The BGA India Team led by Managing Director Ratan Shrivastava, wrote an update to clients on India’s Competition Act amendment bill and how it marks a blend of reforms that seek greater M&A regulation.

Context

  • Minister of State for Corporate Affairs Rao Inderjit Singh introduced several amendments to the 2002 Competition Act in India’s lower house on August 5. This could impact global merger and acquisition (M&A) agreements and affect controlling stakes for companies with a significant presence in India.
  • Amendment of the Competition Act has been necessitated by the significant growth of India’s consumption market and emergence of newer technologies since the early 2000s that have led to a fundamental shift in the way businesses operate.

Significance

  • The legislation looks to empower India’s antitrust regulator, the Competition Commission of India (CCI), to regulate competition and investigate anticompetitive offenses. It also broadens the definition of anticompetitive agreements, introduces a deal value threshold to the current asset value and turnover value thresholds to assess M&A compliance. The draft legislation also expedites the M&A approval process and incentivizes parties to share information during antitrust investigations.
  • The bill is expected to give CCI a greater say in global M&A deals as India moves closer to becoming a $5 trillion economy. The amendments would allow CCI to intensify its scrutiny of Big Tech M&As, and it would permit the government to regulate deals involving the Indian user base and digital and technology companies by bringing e-commerce firms and digital startups into CCI’s jurisdiction.

Implications

  • Businesses can expect the bill to match antitrust laws across major economies and protect domestic market competition.
  • Companies can benefit by closely monitoring developments and engaging in the consultative process as the requirement that CCI engage in public consultations before issuing regulations is a welcoming move. Certain provisions in the bill, such as empowering the CCI to seize and withhold documents during the investigation process, will likely remain industry pain points.

BGA will continue to keep you updated on developments in India as they occur. If you have any comments or questions, please contact BGA India Managing Director Ratan Shrivastava at ratan@bowergroup.com.

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Managing Director

Ratan is a senior executive and management consulting professional who has a proven track record in government, consulting and industry across India and Southeast Asia, with a wide network across stakeholders. He has been instrumental in developing and implementing growth strategies for both the public and private sector and has led diverse teams to secure new market opportunities. Prior to joining BGA, Ratan was at KPMG India where he helped the integration of the small and medium industry clusters, with the domestic and global aerospace, defense and space supply chains. He also served as an advisor at the Federation of ... Read More