The rules have been released under Section 27 of the Telecommunications Act, 2023, which allows the government to create regulatory sandboxes to promote innovation in telecommunication. Section 27 came into effect on June 26.
A regulatory sandbox lets entities test products on a limited set of users for a specified period.
"The sandbox regime is common in the banking industry and supported by the Reserve Bank of India," Aprajita Rana, partner at AZB & Partners, said. "Given the high cost of launching telecom technology, a trial period will help in anticipating success and/or necessary compliance preparation."
The central government can set up a sandbox either based on its assessment or on receiving a proposal from an applicant.
Applicants must pay Rs10,000 while submitting proposals. The government must give reasons if it rejects a proposal.
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