Explained: What is the Indian Club Licensing System?

On May 15, 2025, the All India Football Federation (AIFF) announced that in its annual club licensing review, several top-tier clubs, including Kerala Blasters FC, Hyderabad FC, and Odisha FC, failed to meet the requirements to obtain a club license for the 2025–26 season.

While Punjab FC became the only club to receive the ICLS Premier 1 License without any sanctions, other major clubs were either given conditional approvals with sanctions or were outright denied.

This has raised serious questions among fans and stakeholders: What exactly is the Indian Club Licensing System, and why does it matter so much?

Let’s break it down.

What is the Indian Club Licensing System (ICLS)?

The Indian Club Licensing System (ICLS) is a regulatory framework developed by the AIFF, aligned with the standards set by the Asian Football Confederation (AFC).

It is designed to ensure that football clubs participating in national and continental competitions operate in a professional, sustainable, and legally compliant manner. Simply put, they are a set of minimum requirements that clubs need to meet in order to be eligible for competition, regardless of how well they perform on the field.

Licensing is mandatory for participation in leagues such as the Indian Super League and the I-League, and for Indian clubs wishing to compete in continental tournaments like the AFC Champions League or AFC Cup.

Without a valid license, clubs are barred from competing, irrespective of their popularity or past performances.

Club licensing plays a critical role in ensuring the overall health of Indian football. It acts as a quality check, aimed at preventing the sort of mismanagement and instability that has plagued clubs in the past.

Teams like FC Pune City and Delhi Dynamos are cautionary tales of how a lack of structure and oversight can lead to rebranding, relocation, or complete shutdowns.

Through licensing, the AIFF aims to foster a football ecosystem that is financially sustainable, administratively competent, and committed to the development of players, coaches, infrastructure, and fan engagement.

How does the licensing system work?

Every year, clubs must apply for one of two licenses: the ICLS Premier 1 License, which is required to play in the ISL and represent India in AFC competitions, or the ICLS Premier 2 License, which applies to clubs in the I-League and lower divisions.

Once an application is submitted, an independent Club Licensing Committee appointed by the AIFF evaluates the club across five broad criteria: sporting, infrastructure, administrative, legal, and financial.

The process is rigorous and data-driven. Clubs must submit documentation, undergo audits, and demonstrate their compliance on multiple fronts — from having youth teams to showing audited balance sheets.

The five pillars of club licensing

The sporting criteria require clubs to have structured youth development programs, including teams in multiple age categories such as U13, U15, and U18. Participation in grassroots development, women's football, and coaching education is also evaluated, as is the presence of properly licensed technical staff.

The infrastructure criteria assess whether clubs have access to stadiums and training facilities that meet AIFF and AFC standards. This includes having functional floodlights, medical rooms, safe seating, media zones, and proper locker rooms. A lack of stadium readiness has been a common stumbling block for many Indian clubs.

Under the personnel and administrative criteria, clubs must appoint full-time qualified staff for key roles such as CEO, head coach, physiotherapist, team doctor, finance officer, and media manager. Each appointment must meet defined qualification standards and must be documented officially.

The legal criteria ensures that clubs are registered legal entities with transparent ownership structures. All contractual relationships with players, staff, and sponsors must be formal and compliant with local laws.

The financial criteria are perhaps the most stringent. Clubs must submit audited financial statements, prove there are no overdue payments to players, staff, or other entities, and demonstrate that they are financially viable to operate in the upcoming season.

Each of these requirements is categorized as A, B, or C criteria, where A is mandatory, B is mandatory with possible sanctions, and C is best practice. Failure to meet A-level requirements results in an automatic denial of the license.

Why did Kerala Blasters, Hyderabad FC, and Odisha FC fail?

According to the AIFF's statement on May 15, these three clubs failed to meet multiple mandatory licensing criteria.

While the exact details have not been made public, sources suggest that Hyderabad FC’s well-documented financial issues, including unpaid salaries and instability in ownership, contributed significantly to their denial.

Kerala Blasters, on the other hand, are believed to have fallen short in infrastructure readiness — a recurring problem related to safety clearances at the Jawaharlal Nehru Stadium in Kochi.

Odisha FC’s reasons remain unclear, but delays in documentation and gaps in administrative or personnel roles may have played a part. Notably, Hyderabad FC’s participation in the next ISL season is under serious question unless they fix these issues during the appeal window.

In the case of Odisha FC, club president Rohan Sharma took to social media to explain their situation. He revealed that the club was aware in advance that they might not pass the licensing process this season. The reason, he said, was the unavailability of official documentation from the Odisha state government granting access to the Kalinga Stadium and the practice grounds.

"I was aware that we were going to fail club licensing this season. Unfortunately, we have no letter from the Government granting us access to the stadium and practice ground this season," Sharma tweeted. "Despite multiple requests both in person and letters to have a meeting to discuss the MoU, no one from the government has acknowledged or granted a meeting. I have personally went to Delhi to speak to very senior ministers to get this resolved... still nothing."

Sharma added, "It feels like the government doesn't want us in Odisha, which is quite sad. We have tried to be as polite."

This lack of formal backing from the local government has left Odisha FC unable to fulfill some of the 'infrastructure' criteria under the AIFF's licensing regulations, one of the five core areas in which clubs are assessed.

What happens next?

The licensing process does not end with the initial announcement. Clubs that failed to obtain a license under the ICLS Premier 1 category are now eligible to apply for an exemption—a provision that allows them to participate in the upcoming season under certain conditions, provided they demonstrate a clear plan to meet the criteria they failed.

However, this comes with significant pressure. Clubs that do not regularize their licensing status through exemption or appeal could face exclusion from national competitions like the Indian Super League and the I-League.

Given the stature of clubs like Kerala Blasters and Odisha FC, it is likely they will pursue all available routes to resolve the issue.

An interesting development around Hyderabad FC is their proposed relocation to Delhi.

Should that move transpire, yet another layer of complexity would be added to their licensing situation. Moving cities would mean securing new stadium agreements, practice facilities, and local administrative clearances — all crucial factors for club licensing approval.

But the fact that top-tier teams are in this situation at all in the first place highlights both the growing emphasis on compliance in Indian football and the fragile institutional structures that still exist behind the scenes.