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:

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:

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:

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:

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:

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:

Conversely, the following are generally not considered CSI:

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:

Other exemptions include:

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:

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:

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:

This broader test impacts:

Approval Timelines and Target Exemption

The reforms have introduced stricter timelines:

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:

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:

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.

Authored by Surbhi Kapoor, Partner  https://ksandk.com/people/surbhi-kapoor/

https://ksandk.com/