Strengthening Merger Oversight in India

Posted On - 18 April, 2026 • By - Surbhi Kapoor

Introduction

The merger control regime in India has undergone significant transformation following recent reforms under the Competition Act, 2002. Pursuant to the Competition (Amendment) Act, 2023 and subsequent regulations operationalised in 2024, the Competition Commission of India (CCI) has introduced a more structured, modern, and principle-driven framework for reviewing combinations.

Key reforms include the introduction of the Deal Value Threshold (DVT), refinement of exemption rules, formal recognition of the concept of material influence within the definition of control, changes in the assessment of competitive overlaps, streamlined approval timelines, and the establishment of mechanisms to monitor compliance with post-approval conditions.

In May 2025, the CCI issued updated Frequently Asked Questions (FAQs) clarifying the implementation of these reforms. Between late 2024 and December 31, 2025, the CCI approved 162 combination filings, approximately 12.36% of which were notified under the DVT framework reflecting its growing practical significance.1

Deal Value Threshold: Expanding the Scope of Notification

Traditionally, combinations were notifiable based on asset and turnover thresholds prescribed under the Act. However, the introduction of the Deal Value Threshold, pursuant to the Competition (Amendment) Act, 2023 and operationalised through regulations in 2024, has significantly expanded the scope of notifiable transactions.

Under this framework, a transaction must be notified where:

  • The deal value exceeds INR 20 billion; and
  • The target enterprise has substantial business operations in India (SBOI).

Importantly, DVT-based notifications apply irrespective of whether traditional asset or turnover thresholds are met, and the de minimis (target) exemption is not available in such cases.

The CCI has adopted a broad interpretation of “deal value”, which includes:

  • Cash and non-cash consideration;
  • Deferred payments and earn-outs;
  • Non-compete fees and licensing arrangements;
  • Any additional consideration payable within a specified period post-closing.

Where deal value is not explicitly ascertainable, parties are expected to undertake a reasonable, good-faith estimation based on available information.

Substantial Business Operations in India (SBOI)

For the DVT to apply, the target must have substantial business operations in India. The regulations and accompanying guidance provide indicative criteria for determining SBOI.

A target is generally considered to meet this threshold where:

  • Its Indian turnover constitutes at least 10% of its global turnover, and exceeds INR 5 billion; or
  • In digital markets, a significant proportion (typically 10% or more) of its users are located in India.2

These thresholds ensure that transactions with a meaningful nexus to Indian markets are subject to regulatory scrutiny.

Redefining “Control”: The Material Influence Standard

The concept of “control” remains central to merger notification requirements. Under Indian competition law, “control” has been interpreted expansively by the CCI and now expressly includes the ability to exercise material influence over the management or strategic commercial decisions of an enterprise.

This approach, developed through decisional practice and now codified, recognises that control may arise even in the absence of majority shareholding.

Factors that may indicate control include:

  • Rights to appoint or remove directors or key managerial personnel;
  • Veto rights over business plans, budgets, or strategic decisions;
  • Shareholding coupled with governance or contractual rights.

While shareholding above 25% may, depending on accompanying rights, indicate the ability to exercise material influence, control is ultimately assessed on a case-by-case basis.

Importantly, not all investor protections constitute control. Rights such as:

  • Information rights;
  • Tag-along or exit rights;
  • Anti-dilution protections;
     generally do not, in isolation, amount to control.

The CCI has also clarified that a change in control includes not only a shift from joint to sole control, but also a change in the quality or degree of influence, such as enhanced governance rights or exit of an existing controlling shareholder.

Commercially Sensitive Information (CSI)

The updated FAQs provide clarity on what constitutes commercially sensitive information (CSI).

CSI includes:

  • Pricing strategies, cost structures, and profit margins;
  • Market shares and customer data;
  • Production levels and capacity;
  • Business plans, R&D strategies, and internal reports.

Conversely, the following are generally not considered CSI:

  • Publicly available information;
  • Historical data not relevant to current decision-making;
  • Aggregated or anonymised data;
  • Standard financial statements prepared under accounting norms.

