1. What is the current legal landscape for M&A in your jurisdiction?

The legal landscape for mergers and acquisitions (M&A) in India during 2026–2027 is marked by a significant evolution in the approach adopted by antitrust authorities and government regulatory bodies. Regulatory review has become more rigorous and analytical, extending beyond traditional market-share assessments to include issues concerning digital data protection, competition scrutiny, and strategic control over key sectors. Following a strong performance in 2025, when total deal values reportedly exceeded USD 153, the M&A market in 2026–2027 continues to be driven by larger and more strategic transactions. Key trends include the growing prominence of corporate carve-outs, the expansion of Global Capability Centres (GCCs), and the use of private credit financing structures.

The main features of the current M&A legal landscape are as follows:

(a) Basic Regulatory Changes :

• Taxation and Budget 2026: The Income Tax Act, 1961 has been replaced by Income Tax Act, 2025, with the object of streamlining the statutory tax framework while preserving the existing substantive tax structure in several areas including tax-neutral treatment for amalgamations subject to compliance with prescribed conditions. Under the revised regime, proceeds from share buybacks are taxable in the hands of shareholders as capital gains, with listed equity attracting 12.5% long term capital tax rate, subject to applicable statutory conditions and exemptions. Multinational companies are increasingly evaluating the implications of the global minimum corporate tax rate of 15%, which can materially affect the transaction pricing, valuation models, and post-acquisition integration strategies, particularly where the existing tax incentives or holidays may be neutralized through additional tax levied on multinational enterprises.

• Corporate Laws (Amendment) Bill, 2026: On March 23rd,2026, the Corporate Laws (Amendment) Bill, 2026 was introduced in Lok Sabha with the objective of improving ease of doing business by amending the Companies Act, 2013(Companies Act) and the Limited Liability Partnership (LLP) Act, 2008. Key changes include decriminalizing minor offenses, doubling small company thresholds, easing CSR compliance, and modernizing governance via digital meetings. The proposed reforms seek to further modernize the Companies Act highlighting:

(i) Fast-Track Mergers (Section 233): Thresholds for startups/small companies are increased (share capital up to ₹20 Crores; turnover up to ₹200 Crores), enabling faster, non-NCLT mergers.

(ii) IFSC/GIFT City: Increased flexibility relating to foreign currency denominated share capital, reducing frictional costs associated with international transactions.

(iii) Buyback Reforms: Buyback procedure is relaxed, making it a more flexible capital-return tool with stricter tax treatment for promoter-level exits.

• Digital Personal Data Protection (DPDP) Act, 2023: The DPDP Act and the evolving compliance framework under the associated rules significantly increased the importance of data governance, cyber security compliance and data management, making data governance a major deal-diligence consideration in M&A transactions.

• Labour Codes: India has consolidated 29 central labour laws into four codes governing wages, social security, industrial relations and occupational safety. These reforms are expected to streamline the Indian M&A market in multiple ways. Over the medium term, it is likely to encourage deal activity by streamlining India’s previous labour law regime through standard definitions, digital compliance mechanisms, and a unified registration framework.

(b) Merger Control & Competition Law (CCI)

• Deal Value Threshold (DVT): Transactions exceeding the prescribed deal value threshold of ₹2,000 Crores require CCI approval if the target has substantial business operations in India. This framework intends to address regulatory gaps connected with digital and asset light acquisitions and enhance scrutiny of transactions involving important digital market presence.

• Material Influence Standard: The CCI focuses on the ability to exert material influence (e.g., board seats, veto rights) rather than absolute control, impacting minority private equity and strategic investments.

• 150-Day Timeline: The outer statutory merger review period is capped at 150 days (reduced from 210), with “deemed approval” mechanisms.

• On-Market Purchases: The regulatory framework permits limited exemptions from standstill obligations for certain open market purchases, allowing investors to complete transactions executed through regulated stock exchanges before seeking final approval in particular situations.

• Gun Jumping: Enforcement against “gun-jumping” (closing before approval) has become more intense. Regulatory authorities have imposed stricter penalties on parties which implement or partially consummate transactions before obtaining the approvals.

