Government Policies and Business Regulatory Environment

Competition Law - Regulating Combinations

The erstwhile Monopolies and Restrictive Trade Practices Act, 1969 (MRTP Act) controlled monopolies and prohibited monopolistic and restrictive trade practices in India. The MRTP Act was completely replaced by the Competition Act, 2002, with effect from 1 September 2009.

The Competition Act moved away from the earlier emphasis of curbing monopolies towards promoting and sustaining competition to enhance consumer welfare and support economic growth.

Accordingly, the Competition Commission of India (CCI) was constituted to eliminate practices having an adverse effect on competition, promote and sustain competition, protect the interests of consumers and ensure freedom of trade in markets through the enforcement of competition law.

The Act prohibits anti-competitive agreements, abuse of dominant position by enterprises and regulates combinations (acquisition, acquiring of control, and mergers and acquisitions), which cause or are likely to cause an appreciable adverse effect on competition within India40.

The Competition Commission of India (CCI) made the following amendments to its Combination Regulations in order to further ease doing business in India:

Thresholds: Threshold levels (of assets and turnover) for notifying the proposed combination were increased by 100% through an order passed on 4 March 201641

Thresholds for filing notice
Enterprise level Assets or Turnover
India > INR 20 billion > INR 60 billion
Worldwide with
India leg
> USD 1 billion with at least
> INR 10 billion in India
> USD 3 billion with at least
> INR 30 billion in India
Group level or
India > INR 80 billion > INR 240 billion
Worldwide with
India leg
> USD 4 billion with at least
> INR 10 billion in India
> USD 12 billion with at least
> INR 30 billion in India

Increase in thresholds (De Minimis Exception): Threshold levels for exempting the target enterprise from notifying the proposed combination have been raised to INR 3.5 billion in assets or INR 10 billion in turnover from the earlier levels of INR 2.5 billion in assets or INR 7.5 billion in turnover. This exception was due to expire on 28 March 2022, however, through a notification dated 16 March 2022, the Ministry of Corporate Affair (MCA) extended the exemption benefit for a further period of 5 years (till 28 March 2027).

The CCI clarified the definition of the term 'other document' in the merger notice, the scope of which is now limited to a communication conveying the intention to make an acquisition to a Statutory Authority. This amendment clarifies what triggers the requirement to notify the CCI. The previous regulation called for conveying the intention of an acquisition to the Central or State Government or a Statutory Authority. Now, it is limited to a Statutory Authority only

Timeline Notification: The CCI has extended the deadline for completion of the Phase-I review of merger documents from 30 calendar days to 30 working days, providing ample time for dialog between the parties to the merger and the regulator to reach a positive outcome.

The CCI had relaxed the existing deadline of 30 days for merger notification. There is no longer an obligation to file the merger notification within 30 days of the trigger event. Transacting parties may choose to file at any time after the trigger event. This relaxation was due to expire on 28 March 2022. However, through a notification dated 16 March 2022, the Ministry of Corporate Affair (MCA) extended the exemption benefit for a further period of 5 years, (till 28 March 2027).

The CCI amended the Leniency Regulations to provide individuals with leniency benefits as well. The limitation on the number of firms filing for leniency benefits for a given case has been removed, as compared to the earlier allowance of only three applicants (on a first-come-first-serve basis).

As part of its ongoing and regular efforts to ensure faster Merger & Acquisition (M&A) filing approval, the CCI has introduced an automatic system of approval for combinations under the 'Green Channel'. The Green Channel aims to sustain and promote a speedy, transparent, and accountable review of combination cases, strike a balance between facilitation and enforcement functions, create a culture of compliance, and support economic growth. Under this process, the combination is deemed to have been approved upon filing the notice in the prescribed format. Simultaneously, the CCI has also revised its pre-filing consultation guidance note to extend its scope to include a consultation to help the parties determine if their combination is eligible for Green Channel. The parties filing combination notice can now also meet the case team in person.42

Get in Touch
Virender Bhasin
Executive Director
Entity Set-up & Management

Subscribe to our Newsletter

We are constantly working on sharing relevant alerts & publications to keep you informed on the latest developments.

Get Your Guide on Doing Business India