Pre-Packaged Insolvency Resolution in India after the IBC Amendment Act 2026: A Critical Assessment of the Revised MSME Framework

The Insolvency and Bankruptcy Code, 2016, provides a consolidated and time-bound framework for insolvency resolution, liquidation, and bankruptcy, with emphasis on value maximization and continuation of viable businesses. The introduction of the Pre-Packaged Insolvency Resolution Process (PPIRP) in 2021 created a faster and less disruptive mechanism for resolving the financial distress of eligible micro, small, and medium enterprises. The IBC Amendment Act, 2026, has revised several provisions governing PPIRP and has also provided for a new Creditor-Initiated Insolvency Resolution Process (CIIRP). While the PPIRP amendments have substantially come into force, the provisions introducing CIIRP have been enacted but have not yet been operationalised. PPIRP combines pre-initiation negotiations with formal creditor approval and judicial supervision. It seeks to preserve the corporate debtor as a going concern, protect employment, reduce costs, and maximize creditor recovery. However, the process also raises concerns regarding transparency, valuation, promoter control, creditor participation, and conflicts of interest. This paper critically examines the Indian PPIRP framework, its advantages and limitations, and the changes introduced by the IBC Amendment Act, 2026. It argues that PPIRP can serve as an effective instrument of corporate rescue if supported by transparent procedures, independent monitoring, and adequate protection of stakeholder interests.