These clarifications are particularly relevant in assessing permissible information exchange during transaction evaluation and overlap analysis.

Revised Exemption Framework

The 2024 reforms have narrowed and refined the scope of exemptions, particularly in relation to minority investments.

To qualify as a solely for investment exemption, an acquirer must:

  • Hold not more than 25% of shares or voting rights;
  • Not acquire control;
  • Not obtain board representation or observer rights;
  • Not access CSI;
  • Not have horizontal, vertical, or complementary overlaps with the target (except in limited cases where shareholding is below 10% and other conditions are met).

Other exemptions include:

  • Incremental acquisitions, provided they do not result in control or new rights;
  • Intra-group transactions, where there is no change in control;
  • Demerger transactions, where shareholding remains proportionate.

Overall, exemptions are now more conditional and narrowly construed.

Interconnected Transactions

The CCI requires that interconnected transactions be notified as a single combination. Interconnectedness is assessed based on factors such as:

  • Simultaneous execution;
  • Conditionality between transactions;
  • Common commercial objective;
  • Financial interdependence;
  • Evidence of a shared “meeting of minds.”

Even transactions that may be exempt individually may become notifiable when part of a larger interconnected structure.

Open Offers and Market Purchases

The revised framework permits certain acquisitions such as open offers and market purchases to be completed prior to CCI approval, subject to safeguards.

Key conditions include:

  • Filing notice within the prescribed timeline from the triggering acquisition;
  • Not exercising voting or control rights prior to approval;
  • Maintaining the target as a separate economic entity.

While economic benefits (such as dividends) may be received, control rights remain suspended until approval.

Overlap Assessment and Affiliate Test

The revised framework expands the concept of affiliates for overlap assessment. An enterprise may be considered an affiliate not only based on shareholding or board representation, but also where it has:

  • The right or ability to access commercially sensitive information; or
  • The ability to exercise material influence.

This broader test impacts:

  • Identification of horizontal, vertical, and complementary overlaps;
  • Eligibility for the green channel route.

Approval Timelines and Target Exemption

The reforms have introduced stricter timelines:

  • The CCI must form a prima facie opinion within 30 calendar days;
  • The overall review period has been reduced from 210 days to 150 days.

Where no prima facie opinion is formed within the statutory period, the combination may, subject to applicable conditions, be deemed approved.

The de minimis (target) exemption has also been revised:

  • Assets in India ≤ INR 4.5 billion; or
  • Turnover in India ≤ INR 12.5 billion.

However, this exemption does not apply to DVT-based filings.

Monitoring Post-Approval Compliance

The CCI now has explicit powers to appoint an independent monitoring agency to oversee compliance with conditions attached to merger approvals.

The monitoring agency must:

  • Be independent and free from conflicts of interest;
  • Track implementation of remedies;
  • Report instances of non-compliance;
  • Maintain confidentiality of sensitive information.

Costs of monitoring are typically borne by the parties to the transaction.

Conclusion

The reforms introduced between 2024 and 2025 mark a structural evolution of India’s merger control regime. The introduction of the Deal Value Threshold, formal recognition of material influence, refinement of exemptions, expansion of overlap assessment, and streamlined timelines collectively enhance both regulatory certainty and enforcement capability.

The framework reflects a shift toward substance over form, ensuring that transactions with a real impact on Indian markets are subject to scrutiny, irrespective of traditional thresholds.

Parties engaging in transactions involving India must now adopt a proactive and structured approach, carefully assessing notification triggers, control dynamics, competitive overlaps, and compliance obligations at an early stage.

  1. https://www.cci.gov.in/images/whatsnew/en/faq-book-english-compressed1747724324.pdf ↩︎
  2. The Competition Act defines ‘turnover’ as the turnover which has been certified by the statutory auditor on the basis of the last available audited accounts of the company in the financial year immediately preceding the financial year in parties notify a transaction. Such turnover in India is determined by excluding intra-group sales, indirect taxes, trade discounts and all amounts generated through assets or business from customers outside India, as certified by the statutory auditor. ↩︎