Abir Roy and Geetanjali Sharma of Lakshmikumaran & Sridharan review the merger control regime in India

1. Regulatory framework

1.1 What is the applicable legislation and who enforces it?

The Competition Act, 2002 (Act), Competition Commission of India (CCI) (procedure in regard to the transaction of business relating to combinations) Regulation, 2011 (2011 Regulations). The legislation is enforced by the CCI.

1.2 What types of mergers and joint ventures (JVs) are caught?

All combinations subject to certain exemptions under the Act and the 2011 regulations are notifiable. A minority acquisition, carried out solely as an investment or in the ordinary course of business, of less than 25% is exempt provided that the investment does not lead to the acquisition of control of the target enterprise. The CCI has pointed out that strategic investment, even if the investment is less than 25%, will not exempt the transaction if it is not done in the ordinary course of business. Further, minority investment would not be exempt if it led to the acquisition of control. The decisional practice of the CCI on control shows that their threshold for control is very low, compared to other Indian regulators.

As regards JVs, purely greenfield JVs are non-notifiable because of a de minimisexemption issued by the Government of India (GOI). However, the CCI, through regulation 5(9) of the Combination Regulations, has clarified that in cases where assets/business units or divisions of an enterprise are transferred to an enterprise and, subsequently, the transferee enterprise enters into an acquisition/combination with a third enterprise, the entire value of the assets and turnover of the transferor enterprise (as opposed to only the assets and turnover of the divisions being transferred to the transferee enterprise), will be combined with the assets and turnover of the transferee enterprise for the purpose of calculating the threshold limits provided under section 5 of the Act. The CCI has used this amendment to expand their ambit to greenfield joint ventures, when there is a transfer of assets by the JV partners (Combination Case No C-2014/09/206).

2. Filing

2.1 What are the thresholds for notification, how clear are they, and are there circumstances in which the authorities may investigate a merger falling outside such thresholds?

The obligation to notify may be triggered in the following ways:

Parties test: the combined assets and turnover of acquirer and the target.

  • In India: assets of more than INR 15 billion ($224 million) or turnover of more than INR 45 billion; or;
  • In India or outside, in aggregate: assets of more than USD 750 million, with at least INR 7.5 billion in India, or turnover of more than USD 225 million, out of which INR 22.5 billion must be in India.
  • Group test: The group (to which the target enterprise would belong to, post acquisition) should have:
  • In India: assets of more than INR 60 billion or turnover of more than INR 180 billion; or
  • In India or outside India, in aggregate: assets of more than USD 3 billion, with at least INR 7.5 billion in India, or turnover of more than USD 9 billion, of which INR 22.5 billion must be in India.
  • Moreover, under a Government of India Notification S.O. 482(E), target-based exemptions apply, whereby for enterprises with assets of no more than 2.5 billion INR in India or a turnover of no more than 7.5 billion INR in India, no notification to the CCI is required. This de minimis exemption however expires on March 4 2016.
  • Mergers falling outside the threshold limits may still be scrutinised under Section 3, 4 read with Section 32 of the Act, in relation to anti-competitive agreements or abuses.

2.2 Are there circumstances in which a foreign-to-foreign merger may require notification, and is a local effect required to give the authority jurisdiction?

Foreign-to-foreign combinations may require notification and there is no local effects test.

2.3 Is filing mandatory or voluntary and must closing be suspended pending clearance? Are there any sanctions for non-compliance, and are these applied in practice?

Filing remains mandatory (if relevant thresholds are met). Closing must be suspended pending clearance and sanctions are enforced in practice for failing to comply.

2.4 Who is responsible for filing and what, if any filing fee applies? What are the filing requirements and how onerous are these?

The acquirer is responsible for filing in the case of an acquisition, and in the case of a merger, the parties to the merger have to jointly file the merger notification. The filing fee is onerous.

3. Clearance

3.1 What is the standard timetable for clearance and is there a fast-track process? Can the authority extend or delay this process?

