India's Department of Telecommunications has notified the Telecommunications (Regulatory Sandbox) Rules, 2026 as G.S.R. 905(E). They took effect on 21 October 2026, the day they were published in the Gazette, according to MediaNama's reading of the notified text. The direction is right. The design is weaker than the draft it replaced.
The case for the government's approach
Start with the strongest argument for the rules as written. Telecom is critical infrastructure. A regulator that must pre-specify every term of every trial risks freezing out experiments nobody anticipated, and a government that can tailor each sandbox to its risks can move faster than a rigid statute. Confidentiality also has a legitimate purpose: a start-up testing a product that is not yet protected has real reasons not to publish results mid-trial. Flexibility, speed and commercial discretion are not defects.
That case is also consistent with how the idea began. India's sandbox plan did not come from nowhere. TRAI published its recommendations on regulatory sandboxes in the digital communication sector on 12 April 2024, after a 2023 consultation. MediaNama reports that during that consultation Bharti Airtel and Jio argued that existing mechanisms already permitted rigorous testing. A sandbox is only worth having if it enables trials the status quo does not. Waiving licensing and spectrum-assignment requirements does that.
What the notified rules actually do
According to MediaNama, a sandbox can run for up to 24 months. The government can extend it by up to 12 months at a time, on the applicant's request made at least 30 days before expiry, and the rules cap neither the number of extensions nor the total duration. The application fee is a non-refundable Rs 10,000, and the rules set no deadline for deciding an application.
The draft was tighter in three ways.
- Terms became optional. The November 2024 draft text was made under section 27 of the Telecommunications Act, 2023, and required each sandbox to specify its terms. MediaNama says the notified version says only that the government "may specify" them on the portal, where the draft said each sandbox "shall specify" scope, eligibility criteria, exemptions, validity and exit strategy.
- The oversight body vanished. The draft's Rule 7 had the government constitute one or more Governance Committees to monitor each sandbox. The applicant would file a report within fifteen days of finishing testing, or at least thirty days before expiry. The committee could recommend continuing, modifying or certifying the trial. MediaNama finds no equivalent body in the final rules.
- Exemptions got wider. The draft covered the Telecommunications Act and its rules. According to MediaNama, the final rules also allow exemptions from the TRAI Act, though only after consulting TRAI.
Where the design undermines its own goal
A sandbox is a bargain: the state relaxes rules, and in return the public gets controlled conditions, accountable testing and lessons that feed back into regulation. The notified rules keep the relaxation and thin out the rest.
First, confidentiality now runs one way. Participants must keep the sandbox, its testing and its results confidential. The government may publish generic information about sandboxes and participants, but nothing requires it to publish results or final reports. That blocks the main public benefit of a sandbox, which is learning. If a trial shows that a spectrum-sharing technique works or fails, other firms, TRAI and Parliament cannot see it. Compare the draft, which at least routed a comprehensive report to a standing committee.
Second, test users are real people. Members of the public whose connectivity or data is part of a trial have no complaint mechanism under the rules. Complaints surface only inside the applicant's own final report, which must include user feedback. The government may issue protective directions to participants, but the rules do not say how or when. Users in a sandbox have been told that regulation is relaxed. Giving them no formal route to complain compounds that.
Third, unlimited 12-month extensions blur the line between a trial and a permanent exemption. A limited group of users is the sandbox's safety valve. If a trial can be renewed indefinitely, a company can operate a de facto unlicensed service while competitors pay for licences and spectrum. That is a competition problem as well as a safety one. It is also the type of discretionary power that invites favouritism, because the rules set no decision deadline and require no published reasons.
Fourth, the grounds for ending a sandbox are broad. According to MediaNama, Rule 9 lets the government suspend or revoke for interference with a licensed network, non-compliance, national security or public interest. A hearing is provided only for non-compliance, and fees are not refunded. Applicants must also indemnify the central government. Founders will weigh that exposure against a Rs 10,000 fee and a confidential trial, and the discretionary risk falls hardest on small firms that lack lobbying capacity.
A better version is easy to describe
None of this requires abandoning the sandbox. Proportionate fixes would keep its speed:
- Publish a short summary of every completed trial, with proprietary details redacted. The rules already let the government publish generic information, so the step is small.
- Set a cap on total duration or require a published justification for any second extension.
- Create a user-complaint channel with a named officer and a time limit.
- Restore an independent oversight body, or at least require TRAI to receive trial reports when the TRAI Act is waived.
- Set a decision deadline for applications. TRAI's April 2024 package, as MediaNama summarised it, included a 30-day suitability view and a 45-day evaluation stage, plus a post-testing report within 30 days.
The pro-innovation position is not that rules should be as loose as possible. Innovation depends on trust: that the licence-holders who pay for spectrum are not undercut by indefinite exemptions, and that users will not be harmed. Sandboxes in other sectors earn legitimacy by publishing what they learn. India's telecom sandbox has the powers. It now needs the accountability to match.