India’s insolvency laws have moved from a complex, debtor-friendly system to a simpler, creditor-focused approach with the Insolvency and Bankruptcy Code (IBC). The 2026 Amendment Act builds on the 2016 IBC to fix problems like delays and misuse, aiming for quicker and more effective resolutions.

The Old Insolvency Regime

Given the increased intertwining of national economies, cross-border insolvency presents salient legal and financial difficulty. Upon the existence of an insolvent debtor in more than one country, the necessity to deal with assets and/or creditors creates very complicated jurisdictional problems and other legal issues. Most of the time, a company will operate in several jurisdictions and hence face very complicated transnational insolvency scenarios.

The Insolvency and Bankruptcy Code, 2016 (IBC) governs insolvency proceedings for individuals and partnership firms in India. This comprehensive legislation consolidates and amends laws pertaining to the reorganization and insolvency resolution of corporate persons, partnership firms, and individuals.