The notified rules also drop a “prohibited investor” clause that had sought to bar applicants that were owned, controlled or funded by entities restricted by Sebi or flagged on national security grounds.
To enhance corporate accountability, a new mandate requires that if an application for corporate insolvency resolution is admitted against a telecom entity, it must notify the central government in writing within 48 hours and furnish a copy of the tribunal’s order.
The new framework groups services under five broad authorisations—unified service authorisation for national service area, access service authorisation for one or more listed service areas, wireline access service authorisation for one or more listed service areas, internet service authorisation for national service area or one or more service areas listed, and long distance service authorisation for national service area.
The rules also introduce a stricter anti-fraud framework for both retail and consumer levels. Operators are now required to file a police complaint or FIR in cases where a subscriber is found to have used forged documents or engaged in impersonation during enrolment.
To address SIM hoarding, operators must also obtain a prior undertaking from individuals confirming that they do not hold connections beyond the prescribed limits.
Additionally, to combat spoofed communications, operators are mandated to deploy automated systems or other appropriate mechanisms to detect and block calls with false, tampered, or spoofed CLI (caller line identification).