JSA Prism | Telecommunications | October 2026

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Telecommunications (Regulatory Sandbox) Rules, 2026

On October 21, 2026, the Department of Telecommunications notified the Telecommunications (Regulatory Sandbox) Rules, 2026 (“Sandbox Rules”) under the Telecommunications Act, 2023 (“Telecom Act”). The Sandbox Rules establish a regulatory framework for the creation and operation of regulatory sandboxes in the telecommunications sector to facilitate innovation, technological development and controlled testing of new telecommunications services, networks, technologies, products, processes and business models. The Sandbox Rules enable the Central Government to grant time-bound exemptions from specified regulatory requirements under the Telecom Act and certain related regulatory frameworks, allowing innovative solutions to be tested in a controlled environment prior to commercial deployment, while maintaining appropriate oversight through governance, reporting, consumer protection and risk management requirements.

Key provisions under the Sandbox Rules

Overview and scope

• The Sandbox Rules provide for 1 (one) or more regulatory sandboxes to promote innovation and accelerate the development of emerging telecommunications technologies and business models in a supervised environment with regulatory flexibility.
• Sandboxes may be established by the Central Government on its own initiative or on proposals from eligible applicants.
• Services, networks, equipment, processes, technologies, products and business models may be tested in a controlled environment before commercial deployment.

Eligibility and application framework

• Eligible applicants include authorised entities, companies, societies, partnership firms and statutory bodies incorporated in India, recognised research and development institutions and Indian citizens, enabling participation by start-ups, innovators and technology developers.
• Proposals must be submitted through the designated portal, with reports of any prior laboratory, offline or experimental network testing and any other prescribed information.
• Applicants may seek exemptions from authorisation, assignment or other requirements under the Telecom Act, its rules or the Telecom Regulatory Authority of India Act, 1997 (“TRAI Act”), where necessary for testing.
• Each proposal requires a non-refundable processing fee of INR 10,000 (Indian Rupees ten thousand) and is subject to eligibility review and Central Government approval.

Sandbox structure and regulatory relaxations

• The Central Government may prescribe terms and conditions for each sandbox covering its objectives, scope (including the services, networks, equipment, technologies, products, processes or business models to be tested), participating entities, governance, reporting and risk management.
• A key feature is the Central Government’s power to grant temporary, time-bound exemptions from specified requirements under the Telecom Act, its rules and, where applicable, the TRAI Act, subject to prior consultation with TRAI where required.
• Sandbox operators must establish risk analysis and mitigation mechanisms addressing regulatory, operational and consumer protection concerns.

Duration and continuation of sandbox operations

• A sandbox’s validity cannot exceed 24 (twenty-four) months.
• The Central Government may extend validity by up to 12 (twelve) months at a time, on a justified request made at least 30 (thirty) days before expiry or based on a continuation assessment.
• After reviewing outcomes, the Central Government may permit continuation on modified terms, direct closure or allow progression towards commercial deployment in accordance with applicable law.

Obligations of approved applicants

• Approved applicants operate and manage sandboxes and must comply with all prescribed terms and conditions.
• They must establish mechanisms for onboarding participants, monitoring participant compliance, specifying testing parameters and maintaining testing records.
• They must ensure data protection, data security and legal compliance in onboarding and managing test users.
• Test users must be informed of the purpose and scope of testing, give prior consent and not be charged for participation.
• Offerings under test must not be commercially available during the testing period.

Record keeping, data management and confidentiality

• Approved applicants must retain testing records, including work plans, methodologies, participant information and user consent records, for at least 1 (one) year after the sandbox expires (or longer if specified), and thereafter destroy them securely.
• Approved applicants must indemnify the Central Government against liabilities, losses or claims arising from sandbox testing.
• Strict confidentiality applies to the testing process and outcomes, though the Central Government may publish generic, non-proprietary information on sandboxes and participants.

Monitoring, reporting and Government oversight

• The Central Government may monitor and evaluate any sandbox, with the assistance of external experts, and require reports, data or records in the prescribed format, frequency and manner.
• Approved applicants must provide physical or virtual access to sandbox environments and comply with government directions.
• Within 15 (fifteen) days of completing testing, or at least 30 (thirty) days before expiry, approved applicants must submit a report on outcomes, user feedback, security issues, challenges, mitigation measures and settlement of contractual and financial obligations.

Commercialisation and market deployment

Based on testing results, the Central Government may facilitate commercial deployment of a tested offering, subject to the Telecom Act and its rules, creating a structured pathway from testing to commercial implementation.

Suspension, revocation and enforcement

• The Central Government may suspend or revoke approval where the sandbox interferes with authorised networks, false information is furnished, conditions are breached or participants fail to comply, or where required for national security or public interest, or following adjudication of violations under the Telecom Act.
• Approved applicants must be heard before suspension or revocation on specified compliance-related grounds.
• No fees or charges are refunded on suspension, curtailment, revocation or modification of approval.

Conclusion

The Sandbox Rules are a significant step towards an innovation-oriented framework under the Telecom Act, lowering barriers to experimentation and easing the transition to commercial deployment through time-bound exemptions, while preserving safeguards on consumer protection, data security and regulatory oversight.

From an industry perspective, the Sandbox Rules are likely to be welcomed as a formal pathway for start-ups, research institutions, technology developers and telecom stakeholders to trial next-generation solutions without full regulatory compliance at the testing stage. However, participants must carefully assess the attendant obligations, including reporting, user consent, data management, record retention and ongoing governmental oversight.

This Prism has been prepared by:

Tony Verghese Partner

Radhika Gupta Partner

Uddhav Gupta Associate

For more details, please contact km@jsalaw.com.