CCI (Competition Commission) Approval for Foreign Acquisitions: Thresholds & Process

Why CCI Approval Matters for Foreign Acquirers

Every cross-border acquisition involving an Indian target — whether a direct purchase of shares, an asset acquisition, or an indirect offshore merger where the target group has Indian operations — must be evaluated against India's merger control regime before closing. The Competition Commission of India (CCI) administers this regime under the Competition Act, 2002 (as amended in 2023), and non-compliance carries penalties of up to 1% of the total turnover, assets, or deal value, whichever is highest.

India's merger control framework is both mandatory and suspensory. This means that if a transaction meets the prescribed jurisdictional thresholds, the parties cannot close — in full or in part — until either the CCI grants approval or 150 days elapse from the date of a valid filing. Closing without approval, even inadvertently, constitutes gun-jumping and triggers enforcement action.

For foreign companies evaluating acquisitions in India, understanding these thresholds and processes is not optional — it is a deal-critical compliance requirement that directly affects transaction timelines, deal certainty, and regulatory risk.

What Constitutes a "Combination" Under Indian Law

The Competition Act defines a "combination" broadly to capture any acquisition of shares, voting rights, assets, or control, as well as mergers and amalgamations, that meet prescribed financial thresholds. The definition is intentionally wide — it covers direct acquisitions, indirect acquisitions through offshore holding structures, creeping acquisitions, and even certain joint venture formations.

Types of Transactions Covered

• Share acquisitions: Any acquisition of shares or voting rights that crosses the prescribed thresholds, whether in a single transaction or through a series of linked transactions
• Asset acquisitions: Purchase of business assets, divisions, or undertakings that meet the threshold criteria
• Mergers and amalgamations: Court or tribunal-approved schemes of arrangement under the Companies Act, 2013, or cross-border mergers under the Companies (Compromises, Arrangements and Amalgamations) Rules
• Acquisitions of control: Transactions that result in the acquirer gaining "control" — defined broadly as the ability to exercise material influence over management, policy decisions, or strategic commercial behaviour
• Indirect acquisitions: Offshore transactions where the target group has assets, turnover, or substantial business operations in India that exceed the prescribed thresholds

Jurisdictional Thresholds: The Numbers That Trigger Filing

As revised effective March 7, 2024, the CCI's merger control regime uses three distinct threshold tests. A transaction must be notified if it meets any one of these three tests.

Test 1: Enterprise-Level Thresholds (Indian Nexus)

Test 2: Group-Level Thresholds (Global + Indian Nexus)

Test 3: Deal Value Threshold (DVT)

Introduced effective September 10, 2024, the DVT captures transactions where the deal value exceeds INR 2,000 crore (approximately USD 240 million) and the target enterprise has "substantial business operations" in India. This threshold was specifically designed to catch high-value acquisitions of asset-light companies — particularly in the digital and technology sectors — that might escape the traditional asset/turnover tests.

For the DVT, "deal value" includes all forms of consideration: direct, indirect, immediate, deferred, contingent, and non-compete payments. "Substantial business operations" in India means the target's Indian turnover or gross merchandise value exceeds 10% of global turnover/GMV and is above INR 500 crore.

The De Minimis Exemption: When Filing Is Not Required

Not every transaction that meets the party-level or group-level thresholds requires CCI notification. The de minimis exemption provides relief when the target enterprise is small relative to the overall market.

A transaction is exempt from notification if the target enterprise has:

• Assets in India of less than INR 450 crore, AND
• Turnover in India of less than INR 1,250 crore

Both conditions must be satisfied simultaneously for the exemption to apply. If the target exceeds either threshold, the transaction is notifiable.

Critical limitation: The de minimis exemption does not apply to transactions that are notifiable under the Deal Value Threshold. If a transaction exceeds the INR 2,000 crore DVT and the target has substantial business operations in India, the parties must file regardless of the target's asset or turnover size.

Filing Process: Form I vs Form II

CCI notifications are submitted through two forms, depending on the complexity of the transaction and the competitive landscape.

Form I (Short Form)

Form I is the standard filing form used for the vast majority of transactions. It is appropriate when there are no significant horizontal overlaps, vertical relationships, or complementary activities between the parties. The filing fee is INR 30 lakh (approximately USD 36,000).

Form I requires disclosure of:

• Details of the parties and the transaction structure
• Market definitions and market shares for overlapping products/services
• Vertical and complementary relationships between the parties
• Copies of the definitive agreement, board resolutions, and valuation reports

Form II (Long Form)

Form II is required when the parties have significant overlapping activities in India — typically when combined market shares exceed 15% in any relevant market for horizontal overlaps, or 25% for vertical relationships. The filing fee is INR 90 lakh (approximately USD 108,000).

