 Morning Dispatch |
IT rules could get tougher; Rubrik’s big India play
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Happy Wednesday! Experts have raised concerns over the proposed amendments to the IT rules. This and more in today’s ETtech Morning Dispatch.
Also in the letter:
■ A look at funding trends in FY26
■ Zetwerk files for IPO
■ ETtech Done Deals
Proposed tweaks to India’s information technology rules could sharply push up compliance costs for intermediaries and give the government more influence over what stays online, experts told us.
Driving the debate: Policy experts, lawyers and digital rights groups lit up after the electronics and information technology ministry quietly released draft changes to the IT Rules 2021, with just a two-week window for public comments.
The draft would not just ask platforms to follow notified rules. It would also pull in a wider stack of ministry documents – advisories, clarifications, SOPs and guidelines – and expect platforms to fall in line.
“In practice, that means platforms may need to respond to a wider and evolving set of executive documents,” Kazim Rizvi, founding director at think tank The Dialogue.
Yes, and: The amendments also stretch Part III of the rules – originally framed for digital news publishers – to include certain user-generated “news and current affairs content”.
This could bring creators, citizen journalists, and commentators into a tighter, more formal regulatory net, widening the scope for takedown, edit, or blocking requests.
Also Read: MeitY moves to regulate online user-posted news
The Internet and Mobile Association of India (IAMAI) has called the National Human Rights Commission’s notice on AI platforms and children’s data a case of “significant legal and jurisdictional” overreach.
What IAMAI says: In a March 30 letter to MeitY, the industry body said the intervention is premature because key provisions of the DPDP Act relating to children’s data are not yet in force.
“Without affording the legally mandated time for compliance, such interventions are an infructuous exercise,” the industry body said.
Tell me more: IAMAI also took aim at the report’s methodology, saying it relied only on publicly available policies and did not consult the companies it assessed.
Also Read: Firms flag data verification, compliance costs as major challenge under DPDP regime
Arvind Nithrakashyap, CTO, Rubrik
Palo Alto-headquartered cybersecurity firm Rubrik is working with the Indian government to strengthen cyber resilience for large-scale citizen data systems, especially in sensitive sectors such as healthcare.
India focus: India may be a small revenue market today, but it is a key talent hub for Rubrik, cofounder and chief technology officer (CTO) Arvind Nithrakashyap told us. About one-third of the company’s 3,500 global employees are based here.
About the company:
Bottom line: As AI adoption accelerates, Rubrik is betting that “recovery, not just protection” will shape the next phase of cybersecurity spending.
AI takes centre stage: Indian startups raised $10.1 billion across 977 deals in FY26, down 9% from $11.3 billion last year. Deal activity cooled a touch, while investor focus tightened around high-conviction themes – with AI at the top of the list.
Market pulse: Funding held steady through the first three quarters at around $2.4-$2.6 billion before slipping to $2.2 billion in Q4 amid global jitters. Q4 funding fell 22.7% year-on-year, signalling more cautious late-stage capital.
AI-first shift: AI-led startups commanded investor attention, both as standalone bets and as rails for fintech, cybersecurity, customer service, and more. Backers increasingly favoured companies that build AI into the core product to lift efficiency and unlock new use cases.
Early vs growth: Early-stage saw 589 deals with nearly $3 billion in funding, fuelled by new company formation and experimentation. Growth stage drew $7 billion across 388 deals, pointing to larger cheques even as transaction counts fell.
Unified Payments Interface (UPI) wrapped up another blockbuster year. The real-time payments rail processed 218.6 billion transactions in the fiscal year ended March 2026, with a cumulative value of Rs 284.7 lakh crore, per fresh data from the National Payments Corporation of India.
Tell me more: Volumes stayed stubbornly high through the year, crossing the 20 billion transactions in several months, even as growth began to cool at the margin in the latter part of the year.
(L-R) Srinath Ramakkrushnan and Amrit Acharya, cofounders, Zetwerk
Zetwerk files for IPO confidentially: Business-to-business (B2B) manufacturing platform Zetwerk has quietly kicked off its public-market journey. The company has filed draft papers for its IPO via the confidential route with the Securities and Exchange Board of India (Sebi).
OpenFX raises funds: US-headquartered cross-border payments infrastructure startup OpenFX has secured $94 million (Rs 780 crore) in a funding round led by Accel and Atomico. The round also saw participation from Lightspeed, Faction VC, M13, Northzone, and Pantera.
Bachatt bags $12 million: Savings and wealth management startup Bachatt has secured $12 million in a fresh funding round led by early-stage venture firm Accel. In a statement, the company said that the funds will be used to scale up its platform and build wealth and credit solutions for its users.
Ather Energy rolls out Esops: Electric two-wheeler maker Ather Energy has allotted 2.97 lakh equity shares to employees under its Employee Stock Ownership Plan (Esop) 2025 plan, following the exercise of stock options, according to a regulatory filing.
■ Iran’s hackers go to war (FT)
■ Workers around the world are not getting what they want from AI (Rest of World)
■ There are more AI health tools than ever—but how well do they work? (MIT Technology Review)
Also in the letter:
■ A look at funding trends in FY26
■ Zetwerk files for IPO
■ ETtech Done Deals
Draft IT rule tweaks set off alarms over state powers & costs
Proposed tweaks to India’s information technology rules could sharply push up compliance costs for intermediaries and give the government more influence over what stays online, experts told us.