The CCI has to form a prima facie opinion on the combination within 30 days as to whether it can cause an appreciable adverse effect on competition (AAEC) in India. However, this 30-day period does not include clock stops, meaning, the time taken when the CCI seeks additional information from the parties and the time taken by parties to respond to those additional information requests. Usually the clearance for a standard phase I review takes between six weeks and three months.

3.2 What is the substantive test for clearance, and to what extent does the authority consider efficiencies arguments or non-competition factors such as industrial policy or the public interest in reaching its decisions?

The test for clearance and relevant factors considered are well established.

3.3 Are remedies available to alleviate competition concerns? Please comment on the authority's approach to acceptance and implementation of remedies.

There is a well-established procedure for remedies, and remedies are regularly accepted. The remedies issued by the CCI to date range from behavioural remedies, for example, reduction in the duration of a non-compete clause, to structural remedies, for example, the sale of assets. The CCI has accepted remedies from parties and in the case of structural remedies, it has laid down the criteria for the purchaser and also appointed agencies to monitor the remedies.

4. Rights of appeal

4.1 Please describe the parties' ability to appeal merger control decisions – how successful have such challenges been?

Parties are free to appeal merger orders to the Competition Appellate Tribunal under section 53B of the Act. However, such appeals are not very frequent as the CCI has cleared mergers in all the cases to date.

5. Your jurisdiction

5.1 In no more than 200 words outline any merger control regulatory trends in your jurisdiction.

During July 2015, the CCI amended the mergers and acquisitions (M&A) filing requirements (Combination Regulations, 2011) aiming to make them simpler and more readily acceptable to various stakeholders, and thereby also aligning its practice with best practices in other jurisdictions. In this light, the recent amendment has twin implications. It goes a step beyond the existing regime, as it now provides an opportunity to any stakeholder or interested party to intervene in merger applications under the CCI's investigation. The focus of intervention shifts from the CCI using its discretion to parties now intervening on their own accord. Similarly, previously the competitors could only make submissions on their own during phase II of the investigation or when they were to intervene under regulation 19(3) of the 2011 regulations. Now, any stakeholder can provide comments in order to assist the CCI in making its determination of a merger, and the same can be exercised at any stage, that is, at the prima facie stage or a later stage of the merger investigation.

Similarly, in a recent order (Thomas Cook, 2015), The Competition Appellate Tribunal (COMPAT), overturning the order of the CCI also clarified that the provision pertaining to the filing of a single notice in a composite transaction must be liberally construed so as to facilitate the filing process.


  First published by our sister publication IFLR magazine. Take your free trial today.


Abir Roy
Lakshmikumaran & Sridharan
New Dehli

About the author

Abir Roy is a joint partner at Lakshmikumaran & Sridharan (L&S) and a senior member of the competition law practice at L&S. Roy has represented clients before the Competition Commission of India, the Competition Appellate Tribunal and the High Court on competition law-related matters. He has advised clients on both contentious and merger control matters. Roy has represented and advised clients on competition law across various industry segments, including aviation, automobile, stock exchange, entertainment, government procurement, liquor, consumer goods, chemicals, textile, and radio taxis. Roy is also the author of the leading commentary on Indian competition lawCompetition Law in India. Roy is a frequent contributor to leading journals and financial dailies.


Geetanjali Sharma
Lakshmikumaran & Sridharan
New Dehli

About the author

Geetanjali Sharma is a competition lawyer at the law offices of Lakshmikumaran & Sridharan in New Delhi. She advises clients on merger control advisory matters and notification processes. In addition, she has represented clients before competition tribunals and courts in India across a wide variety of sectors, including e-commerce, automobile manufacturers, multinational corporations involved in procurement for Indian railways, taxi associations, and so on. She has advised clients on the antitrust implications of their agreements in segments such as the ship-lining industry, and on patent settlement clauses and transactions in the real estate sector. Sharma has also been a part of the government consultancy project for the department of commerce of the Government of India, where she monitored and reported on trade policy developments, including antitrust issues arising within India's key trading partners, especially the US and Japan.