Form II demands substantially more information: detailed market analyses, competitor identification, customer and supplier data, entry barrier assessments, and efficiency justifications. It is analogous to a Phase II investigation filing in European merger control.

Which Form to Use?

Most cross-border acquisitions involving foreign acquirers and Indian targets can be filed under Form I, particularly where the foreign acquirer does not have existing operations in India that overlap with the target's business. However, if the CCI determines that Form I provides insufficient information, it may direct the parties to re-file under Form II — a scenario that adds 4-8 weeks to the timeline.

The Green Channel: Same-Day Deemed Approval

The Green Channel route, introduced in 2019, provides an expedited approval mechanism for transactions that raise no competitive concerns. Under this route, the CCI issues an acknowledgment — which constitutes deemed approval — on the same day as filing.

Eligibility Criteria

The Green Channel is available when the parties to the combination have no horizontal overlaps, no vertical relationships, and no complementary activities in India. The notifying party must file a valid and complete Form I along with a declaration confirming that the transaction satisfies the Green Channel criteria.

CCI's Post-Filing Review

While approval under the Green Channel is deemed upon acknowledgment, the CCI retains the right to revoke the deemed approval within a prescribed period if it subsequently discovers that the parties have horizontal, vertical, or complementary overlaps. As a result, the declaration of no overlaps must be prepared with care and supported by thorough internal analysis. Inaccurate Green Channel declarations expose the parties to penalties and potential unwinding of the transaction.

Review Timeline: From Filing to Clearance

The Competition (Amendment) Act, 2023 significantly shortened the CCI's review timeline:

In practice, the CCI resolves most Form I filings within 30-45 days. Form II filings and complex transactions with competitive overlaps may take 90-150 days. The 2023 amendments have materially improved review speed compared to the earlier 210-day timeline.

Cross-Border Considerations for Foreign Acquirers

Foreign companies acquiring Indian targets face several unique considerations under the CCI merger control regime:

Indirect Acquisitions

A global merger between two foreign entities — where the target's group has Indian subsidiaries, branch offices, or joint ventures — can trigger CCI filing requirements if the Indian operations meet the jurisdictional thresholds. The most common scenario involves a US or European acquirer purchasing a global company that happens to have an Indian subsidiary. Even if the Indian operations are immaterial to the overall deal, the CCI filing obligation applies if thresholds are met.

Multi-Jurisdictional Filing Coordination

Cross-border transactions frequently require simultaneous merger control filings in multiple jurisdictions — EU, US (HSR), India, and others. The CCI's 150-day review timeline must be coordinated with these parallel filings. Since India's regime is suspensory, the transaction cannot close globally if the Indian filing is still pending. This often makes the CCI filing a long-pole in the transaction timeline.

Timing of Filing

CCI notification can be made at any point after the execution of the binding agreement (for acquisitions) or approval of the merger proposal by the board of directors (for mergers). There is no mandatory waiting period before filing, and early filing is advisable to avoid the CCI timeline becoming a bottleneck.

FEMA and FDI Compliance

CCI approval is just one of several regulatory approvals required for a foreign acquisition. Depending on the sector and structure, the transaction may also require compliance with FEMA pricing guidelines, FC-GPR filing with the RBI, sector-specific approvals (such as SEBI for listed targets), and possibly government approval route clearance if the target operates in a restricted sector. Our FDI advisory service covers the full spectrum of regulatory requirements for cross-border acquisitions.

Penalties for Non-Compliance

The consequences of failing to notify a notifiable combination — or closing before receiving CCI approval — are severe:

Section 43A: Penalty for Non-Notification

The CCI may impose a penalty of up to 1% of the total turnover, total assets, or the value of the transaction, whichever is highest. For large cross-border deals, this penalty can amount to hundreds of crores of rupees.

Section 44: Penalty for Gun-Jumping

Consummating a notifiable combination before receiving CCI approval (or the expiry of the 150-day period) constitutes gun-jumping. The CCI can order the parties to unwind the transaction, divest acquired shares or assets, and impose separate penalties.

Section 45: Penalty for False or Misleading Information

Providing false or incomplete information in the notification — including inaccurate Green Channel declarations — carries a penalty of INR 5 crore to INR 25 crore, depending on the nature and severity of the misrepresentation.

The CCI has actively enforced these penalty provisions. In 2024-2025, the CCI imposed penalties in multiple cases involving delayed notifications and inaccurate Green Channel filings, signalling a low tolerance for procedural non-compliance.

