CCI Merger Approval & Deal Value Threshold (Section 5 & 6, Competition Act)

By Priya Sharma | Updated March 2026

What Is CCI Merger Approval?

CCI merger approval is the mandatory pre-transaction clearance required under Sections 5 and 6 of the Competition Act, 2002 when a merger, acquisition, or amalgamation (collectively, a "combination") exceeds prescribed asset, turnover, or deal value thresholds. The Competition Commission of India (CCI) reviews whether the combination is likely to cause an appreciable adverse effect on competition (AAEC) in India. No notifiable combination can be consummated — entirely or in part — without CCI approval.

For foreign investors acquiring Indian targets, CCI merger control is often the gating regulatory approval. India's regime is suspensory — meaning the transaction cannot close until CCI either approves it or the statutory review period expires. Since the September 2024 overhaul, which introduced a deal value threshold (DVT) of INR 2,000 crore and narrowed exemptions, more cross-border foreign investment transactions now require CCI filing than ever before.

Historically, the CCI has approved approximately 97% of combinations without conditions. Between July 2024 and May 2025, the CCI reviewed 124 combinations, of which 12 were notified solely on the basis of the new deal value threshold. To date, no combination has been blocked outright, though several have been approved with conditions (most notably the INR 70,352 crore Reliance-Disney media merger in 2024).

Legal Basis

• Section 5 of the Competition Act, 2002 — Defines "combination" by prescribing asset and turnover thresholds at enterprise and group levels, both for India and worldwide. As amended by the Competition (Amendment) Act, 2023, it now also includes the deal value threshold.
• Section 6 of the Competition Act, 2002 — Prohibits combinations that cause or are likely to cause an AAEC within India. Requires mandatory pre-notification of combinations exceeding Section 5 thresholds.
• Competition (Amendment) Act, 2023 — Introduced the deal value threshold (Section 5(d)), expanded the definition of "control" to include "material influence," and reduced the overall review timeline from 210 to 150 calendar days.
• CCI (Combinations) Regulations, 2024 — New regulations effective September 10, 2024, replacing the 2011 regulations. Prescribe Form I (short form), Form II (long form), the green channel route under Regulation 5A, and detailed filing requirements.
• MCA Notification dated September 10, 2024 — Notified the DVT provisions, de minimis exemption thresholds, and revised filing fees.
• Section 43A of the Competition Act, 2002 — Provides for penalties of up to 1% of total turnover or assets (whichever is higher) for gun-jumping (consummating a transaction without CCI approval).

Combination Thresholds: When Must You File?

A transaction is a notifiable "combination" if it meets any one of the following thresholds. Meeting just one — not all — triggers the filing requirement.

Asset and Turnover Thresholds (Section 5(a)–(c))

De Minimis Exemption

Even if the above thresholds are met, no filing is required if the target enterprise has:

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

However, the de minimis exemption does not apply if the deal value threshold is triggered — meaning a transaction worth INR 2,000 crore or more requires filing even if the target has negligible Indian turnover/assets.

Deal Value Threshold (Section 5(d)) — New from September 2024

The most significant change to India's merger control regime requires CCI notification when:

• The deal value exceeds INR 2,000 crore (~USD 238 million), including all direct, indirect, immediate, and deferred consideration, AND
• The target has substantial business operations (SBO) in India

The SBO test is met if:

The DVT was specifically designed to catch acquisitions of digital platforms and startups that have large user bases but limited revenue in India — transactions that previously escaped the traditional asset/turnover thresholds.

Filing Process: Form I, Form II, and Green Channel

Form I (Short Form Notification)

Used for the majority of filings. Requires basic information about the parties, the transaction structure, and market shares. Appropriate when the parties have limited overlap in India. Filing fee: INR 30 lakh (increased from INR 20 lakh effective September 2024).

Form II (Long Form Notification)

Required for complex transactions with significant horizontal or vertical overlaps, or where the CCI may have competition concerns. Includes detailed market definitions, competitive assessment, and efficiency justifications. Filing fee: INR 90 lakh (increased from INR 65 lakh effective September 2024). The CCI can also require parties to convert a Form I filing to Form II during review.

