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Government tax relief could open the door for Idea to find fresh funding
Vodafone Idea could finally be primed for ‘revival’ following the government’s adjusted gross revenue (AGR) relief, according to chairman of Aditya Birla Group, Kumar Mangalam Birla.
Aditya Birla Group currently owns a roughly 9.5% stake in Vodafone Idea.
“For the first time in years, the fog has cleared, allowing the business to look beyond survival and focus on sustainable growth,” wrote Birla in a recently published ‘Annual Reflections’ note.
“A healthy, competitive telecom industry is essential to India’s digital future. India deserves 3 private telecom players. India deserves a successful Vodafone Idea. And this is, once again, an idea whose time has come,” he added.
On December 31, 2025, the Indian government announced that it had frozen Vodafone Idea’s adjusted gross revenue (AGR) dues at ₹87,695 crore (~$9.5 billion), following a ruling by the Supreme Court.
The decision means Idea must repay repay just ₹124 crore (~$135 million) per year for the next six years, with further repayments then staggered until 2042.
The government is also reviewing the total owed by Idea, suggesting it could yet be reduced.
The decision not only has huge implications for Idea’s long-term survival, but also for its immediate cash flow, removing a ₹16,400 crore (~$1.78 billion) payment previously due in March 2026.
Vodafone Idea has been struggling to compete under the weight of AGR repayments since they were first announced in 2019. At that time, revised taxes meant the players across the telecoms sector owed roughly a combined $11 billion combined, with Vodafone Idea’s debt the lion’s share.
India’s largest telco, Reliance Jio – then still a relative newcomer to the market – paid off its AGR dues quickly, leaving Idea and rival Bharti Airtel to begin a years-long saga to have the debt reassessed and deferred.
Airtel continued to grow in the years that followed, but Idea was essentially crippled, seeing revenue slide and a steady decline in subscribers as it struggled with cash flow. It also notably hindered the company’s 5G launch; Idea launched 5G in 2025, roughly three years after Reliance Jio and Bharti Airtel.
Finally, last year, after years of Idea failing to find additional funding to pay its debts, the Indian government converted a portion of its debt into equity, becoming Vodafone Idea’s largest stakeholder.
Now, with long-term tax relief secured and the immediate liquidity crisis over, Idea may finally be able to seek fresh external investment and plot a path to sustainable growth.
Naturally, this is great news for Idea – and arguably the competitiveness of the Indian telecoms sector at large. However, Idea’s rivals, Bharti Airtel and Tata Group, are frustrated, arguing that they too should receive equitable debt relief from the government. They have even threatened not to pay the latest tranche of repayments.
Their please appear to be falling on deaf ears, however, with Communications Minister Jyotiraditya Scindia saying the companies must first receive a directive from the Supreme Court and should not approach the government directly.
Airtel and Tata owe around ₹48,103 crore ($5.24 billion) and ₹19,259 crore ($2.1 billion), respectively, with repayments due in March.
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