The Union Cabinet has approved a fresh relief package for Vodafone Idea.
The company has been granted a new five-year moratorium on about ₹87,695 crore in adjusted gross revenue (AGR) dues.
The Cabinet has also agreed to freeze AGR payments, pushing the repayment window to between FY32 and FY41.
Union Cabinet on Wednesday reportedly approved a new relief package for Vodafone Idea related to its adjusted gross revenue (AGR) obligations. As part of the decision taken on December 31, the government has cleared a five-year moratorium on the telecom operator’s about ₹87,695 crore in AGR payments.
According to a PTI report, the Cabinet has agreed to freeze AGR dues, with repayments now pushed back to the period between FY32 and FY41. Separately, outstanding AGR liabilities for FY18 and FY19 will be cleared by the company over the next five years.
1 December 2025
Get the latest issue of Outlook Business
As per the earlier schedule, the Aditya Birla Group-owned company was mandated to start paying its dues from March 2026 in 10 equal instalments.
A CNBC-TV18 report also claimed that the frozen dues could be recalculated by the Department of Telecommunications (DoT) following audit reviews.
The decision comes after the Supreme Court permitted the government to carry out a comprehensive reassessment and reconciliation of all dues owed by the operator, including interest and penalties, up to FY17.
This ruling was widely viewed as a significant relief for the debt-burdened telecom firm. The ruling came in a case filed by the company, which had claimed that the DoT had raised an additional AGR demand of ₹9,450 crore in 2025, in addition to over ₹87,000 crore in dues owed earlier.
Vodafone Idea had approached the court contending that a large portion of the claim related to the pre-FY17 period that had already been settled by the Supreme Court in 2020. Of the ₹9,450 crore amount, ₹2,774 crore is linked to post-merger liabilities, while ₹5,675 crore relates to pre-merger dues of the Vodafone Group.
The latest round of relief comes after two earlier packages from the Centre. The Union government became Vodafone Idea’s largest shareholder in March after converting ₹36,950 crore of dues into equity, raising its holding to nearly 49%. Earlier, in 2023, the government had acquired a 33% stake by converting statutory dues of more than ₹16,000 crore into equity.
Shares of the telecom operator, which started trading with about a 3% gain today, were down about 10% on the BSE at 2.47 pm.
Vodafone Idea continues to face severe financial pressure and has repeatedly cautioned that its survival depends on fresh funding, as lenders remain reluctant due to its strained balance sheet. The company has a workforce of over 18,000 employees and a subscriber base of nearly 198 million.