(c) Foreign Direct Investment (FDI) & Foreign Investment: India’s FDI regime in 2026 reflects a shift from a wide framework towards a more nuanced, threshold-based approach for investments originating from land-bordering countries (LBCs). In March 2026, non-controlling beneficial ownership of up to 10% from LBC entities is allowed under the automatic route (subject to sector caps). To improve the regulatory efficiency, the Department for Promotion of Industry and Internal Trade (DPIIT) has introduced a streamlined online mechanism designed to process for government approval applications within 12 weeks. India continues to liberalise foreign investment norms across sectors such as manufacturing, renewable energy, infrastructure and certain insurance related activities subject to applicable sectoral caps, regulatory conditions and approval mechanisms.

(d) Public M&A and Listed Entities (SEBI)

• Takeover Code (SAST): An open offer is triggered upon acquiring 25% or more voting rights or upon acquiring control under SEBI Regulations, 2011.

• Pre-IPO Norms: SEBI has tightened regulations for pre-IPO placements to ensure stability, limiting secondary sales. Proposed changes (expected for 2027) intend to shift open offer price determination from acquirer-led calculations to independent registered valuers.

• Market Rumour Clarifications: Listed entities are required to confirm/deny media reports influencing share prices.

• Mergers involving companies currently undergoing liquidation under the Insolvency and Bankruptcy Code (IBC) are prohibited.

(e) Distressed M&A: The Insolvency and Bankruptcy Code, 2016 (“IBC”) continues to remain a significant driver of distressed M&A activity and sectoral consolidation in India, particularly in infrastructure, manufacturing, healthcare and real estate sectors.

2026 Trends

• Bank-Financed M&A: Indian banks and financial institutions are increasingly participating in structured acquisition financing and sponsor backed transactions, subject to applicable prudential norms and sector-specific restrictions. This reflects the gradual evolution of India’s acquisition financing landscape and is expected to improve access to domestic financing for M&A activity.

• GCC Growth: GCCs are increasingly positioned as strategic assets, contributing to inbound deal activity. In 2025, India witnessed significant investment in digital infrastructure, particularly in the development of data centres and the expansion of GCCs. The growth of cloud computing, artificial intelligence, digital payments, and e-commerce has driven demand for data storage and processing capacity, resulting in measurable transaction activity in the data centre space. In response, global technology companies and infrastructure investors have increased capital deployment into large-scale data centre platforms across key metropolitan clusters such as Mumbai, Chennai, Hyderabad and Bengaluru. These investments have been structured through acquisitions, joint ventures or strategic partnerships with real estate developers and energy providers, reflecting the capital-intensive and infrastructure heavy nature of the sector. At the same time, GCC related transactions continue to evolve in sophistication, with multinational corporations continuing to expand their India GCC presence. GCCs are increasingly transforming from back-office support functions into strategic hubs for technological development, data analytics and research.

Deal making in India has become more sophisticated, with parties making use of warranty and indemnity (W&I) insurance as a commercial risk allocation mechanism in M&A deals. Recent regulatory developments have also increased deal execution processes and expanded access to capital. At the same time, evolving compliance requirements and labour law reforms have increased the complexity of due diligence exercises, thereby intensifying the need for robust contractual safeguards and elaborate risk-protection mechanisms.

The Indo-EU trade deal is expected to significantly reduce tariffs and make trade between India and Europe much easier and cheaper.

Its biggest impact is likely to be:

• increased Indian exports to Europe (especially textiles, pharma, engineering and IT services),
• greater European investment into India,
• stronger manufacturing and supply-chain partnerships,

In simple terms, the deal could help position India as a major global manufacturing, export and investment hub connected closely with the European market.

2. What three essential pieces of advice would you give to clients involved in M&A matters?

Essential advice for clients in M&A includes conducting rigorous due diligence to identify risks early, focusing on legal, operational, and cultural considerations rather than solely financial metrics. Clients should prioritise comprehensive due diligence, early assessment of regulatory approvals and foreign investment considerations and robust transaction documentation to mitigate specific post-closing risks.

