India - Market Insights

India’s merger control: navigating the new regime

India’s merger control regime has undergone its most consequential transformation since enforcement began in June 2011. The Competition (Amendment) Act 2023, the Combination Regulations 2024, and the CCI’s updated FAQs of May 2025 together constitute a comprehensive “upgrade”. The regime that has emerged is more sophisticated, more demanding, and in some respects more uncertain than what preceded it. This article discusses the most significant recent developments and identifies key issues likely to define the road ahead.

What has changed?

Five structural changes define the new framework.

• Introduction of a deal value threshold (DVT). This is perhaps the most significant change to India’s merger control. Transactions exceeding a global deal value of (~USD 227.4 million), where the target has “substantial business operations” (SBO) in India, are now mandatorily notifiable regardless of whether the traditional asset or turnover thresholds are met or whether the “de minimis exemption” is available. India has joined a handful of jurisdictions, including Germany, Austria, Japan, South Korea and the United States, in adopting this threshold.
• Truncated timelines, in theory. The Phase 1 review period has been reduced from 30 working days to 30 calendar days, and the overall review timeline from 210 to 150 calendar days. In practice, straightforward Phase 1 cases continue to take five to seven weeks, given clock stops and the fact that the review period runs only from the date defects are cured. A more significant procedural development is the deemed approval mechanism: if the CCI does not reach a decision within 30 days (however computed), the transaction is automatically approved.
• Green Channel, but beware of the red! The automatic approval route for combinations with no overlaps is a business-friendly concept, but is likely to benefit principally new market entrants with little or no existing India footprint. Overlaps must be ruled out across all “affiliates” of the acquirer and target, with “affiliate” defined broadly to capture any entity where a party holds 10% shares, a board seat, or access to commercially sensitive information (FAQs helpfully illustrate what is likely to qualify). The obligation extends to affiliates of affiliates, traced through the entire ultimate controlling person of the acquirer. A PE fund with a complex structure or diversified portfolio will rarely qualify. The risk of the CCI disagreeing with a Green Channel self-assessment post-filing (revoking automatic approval) also cannot be ruled out, making a pre-filing consultation advisable before using this route.
• Revised exemptions, broader in some respects and narrower in others. Creeping acquisitions (incremental acquisitions up to 25%) and mirrored demergers are now expressly exempt, which is a welcome development. On the other hand, the intra-group exemption has been materially tightened: the previously broad “group” definition, shaped by the wide definition of control, has given way to a more mechanical test requiring 50% or more shareholding with no change in control. The joint-to-sole control test has been replaced with a “change in control” test, decreasing the likelihood of incremental acquisitions across the 25–50% and above 50% thresholds being exempt.
• Standstill derogation for regulated market transactions. Open offers and secondary acquisitions on a regulated stock exchange may now proceed before CCI approval, provided the acquirer exercises no ownership or beneficial rights until CCI approval. This accommodates the commercial timelines of capital markets transactions without displacing competition review. The derogation does not, however, extend to preferential allotments, which remain subject to standard standstill obligations.

DVT: a measured start, but watch this space

Almost two years since its introduction, the DVT has generated just over 40 notifications, with fewer than 10% involving digital transactions, which was the very objective behind its introduction. The conjunctive SBO test, requiring 10% or more of a company’s global gross merchandise value (GMV) or turnover to be from India and an absolute India floor of INR 5 billion, is filtering out transactions without genuine India nexus, as intended. For digital services, the test operates on a disjunctive basis: SBO is met if the target satisfies either the GMV or turnover criteria, or if 10% or more of its annual average business or end users are India-based. The absence of a high-profile DVT case may not indicate failure; it reflects a calibrated local nexus test working as designed.

Although the Standing Committee on Finance has recommended lowering the INR 20 billion threshold, this may be premature. The DVT will face its real test as India’s AI and technology sectors scale and foreign investment in digital platforms accelerates. With the benefit of more transactions, the right response may lie in refining the digital SBO criteria rather than reducing the DVT headline figure. A lower threshold without an effective local nexus filter risks producing benign filings without improving competitive oversight. As the CCI does not have call-in powers, transactions below the jurisdictional threshold cannot be reviewed regardless of their competitive significance. This makes precise calibration of the DVT more consequential than a simple reduction in the threshold figure.

The definition of Indian turnover has also been amended to exclude export revenues, limiting it to revenue generated from Indian customers. Read together with the increased de minimis thresholds, this serves as a useful filter ensuring the notification obligation is directed at transactions with a genuine bearing on Indian consumers rather than those with only a nominal domestic footprint.