Driving the debate: Policy experts, lawyers and digital rights groups lit up after the electronics and information technology ministry quietly released draft changes to the IT Rules 2021, with just a two-week window for public comments.
The draft would not just ask platforms to follow notified rules. It would also pull in a wider stack of ministry documents – advisories, clarifications, SOPs and guidelines – and expect platforms to fall in line.
“In practice, that means platforms may need to respond to a wider and evolving set of executive documents,” Kazim Rizvi, founding director at think tank The Dialogue.
Yes, and: The amendments also stretch Part III of the rules – originally framed for digital news publishers – to include certain user-generated “news and current affairs content”.
This could bring creators, citizen journalists, and commentators into a tighter, more formal regulatory net, widening the scope for takedown, edit, or blocking requests.
Also Read: MeitY moves to regulate online user-posted news
IAMAI sees ‘overreach’ in NHRC’s notice to MeitY over AI companies' DPDP breaches
The Internet and Mobile Association of India (IAMAI) has called the National Human Rights Commission’s notice on AI platforms and children’s data a case of “significant legal and jurisdictional” overreach.
What IAMAI says: In a March 30 letter to MeitY, the industry body said the intervention is premature because key provisions of the DPDP Act relating to children’s data are not yet in force.
“Without affording the legally mandated time for compliance, such interventions are an infructuous exercise,” the industry body said.
Tell me more: IAMAI also took aim at the report’s methodology, saying it relied only on publicly available policies and did not consult the companies it assessed.
Also Read: Firms flag data verification, compliance costs as major challenge under DPDP regime
Cyber resilience turns a boardroom priority: Rubrik CTO
Palo Alto-headquartered cybersecurity firm Rubrik is working with the Indian government to strengthen cyber resilience for large-scale citizen data systems, especially in sensitive sectors such as healthcare.
India focus: India may be a small revenue market today, but it is a key talent hub for Rubrik, cofounder and chief technology officer (CTO) Arvind Nithrakashyap told us. About one-third of the company’s 3,500 global employees are based here.
About the company:
- Rubrik entered India in 2017 and is hiring across engineering, product and design.
- Adoption is growing, but deep cost sensitivity remains a key challenge, Nithrakashyap says.
- It competes with players such as CrowdStrike, Cohesity, Veeam and Commvault.
- It reported $1.32 billion in FY26 revenue, driven by subscription growth and is valued at over $9 billion
Bottom line: As AI adoption accelerates, Rubrik is betting that “recovery, not just protection” will shape the next phase of cybersecurity spending.
AI looming large as Indian startups rack up $10 billion in FY26
AI takes centre stage: Indian startups raised $10.1 billion across 977 deals in FY26, down 9% from $11.3 billion last year. Deal activity cooled a touch, while investor focus tightened around high-conviction themes – with AI at the top of the list.
Market pulse: Funding held steady through the first three quarters at around $2.4-$2.6 billion before slipping to $2.2 billion in Q4 amid global jitters. Q4 funding fell 22.7% year-on-year, signalling more cautious late-stage capital.
AI-first shift: AI-led startups commanded investor attention, both as standalone bets and as rails for fintech, cybersecurity, customer service, and more. Backers increasingly favoured companies that build AI into the core product to lift efficiency and unlock new use cases.
Early vs growth: Early-stage saw 589 deals with nearly $3 billion in funding, fuelled by new company formation and experimentation. Growth stage drew $7 billion across 388 deals, pointing to larger cheques even as transaction counts fell.
UPI processes 218.6 billion transactions till February in FY26; value at Rs 285 lakh crore
Unified Payments Interface (UPI) wrapped up another blockbuster year. The real-time payments rail processed 218.6 billion transactions in the fiscal year ended March 2026, with a cumulative value of Rs 284.7 lakh crore, per fresh data from the National Payments Corporation of India.
Tell me more: Volumes stayed stubbornly high through the year, crossing the 20 billion transactions in several months, even as growth began to cool at the margin in the latter part of the year.
Other Top Stories By Our Reporters
Zetwerk files for IPO confidentially: Business-to-business (B2B) manufacturing platform Zetwerk has quietly kicked off its public-market journey. The company has filed draft papers for its IPO via the confidential route with the Securities and Exchange Board of India (Sebi).
OpenFX raises funds: US-headquartered cross-border payments infrastructure startup OpenFX has secured $94 million (Rs 780 crore) in a funding round led by Accel and Atomico. The round also saw participation from Lightspeed, Faction VC, M13, Northzone, and Pantera.
Bachatt bags $12 million: Savings and wealth management startup Bachatt has secured $12 million in a fresh funding round led by early-stage venture firm Accel. In a statement, the company said that the funds will be used to scale up its platform and build wealth and credit solutions for its users.
Ather Energy rolls out Esops: Electric two-wheeler maker Ather Energy has allotted 2.97 lakh equity shares to employees under its Employee Stock Ownership Plan (Esop) 2025 plan, following the exercise of stock options, according to a regulatory filing.
Global Picks We Are Reading
■ Iran’s hackers go to war (FT)
■ Workers around the world are not getting what they want from AI (Rest of World)
■ There are more AI health tools than ever—but how well do they work? (MIT Technology Review)
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