Hereinbelow are three essential pieces of advice:

• Conduct Deep, Localized Due Diligence
Do not rely solely on high-level documents; investigate financial, legal, and operational risks thoroughly, focusing on title to property, hidden tax liabilities, and potential litigation. Comprehensive due diligence frameworks should be implemented at an early stage to minimise post-closing disputes and integration challenges.

• Navigate FDI and Regulatory Compliance Early
India’s regulatory landscape, particularly regarding FDI and the Foreign Exchange Management Act (FEMA), applicable to investments connected with land bordering countries, continues to require careful regulatory analysis. India’s regulatory landscape concerning the foreign investments approvals, sectoral caps, pricing guidelines, downstream investment restrictions, and merger control approvals can be restrictive or complex. Ensure that all approvals (including RBI, CCI if applicable) are accounted for in the deadline, as delays are common.

• Ensure Strong Legal Documentation and Cultural Fit
Appoint experienced local legal counsel to draft robust representations, warranties and indemnities to manage and minimise risks from incomplete seller disclosures. It is also important to focus on combining organizational culture and operations, as this influences the success of transactions in the Indian market.

3. What are the greatest threats and opportunities in M&A law in the next 12 months?

The greatest threats and opportunities in M&A law in India in the next 12 months (roughly May 2026 – May 2027) are as under:

Opportunities

(a) Technology, Artificial Intelligence(AI) and Digital Infrastructure Deals

• Opportunity: AI is evolving from a thematic trend to a central driver of deal making, with companies targeting acquisitions in areas such as data analytics, cloud computing, and cybersecurity.
• Legal Focus: Emphasis on IP due diligence, AI related regulatory compliance, data protection compliance, and technology focused acquisitions.

(b) Cross-Border Inbound Investment & GCC Acquisitions

• Opportunity: India continues to attract global investors as a preferred destination for supply chain diversification beyond China, particularly in manufacturing, automotive, and specialty chemicals.
• Legal Focus: Ensuring compliance with Press Note 3 (PN3) requirements for investments from neighbouring jurisdictions, and managing intellectual property transitions in GCC carve-out transactions.

(c) Private Credit-Led Acquisitions and Structured Finance

• Opportunity: Private credit funds continue to play an increasingly significant role in acquisition financing and mid-market transactions, particularly where traditional financing structure remains constrained.
• Legal Focus: Emphasis is being made on negotiating complex inter-creditor arrangements and customized, non-standardized customized, non-standardized financing solutions
  financing solutions.

(d) Distressed Assets (IBC) and Consolidation

Opportunity: The IBC continues to be considered as a primary tool for acquiring distressed assets, particularly in sectors like real estate, manufacturing, and pharmaceuticals.

(e) Renewable Energy and Infrastructure (REI)

Opportunity: The 500 GW target by 2030 drives M&A, particularly in solar, wind, and green hydrogen, attracting important sovereign and private equity capital.

Greatest Threats and Challenges (2026–2027)

• Stringent Competition Law (CCI) and “Gun Jumping”
Threat: The Competition (Amendment) Act, 2023 has introduced a deal value threshold (DVT) of ₹2,000 Crores, expanding the scope of transactions requiring approval from the CCI. As a result, parties must be careful regarding pre-closing conduct, as enforcement against “gun-jumping” the implementation of transactions before obtaining regulatory approval has become stringent.

• Geopolitical and Regulatory Uncertainty (PN3)
Threat: PN3 continues to create regulatory uncertainty delay approvals for investments from LBC with beneficial ownership links to such jurisdictions. Regulatory unpredictability may materially affect transaction certainty, valuation negotiations, financing arrangements, and transaction closing timelines, particularly in sensitive sectors and strategic investments.

• Increased Tax Scrutiny and Treaty Challenges
Threat: The Income Tax Act, 2025, and the evolving application of General Anti-Avoidance Rules (“GAAR”), have intensified scrutiny of cross-border investment structures and treaty claims. Tax Residency Certificates (“TRCs”) are no longer treated as determinative in isolation for availing treaty benefits, particularly where beneficial ownership concerns arise.