Control: hard-won clarity, other challenges

The CCI’s May 2025 FAQs provide the most practically useful guidance on control since the regime was established. The illustrative mapping of rights that do and do not raise a presumption of control, including appointment and removal of senior management, approval of budgets and business plans, and alteration of charter documents on one hand, against information rights, tag-along rights, anti-dilution rights and exit rights on the other, is a meaningful contribution to certainty.

There is a legitimate debate about whether India’s shift toward a “material influence” standard from the earlier “decisive influence” benchmark is fully justified. Although several jurisdictions, including the United Kingdom, have moved in this direction, the broader threshold risks capturing ordinary minority investments that pose no real competitive concern. Even so, the certainty delivered by the FAQs is welcome, particularly given that the CCI’s own decisional practice had already moved toward the material influence standard in recent years.

A noteworthy nuance is that a change in the degree of control now carries a notification risk. Under the prior framework, the exemption applied to changes between sole and joint control; a mere change in degree of control was not caught. The position is now narrower. Changes in shareholding thresholds or the inclusion of a single “control conferring” right can all constitute notifiable events. Accordingly, secondary transactions, restructurings and shareholder exits require fresh notifiability analysis as a result.

Pre-filing consultations with the CCI are available and often a useful first step. There is, however, scope to build on this by formalising the process for more complex cases, particularly where novel control questions carry material implications for penalty exposure and commercial certainty. A written engagement mechanism would strengthen the framework without creating formal obligations on either side. The CMA’s practice of accepting informal briefing notes to its Mergers Intelligence Committee, after which it may confirm in writing that it has no further questions at that stage, offers a thoughtful reference point. A comparable process in India could, over time, generate a body of CCI positions on complex questions that are not otherwise captured in publicly available decisional practice and increase business certainty.

Issues to watch

Based on the current trajectory of the regime, three developments merit attention:

• DVT calibration for digital markets. The DVT’s effectiveness will be judged by how it performs across the next wave of AI and platform transactions, not the limited set of filings to date. The more pressing policy question is whether the SBO criteria are sufficiently precise to catch transactions that genuinely matter while balancing the unavailability of CCI’s call-in powers. Calibration of the DVT matters more than reduction.
• The affiliate overlap mapping burden. As deal volumes increase, the scope of the affiliate-of-affiliate overlap obligation is likely to generate its own body of guidance, whether through CCI decisional practice, updated FAQs or industry engagement. The low affiliate threshold will continue to make diligence difficult for fund-led cross-border deals, and there is likely to be growing pressure for a materiality-based filter or clearer carve-outs for minority portfolio holdings. How quickly the CCI responds will have a direct bearing on the attractiveness of the Indian transactional market to institutional investors.
• Enforcement maturity and the no-block record. Since the regime became operational on 1 June 2011, not a single transaction has been blocked by the CCI. Other than one technically initiated Phase 2 in the Bharat Forge matter, there have been no Phase 2 investigations since 2018, reflecting a regime where competition concerns have consistently been resolved through conditions rather than prohibition. A related development is the interface between merger control and India’s insolvency regime. The Supreme Court’s January 2025 ruling in the Independent Sugar Corporation case established that CCI clearance of a combination is a mandatory pre-condition to creditor approval of a resolution plan. The Insolvency Bankruptcy Amendment Bill 2025, which received parliamentary approval in March 2026, adjusts the sequencing so that CCI approval follows the creditor vote but precedes adjudicating authority sanction, a more commercially workable position. For acquisitions involving Indian distressed assets, CCI clearance should be treated as a front-end strategic consideration from the outset. Finally, the CCI’s enforcement for gun-jumping has seen an uptick, with the CCI issuing seven gun-jumping orders since 2025. Recently, the Indian Supreme Court set aside a significant gun-jumping penalty on Amazon and clarified the scope of the regulator’s powers in relation to substantively reviewing transactions the CCI had approved. It also clarified that the CCI could not conflate misrepresentation with insufficient disclosure (Amazon v. CCI (2026)).

Conclusion

Indian merger control is moving in broadly the right direction. The CCI’s FAQ guidance has reduced uncertainty on a number of important issues. A wish-list for the near term includes a more formal body of pre-notification engagement, a more workable overlap assessment framework for diversified investors, and a cleaner intermediate review track for competitively benign transactions. The clear takeaway for now: engage early and assess notifiability carefully.