CCI approval for merger and acquisition transactions is one of the most underestimated regulatory clearances in Indian dealmaking. Parties who complete transactions without obtaining required CCI approval-so-called “gun-jumping”-face penalties, deal voiding, and compulsory unwinding orders. The Competition Act, 2002, as substantially amended by the Competition (Amendment) Act, 2023, now contains one of the more comprehensive merger control regimes in Asia. Understanding when CCI approval is required, how to file, and what the timelines mean for deal execution is essential knowledge for any party involved in significant M&A in India.
Under Section 5 of the Competition Act, 2002, a “combination” (acquisition, merger, or amalgamation) exceeding the prescribed financial thresholds must be notified to the CCI and cannot be implemented without CCI approval under Section 6.
The Competition (Amendment) Act, 2023, revised the thresholds, which became effective from September 10, 2024 alongside the new CCI Combination Regulations:
Asset-Based Threshold (parties in India):
- The combined value of assets of the enterprise being acquired (or the merged entity) in India exceeds INR 2,500 crore; OR
- The enterprise being acquired has assets in India exceeding INR 500 crore (applicable for acquisitions).
Turnover-Based Threshold (parties in India):
- The combined turnover in India of the enterprise being acquired exceeds INR 7,500 crore.
Global Thresholds (with India nexus):
- Combined worldwide assets exceed USD 1.25 billion, with at least INR 250 crore in Indian assets; OR
- Combined worldwide turnover exceeds USD 3.75 billion, with at least INR 750 crore in India.
De Minimis Exemption: Transactions where the target has assets below INR 450 crore in India or turnover below INR 1,250 crore in India are exempt from notification-unless the new Deal Value Threshold applies.
The Deal Value Threshold: The 2023 Amendment’s Most Significant Change
The most significant innovation of the Competition (Amendment) Act, 2023 is the introduction of a Deal Value Threshold (DVT) under a new Section 5(d). Under the DVT, CCI notification is mandatory where:
- The total value of the transaction exceeds INR 2,000 crore (approximately USD 238 million); AND
- The target has “substantial business operations in India” (SBOI).
The DVT captures high-value acquisitions of digital-economy, IP-heavy, or early-stage companies whose asset values are low (escaping traditional asset/turnover thresholds) but whose business operations in India are substantial. This is consistent with merger control reforms in Germany and the EU that introduced similar transaction value thresholds to capture nascent competition concerns.
Substantial Business Operations in India (SBOI) test:
- For general businesses: the target’s turnover in India exceeds INR 500 crore AND constitutes at least 10% of the target’s global turnover; OR the target’s GMV in India exceeds INR 500 crore AND constitutes at least 10% of global GMV.
- For digital service providers: the target’s annual average business users or end users in India are at least 10% of its global user base (an additional trigger, capturing large platforms with minimal revenue but enormous user presence in India).
The DVT became operative from September 10, 2024 and applies also to transactions signed before that date but not yet closed.
Green Channel: Immediate Deemed Approval
The Green Channel is the most significant procedure available for qualifying combinations-it enables immediate deemed approval upon filing with no substantive review period.
Eligibility: The transaction qualifies for the Green Channel if the parties (including their group entities) have no overlapping business activities:
- No horizontal overlap (neither party is a competitor of the other in the same product or geographic market)
- No vertical overlap (neither party is a supplier or customer of the other)
- No complementary relationship (neither party’s products or services complement the other’s such that customers typically buy both together)
If even a minor horizontal, vertical, or complementary relationship exists between any group entity of the acquirer and any business of the target, the Green Channel is not available, and a regular Form I or Form II filing is required.
How it works: The parties file the Green Channel notice with CCI. As soon as the filing is complete and accepted, the combination is deemed approved-there is no waiting period. This enables very fast closing for genuinely unrelated-business combinations.
Form I vs. Form II: Standard Review Timelines
For transactions that do not qualify for the Green Channel:
Form I (Short Form): Used for non-complex combinations that are unlikely to raise competition concerns-where the parties’ combined market share in any horizontal market is below 15%, or where vertical relationships exist but do not raise foreclosure concerns. CCI has 30 working days to pass an order from the date of complete filing. Most Form I filings are approved within this period.
Form II (Long Form): Used for complex transactions where the parties have significant horizontal overlaps (combined market share exceeding 15%), material vertical relationships, or where the combination may otherwise have an appreciable adverse effect on competition (AAEC). Form II attracts a 150 working day review period (approximately 7 months). This extended timeline materially affects deal structuring and closing date planning.
The filing fee for CCI is INR 20 lakh for Form I and INR 65 lakh for Form II (as of the current fee schedule).
Gun-Jumping: Severe Consequences
Section 6(2) prohibition: No combination exceeding Section 5 thresholds may take effect without prior CCI approval. Completing (or partially completing) a transaction before CCI approval is gun-jumping.
Consequences under Section 43A: The CCI may impose a penalty up to 1% of the higher of the combined turnover or the combined assets of the parties to the combination. For large transactions, this can amount to hundreds of crores.
Transaction voidability: The CCI has the power to direct that the combination be unwound or that modifications be made as a condition of approval. A combination completed without prior approval is deemed void under Section 6(1).
Procedural gun-jumping: Beyond completing legal ownership transfer, any pre-closing integration activities-sharing commercially sensitive information, coordinating pricing, or joint commercial activities-may also constitute gun-jumping. Parties should implement information barriers (clean team protocols) during the CCI review period.
Practical Timeline for M&A Transactions Requiring CCI Approval
Parties planning transactions that may require CCI notification should build the following into their deal timeline:
| Phase | Typical Duration |
|---|---|
| Filing preparation (information gathering, draft filing) | 2-4 weeks |
| CCI completeness check / initial queries | 1-2 weeks |
| Form I review period | 30 working days (~6-7 weeks) |
| Form II review period (if required) | 150 working days (~7 months) |
| Phase II investigation (in complex cases, very rare) | Additional time |
Parties often include a long-stop date in the SPA (the latest date by which all conditions precedent must be satisfied) that is set well beyond the anticipated CCI review period, to avoid the SPA expiring before CCI approval is obtained.
Key Takeaways
- The Competition (Amendment) Act, 2023 introduced a Deal Value Threshold of INR 2,000 crore: transactions exceeding this value with a target having substantial business operations in India require CCI notification regardless of asset or turnover size.
- Green Channel filing enables immediate deemed approval for transactions with no horizontal, vertical, or complementary business overlap.
- Gun-jumping under Section 6 of the Competition Act, 2002 attracts penalties up to 1% of combined turnover or assets and can render the combination void.
This article is for informational purposes only and does not constitute legal advice. Readers should seek appropriate professional counsel for their specific circumstances.
META TITLE: CCI Approval India: When Is Merger Notification Required?