Sector-Specific Considerations for Foreign Acquisitions

Certain sectors attract heightened CCI scrutiny, particularly where the Indian market is concentrated or the acquisition involves a significant market player:

Technology and Digital Markets

The introduction of the DVT was specifically motivated by acquisitions in the digital sector where the target has high user engagement and strategic value but limited turnover. Foreign tech companies acquiring Indian startups or digital platforms should carefully evaluate whether the DVT is triggered, even if traditional asset/turnover thresholds are not met.

Pharmaceuticals

The CCI has historically scrutinised pharmaceutical acquisitions closely, given the concentrated nature of certain therapeutic segments and the impact on drug pricing. Horizontal overlap analysis in pharma transactions must be conducted at the molecule level, not just at the broad therapeutic category.

Financial Services

Acquisitions in banking, insurance, and financial services require CCI approval in addition to sector-specific regulatory approvals from the RBI, IRDAI, or SEBI. The CCI's assessment runs in parallel with — not sequential to — these sector regulators.

Manufacturing and Industrial

Industrial acquisitions involving overlapping product markets in India require detailed market definition analysis. The CCI defines relevant markets narrowly, and even moderate market shares in a narrowly defined market can trigger a Phase II investigation. Foreign manufacturers acquiring Indian competitors should prepare a robust competitive assessment upfront.

Practical Tips for Foreign Acquirers

1. Conduct a CCI Filing Assessment Early

Before signing a definitive agreement, assess whether the transaction is notifiable to the CCI. This assessment should be conducted during due diligence and its findings incorporated into the transaction timeline and conditions precedent.

2. Build CCI Timelines into the Deal Structure

Include a CCI approval condition precedent in the acquisition agreement with a long-stop date that accommodates the 150-day maximum review period. For complex transactions, a long-stop date of 6-9 months from signing is prudent.

3. Prepare Overlap Analysis Before Filing

The quality of the market overlap analysis submitted with the notification directly affects the review timeline. Incomplete or inconsistent market data triggers CCI queries, which can extend the review by weeks. Invest in thorough competitive analysis upfront.

4. Consider Pre-Filing Consultations

The CCI permits pre-filing consultations (PFCs) — informal, confidential meetings with CCI staff to discuss jurisdictional questions, market definition issues, and potential competitive concerns. PFCs are particularly useful for complex cross-border transactions and can help identify potential issues before the formal filing.

5. Coordinate Multi-Jurisdictional Filings

For transactions requiring filings in multiple jurisdictions, coordinate the filing strategy to avoid the CCI becoming the timeline bottleneck. Given that the CCI's review period starts from the date of a valid and complete filing, submit the Indian notification as early as possible in the transaction process.

CCI Remedies: Conditions and Modifications

If the CCI identifies competition concerns, it may approve the combination subject to conditions (remedies) rather than blocking the transaction outright. Common remedies include:

• Structural remedies: Divestiture of overlapping business units, brands, or product lines
• Behavioural remedies: Commitments on pricing, non-discrimination, or continued supply to competitors
• Hybrid remedies: A combination of structural and behavioural conditions

The CCI has issued remedy orders in several high-profile transactions, including cases involving global pharmaceutical mergers with Indian market overlaps and technology platform acquisitions. For a broader understanding of M&A deal structuring in India, including regulatory planning, see our detailed glossary entry.

Recent Developments: 2025 CCI FAQs on Combinations

On May 20, 2025, the CCI published revised FAQs on combinations to provide interpretive guidance on the overhauled merger control regime. Key clarifications include:

• Deal value computation: Detailed guidance on how to calculate the INR 2,000 crore DVT, including the treatment of deferred consideration, earn-outs, and non-compete payments
• Substantial business operations: Clarification on the 10% global turnover/GMV test and the INR 500 crore Indian turnover threshold for DVT applicability
• Open offers and stock exchange acquisitions: Confirmation that open offers under the SEBI Takeover Code and stock exchange acquisitions may be completed before CCI approval, subject to specific conditions
• Group definitions: Updated guidance on how to compute group-level thresholds where the acquirer is part of a complex corporate structure

These FAQs are not legally binding but represent the CCI's official interpretive position and are relied upon by practitioners when structuring transactions.

Key Takeaways

• India's merger control regime is mandatory and suspensory — closing a notifiable transaction without CCI approval is illegal and carries penalties of up to 1% of turnover, assets, or deal value
• Three threshold tests apply: enterprise-level asset/turnover thresholds (INR 450 crore assets / INR 1,250 crore turnover for the target), group-level global thresholds, and the new deal value threshold of INR 2,000 crore
• The Green Channel provides same-day deemed approval for transactions with no horizontal, vertical, or complementary overlaps
• Review timelines have improved — most Phase I reviews conclude within 30-45 days, with a maximum of 150 days before deemed approval
• Foreign acquirers must coordinate CCI filings with parallel FEMA compliance, sector-specific approvals, and multi-jurisdictional merger control requirements