• Valuation Gaps and Overvaluation Risks
Threat: High-quality assets require heavy premiums, leading to potential overvaluation, while cyclical sectors face valuation gaps, making deal completion difficult.

• Data Protection (DPDP Act) and Workforce Restructuring
Threat: DPDP Act increases compliance and liability exposure for data fiduciaries in M&A transactions, particularly in due diligence, employee transfers, and post-merger integration.

4. How do you ensure high client satisfaction levels are maintained by your practice?

Ensuring high levels of client satisfaction in Indian M&A requires a proactive approach cantered on transparent communication, commercial responsiveness, regulatory clarity and minimizing operational disruption during transactions and post-closing integration processes. Maintaining client confidence also requires timely execution, practical risk assessment, and consistent stakeholder engagement throughout the transaction lifecycle. .

Key Strategies for Maintaining Client Satisfaction:

We at Cornerstone Law believe, building client faith begins with consistency, responsiveness and reliability. We communicate proactively and meet timelines. We are transparent about risks, candid about challenges and practical in our approach. We create an atmosphere of trust where Clients remain satisfied that their matters are being handled diligently without the need for constant follow-up.

While ensuring compliance, many times offering commercially focused advice rather than purely technical legal analysis. Clients increasingly seek counsel who understand their business objectives, industry dynamics and strategic pressures, and who can provide solutions that are both legally sound and commercially workable. By developing deep sector expertise in areas such as M&A, technology, startups and strategic investments, Cornerstone Law positions itself not merely as external legal counsel, but as a trusted strategic partner involved in the client’s long-term growth journey.

We understand that strong relationships are ultimately built through confidence and credibility over time. This requires maintaining high standards of professionalism, confidentiality, ethics and quality across all levels of the firm. Clients value firms that help them make decisions faster, manage risk effectively and navigate transactions smoothly. By combining sound legal judgment with commercial awareness, responsive service and a client-centric mindset, Cornerstone Law has succeeded in foster long-term relationships that lead to trust, repeat engagements and consistently high levels of client satisfaction.

5. What technological advancements are reshaping M&A law and how can clients benefit from them?

AI-powered due diligence tools, Virtual Data Rooms (VDRs), and automated contract analysis, streamline document review, identify risks more effectively, and reduce reliance on manual processes, thereby decreasing transaction costs and minimizing human error. Clients benefit from these technological advancements through faster and more efficient transaction execution, improved legal and regulatory review processes, enhanced data security and more efficient risk assessment and compliance management.

Key Technologies Reshaping Indian M&A Law

• AI-Powered Due Diligence: AI tools are transforming due diligence by automating the review of many documents to detect risks, financial irregularities, and compliance gaps under Indian laws and regulations. This reduces the time and cost associated with the manual review processes while improving accuracy and consistency in risk assessment.

• Virtual Data Rooms (VDRs) with AI: Secure cloud-based platforms now use AI to categorize documents, track user engagement, and automatically redact sensitive information, essential for compliance with data protection regulations.

• Contract Analytics and Automation: Technologies are used to analyse complex contracts for change-of-control provisions, non-standard indemnities, and to generate first drafts of legal documents, accelerating the negotiation phase.

• Regulatory Integration and Digital Verification Tools: Technology enabled compliance tools increasingly integrate with government portals (e.g., MCA, GST) to instantly verify director KYC, tax records, and compliance.

• Blockchain and Smart Contracts: Although still evolving within the Indian market, blockchain based systems and smart contract technologies are increasingly being explored for secure record management, transaction authentication, escrow arrangement, and automated execution mechanism in complex commercial transactions.

Benefits to Clients

• Enhanced Speed and Efficiency: Automation significantly reduces the time required for due diligence allowing for quicker transaction, or “deal,” closures. However, since these technologies are still nascent, the propensity to completely rely on such automated due diligence is limited and we very carefully sift through the AI generated information before accepting it and passing it on to our clients.

• Improved Risk Identification and Mitigation: There is a possibility, that AI identifies hidden liabilities, financial risks, or regulatory non-compliance that might be missed in human review. However this is in the realm of speculation right now, and we hope it becomes possible in the near future.