For Indian businesses, especially micro, small, and medium enterprises (MSMEs), the compliance challenge is increasingly moving beyond filing returns and renewing licences. However, a deeper problem lies in the architecture of regulation itself, with thousands of obligations spread across central, state, and local authorities, as per TeamLease RegTech, a leading digital compliance and regulatory technology firm.
Currently, Indian firms navigate more than 1,530 Acts and Rules and over 69,000 compliance obligations to operate in the country. Additionally, they also deal with around 13,000 changes every year across nearly 3,750 government websites due to regulatory changes, according to TeamLease RegTech.
The scale and fragmentation of these obligations make non-compliance difficult to detect even in organisations that have established compliance teams and monitoring systems, says Rishi Agrawal, Co-founder & CEO, TeamLease RegTech,
Speaking to the Economic Times Digital about the company’s recent pan-India compliance assessment, Agrawal says, “Thousands of obligations, multiple laws, endless filings, licences, registers, inspections, and deadlines make it easy to assume that everything is under control. But hope is not a strategy, and ignorance is not a solution. The real problem is that non-compliance is often invisible.”
This notion of invisibility Agarwal referred to becomes more significant as companies expand across locations. Unlike financial compliance, where payments and returns can largely be monitored centrally, TeamLease’s assessment flags that many business regulations are location-specific. A manufacturing company can simultaneously face central legislation, state rules, pollution-control requirements, municipal regulations, and factory-level conditions.
What is compliant at a plant in Maharashtra may not necessarily satisfy requirements at another facility in Tamil Nadu without a fresh applicability assessment, according to Agrawal. Regulators also enforce locally, making a national compliance dashboard an imperfect measure of what is happening at individual plants and warehouses, he adds.
TeamLease’s assessment also highlights another layer of complexity: India’s compliance framework has evolved over different periods rather than emerging as one integrated regulatory architecture.
According to TeamLease, businesses today operate under a mix of decades-old statutes and newer regulatory regimes. Companies can simultaneously encounter statutes such as the Indian Contract Act, 1872, the Drugs and Cosmetics Act, 1940, and the Factories Act, 1948, while adapting to newer regulatory regimes covering data protection, environmental responsibility, and digital disclosures.
The consequences of this layered framework extend beyond the administrative cost of tracking more rules, as per TeamLease. Some provisions can expose senior management to ramifications extending beyond monetary penalties, turning an operational or procedural lapse into a governance issue.
TeamLease’s assessment points out that over 26,000 statutory clauses contain imprisonment provisions. Around 68% are under labour laws, while nearly 80% of such provisions reside in state-level legislation. “An inspection, notice or incident can suddenly lead to financial loss, operational disruption, reputational damage and sometimes even personal liability for management. Today, boards and leadership teams cannot afford to look away. They are expected to know what is happening on the ground, not just what appears in reports,” Agrawal says.
Notably, the government has undertaken a broader effort to decriminalise business laws and remove outdated requirements. The Jan Vishwas (Amendment of Provisions) Act, 2026, decriminalised 717 provisions and amended 784 provisions across 79 Central Acts administered by 23 ministries. This followed the Jan Vishwas Act of 2023, which decriminalised 183 provisions across 42 Central Acts.
