India Business Law Journal – July/August 2023

2023: A space commodity

Into the unknown on legal parameters

With the completion of the successful Chandrayaan-3 lunar mission, large companies and startups are readying plans to further expand their involvement in the space sector. Large conglomerates such as Larsen & Toubro, the Godrej group and Walchandnagar Industries played a critical role by supplying equipment, components and other technologies in making the mission happen.

While space was once a stronghold for public sector companies, this integration of private entities holds the potential to unlock innovation and prospects within India’s space industry, aligning with worldwide space exploration endeavours.

But by venturing into space, private companies are traversing uncharted territory in a literal and a metaphoric sense. Our article Final frontiers, first opportunities finds that this throws up questions and challenges such as safeguarding intellectual property rights, ensuring fair competition and keeping up to date on evolving regulation.

This government has sought to encourage private sector involvement further with the Indian Space Policy, released in April 2023, which seeks to create a suitable regulatory environment for private sector participation. The policy is a significant change as it envisions private companies becoming independent actors in the space sector instead of being solely vendors or suppliers to government programmes.

Growing pains in startup crib underlines how India’s startup ecosystem, once hailed as a beacon of innovation and economic growth, has been facing significant challenges in 2023. Financial irregularities, lower funding, shrinking valuations and corporate governance lapses have shaken the confidence in some high-profile startups.

During the first half of the year, a concerning trend emerged as thousands of employees were laid off, accompanied by significant reductions in funding. Equally worrisome is the fact that out of a total of 74 unicorn companies, more than three-quarters have failed to generate a profit.

Global factors including, but not restricted to, the covid-19 pandemic, geopolitical tensions and regulatory changes have contributed to the slowdown. Investor demand for profitability from startups has further led to a shift in funding dynamics and a call for
stronger governance.

The startup ecosystem is becoming a ground for the survival of the fittest. While challenges persist, startups are learning valuable lessons and adapting to survive in this evolving landscape.

Touching down on workplace evolution highlights the evolving landscape of workplace dynamics, where modern in-house counsel are no longer confined to compliance and litigation matters. They play a pivotal role in shaping inclusive workplaces that appeal, making them strategic drivers for organisational growth. With the challenges of attracting and retaining talent in a competitive job market, factors beyond remuneration must be factored in.

While India’s employment laws originate from constitutional principles that underscore fair and just work conditions, outdated statutes need creative compliance solutions until proposed labour codes take effect.

Additionally, legislation that includes but is not restricted to the Maternity Benefit Act, Sexual Harassment Act, Transgender Persons Act and HIV Act must highlight the need for inclusive workplaces, with in-house counsel actively involved in interpretation, policy development and compliance.

In-house counsel are required to work on legal frameworks and customise them to ensure gender-neutral and diverse work environments, collaborating with HR to find practical solutions like third-party creche arrangements. According to our experts, the role of the in-house counsel has transformed into one of shaping a conducive and inclusive workplace environment with an emphasis on constructive legal interpretation and policy implementation.

In our State of the Legal Market annual survey, we explore how law firms are responding to changes involving foreign firms being given the green light to enter India and set up shop by the Bar Council of India, and the integration of AI technology. In 2023, AI applications in legal services are slated to achieve enhanced reach and usage. The 70 law firms surveyed also revealed a dual trend of fragmentation and consolidation among law firms.

Foreign firms entering the Indian market garnered a mixed response, while lawyers surmised that hiring and retaining legal talent in the face of foreign competition would emerge as a challenge. The legal market also witnessed the rise of mid-sized firms offering expertise at lower prices, which is expected to be a game changer. These firms are typically headed by former senior partners at established firms, and have found the favour of clients.