Modernising Merger Regulation in India: Assessing the Impact of Recent Competition Law Reforms

Posted On - 2 May, 2026 • By - Aniket Ghosh

Introduction

India’s merger control regime is governed by the Competition Act, 2002, which regulates combinations (mergers, acquisitions, and amalgamations) that may cause an appreciable adverse effect on competition (AAEC).

In recent years, the framework has undergone significant reform, primarily through the Competition (Amendment) Act, 2023, followed by the Competition Commission of India (CCI) Regulations, 2024. These reforms reflect India’s effort to align with global best practices and address emerging challenges particularly in the digital and technology sectors, where traditional asset- and turnover-based thresholds proved inadequate.

Key developments include:

  • Introduction of the Deal Value Threshold (DVT)
  • Expanded and clarified concept of “control” (material influence)
  • Revised exemption rules
  • Streamlined approval timelines
  • Introduction of flexibility for open market transactions

Together, these changes mark a transition towards a more nuanced, transaction-sensitive, and forward-looking merger control regime.1

Introduction of Deal Value Threshold (DVT)

Historically, merger notification in India was triggered by asset and turnover thresholds. However, this approach failed to capture high-value acquisitions of companies with low current revenues but significant competitive potential (e.g., digital platforms and start-ups).

To address this gap, the reforms introduced a Deal Value Threshold, requiring notification where:

  • The transaction value exceeds INR 2,000 crore, and2
  • The target enterprise has “substantial business operations in India” (SBOI)

This aligns India with jurisdictions such as Germany and Austria, which have adopted similar transaction-value thresholds.

Importantly:

  • The de minimis exemption does not override the DVT where the threshold conditions are met
  • The focus shifts from current size to strategic market significance

Determination of “Deal Value”

The concept of “deal value” has been clarified to include all forms of consideration, whether:

  • Direct or indirect
  • Immediate or deferred
  • Cash or non-cash

This includes:

  • Upfront payments
  • Deferred consideration (earn-outs)
  • Non-compete fees
  • Licensing arrangements
  • Technology transfers and other commercial arrangements linked to the transaction

Where transaction documents do not specify a precise value, parties are required to provide a reasonable and documented estimate, subject to scrutiny by the CCI.

Substantial Business Operations in India (SBOI)

For DVT applicability, the target must have a sufficient nexus with India.

Under the Competition Commission of India (Combinations) Regulations, 2024, SBOI is assessed through criteria such as:

  • Turnover or gross merchandise value (GMV) attributable to India
  • User base in India (particularly for digital businesses)
  • Other indicators of economic presence

The thresholds are designed to ensure that only transactions with material competitive impact in India are subject to review.

Expanded Concept of “Control”

The concept of “control” is central to merger regulation.Traditionally, the CCI relied on the standard of “decisive influence.” However, judicial and regulatory practice has evolved towards a broader concept of “material influence.”

The 2023 amendment codifies this position by defining control to include the ability to materially influence management, policy decisions, or strategic commercial behaviour. This broader test captures:

  • Minority shareholdings with governance rights
  • Board representation
  • Veto rights over key decisions

As a result, a wider range of transactions now fall within the scope of merger control.

Exemptions and Their Narrowing

The Competition (Criteria for Exemption of Combinations) Rules, 2024 refine existing exemptions. While certain transactions remain exempt such as:

  • Ordinary course acquisitions
  • Minority investments below specified thresholds
  • Intra-group restructurings

The scope of exemptions has been narrowed where:

  • There is access to commercially sensitive information (CSI)
  • The acquirer obtains board or governance rights
  • There is horizontal or vertical overlap

This reflects a shift towards substance over form, ensuring that competitively significant transactions are not excluded.

Commercially Sensitive Information (CSI)

The reforms and CCI guidance clarify what constitutes commercially sensitive information, including:

  • Pricing strategies and cost structures
  • Market share and sales data
  • Production capacity
  • R&D activities
  • Business plans and strategic initiatives

Conversely, information such as:

  • Publicly available data
  • General corporate information
  • Audited financial statements

is typically not treated as CSI.

This distinction is critical in assessing:

  • Gun-jumping risks
  • Information exchange during due diligence

Inter-Connected Transactions

The CCI has clarified that multiple transactions may be treated as inter-connected where they are:

  • Structurally linked
  • Interdependent
  • Part of a single composite scheme

Such transactions must be notified together, preventing parties from artificially splitting deals to avoid regulatory scrutiny.

Open Market Transactions and Section 6A

A significant reform is the introduction of Section 6A, which allows3:

  • Acquisitions through open offers or stock exchange purchases to be consummated prior to CCI approval

However, this flexibility is subject to strict safeguards:

  • Mandatory notification to the CCI
  • No exercise of control or voting rights until approval
  • No influence over the target’s business

This provision balances market efficiency with regulatory oversight.

Revised Approval Timelines

The reforms aim to enhance procedural efficiency by reducing review timelines:

  • Prima facie opinion: within 30 days
  • Overall review period: reduced from 210 days to 150 days

In practice, many transactions are cleared in Phase I, often within a significantly shorter period.

De Minimis (Target) Exemption

The thresholds for the target-based exemption have been revised upward:

  • Assets in India not exceeding INR 450 crore
  • Turnover in India not exceeding INR 1,250 crore

This ensures that smaller transactions are not burdened with notification requirements, while preserving scrutiny over significant deals.

Monitoring of Remedies

The CCI (General) Regulations, 2024 formalise the appointment of monitoring agencies to oversee compliance with merger remedies.

These may include:

  • Accounting firms
  • Management consultants
  • Other professional entities

Their role includes:

  • Monitoring behavioural and structural commitments
  • Reporting compliance to the CCI
  • Ensuring confidentiality

This strengthens post-approval enforcement mechanisms.

Conclusion

India’s merger control regime is undergoing a significant transformation, moving towards a more sophisticated, flexible, and globally aligned framework.

The introduction of the Deal Value Threshold, expansion of the concept of control, refinement of exemptions, and procedural streamlining collectively enhance the CCI’s ability to:

  • Capture complex and high-value transactions
  • Address competition concerns in digital markets
  • Provide greater regulatory certainty

For businesses, these developments underscore the importance of:

  • Early competition law assessment
  • Careful transaction structuring
  • Timely and accurate notification

As India continues to integrate with global markets, a robust and responsive merger control regime will remain critical to ensuring fair competition, innovation, and sustainable economic growth.

  1. https://www.cci.gov.in/images/publications_fairplay/en/fp-50-61124315pm-final-online-compressed1730891120.pdf ↩︎
  2. https://www.cci.gov.in/images/publications_fairplay/en/fp-50-61124315pm-final-online-compressed1730891120.pdf ↩︎
  3. https://www.cci.gov.in/images/legalframeworkact/en/the-competition-amendment-act-20231681363446.pdf ↩︎