Green Channel Route (Regulation 5A)

Introduced in 2019 and revised in September 2024, the green channel allows automatic approval on the date of notification for combinations where the parties (and their group entities and affiliates) have zero horizontal, vertical, or complementary overlaps in India. The 2024 regulations expanded the definition of "affiliate" to include entities with 10% or more shareholding/voting rights, board representation, or access to commercially sensitive information — making eligibility narrower than before.

If the CCI later determines that the green channel notification contained a material misrepresentation about overlaps, it can declare the approval void ab initio and impose penalties. In June 2025, the CCI penalised CA Plume Investments and Bequest Inc. INR 10 lakh for filing a green channel notice while having overlaps.

Review Timeline

The overall timeline was reduced from 210 to 150 calendar days by the Competition (Amendment) Act, 2023. In practice, uncontested Form I filings are cleared in 25–30 working days. Complex Form II cases with Phase II investigation can take 5–8 months including clock stops.

Gun-Jumping: Penalties for Premature Closing

Consummating a notifiable combination — or any part of it — before obtaining CCI approval constitutes gun-jumping under Section 43A. This includes implementing integration steps, transferring employees, combining sales teams, or exercising shareholder rights before clearance.

Key penalty data:

• Maximum penalty: 1% of total turnover or total assets, whichever is higher, of the combination
• Highest penalty imposed: INR 200 crore (approximately USD 24 million) — Amazon/Future Retail case, which also involved material non-disclosure
• Typical penalty range: INR 5 lakh to INR 5 crore for procedural gun-jumping (late filing or implementation before approval)
• Cases to date: CCI has imposed gun-jumping penalties in approximately 59 cases

Gun-jumping risk is particularly high for foreign acquirers accustomed to signing-to-closing timelines of 30–60 days. Common triggers include pre-closing integration planning that goes beyond permissible limits, or exercising board appointment rights before CCI clearance.

Notable CCI Merger Decisions (2024–2025)

The Reliance-Disney merger is the most significant conditional approval in Indian merger control history. The CCI required divestment of channels including Hungama and Super Hungama, and imposed behavioural remedies around cricket broadcasting rights pricing — reflecting heightened scrutiny of media concentration.

How This Affects Foreign Investors in India

Foreign acquirers of Indian targets face several CCI-specific considerations:

• DVT catches asset-light acquisitions: Before September 2024, acquiring an Indian tech startup (private limited company) with INR 200 crore turnover did not require CCI filing. Now, if the deal value exceeds INR 2,000 crore, filing is mandatory regardless of the target's size — directly targeting PE/VC acquisitions of high-growth startups via CCPS or equity.
• Group-level threshold calculation: The worldwide assets and turnover of the acquirer's entire corporate group count toward the Section 5 thresholds. A large multinational acquiring a small Indian company may trigger filing solely because of the group's global footprint.
• Parallel regulatory approvals: CCI approval runs alongside other conditions precedent — FEMA compliance, sectoral cap verification, and NCLT sanction for SPV restructurings. Factor the CCI timeline into the overall deal calendar.
• No exemption for intra-group restructuring: Internal restructurings (e.g., merging two Indian subsidiaries of the same foreign parent) may still trigger CCI filing if thresholds are met, unless the de minimis exemption applies.

Common Mistakes

• Relying on the de minimis exemption without checking the deal value threshold. The de minimis exemption (target assets below INR 450 crore or turnover below INR 1,250 crore) does not apply when the DVT is triggered. A foreign PE fund acquiring a small Indian SaaS company for USD 300 million must file even if the target has INR 100 crore in revenue.
• Filing on the green channel without rigorously verifying zero overlaps across all affiliates. The 2024 regulations expanded "affiliate" to include entities with just 10% shareholding or board observer rights. A large conglomerate's portfolio companies may have overlooked overlaps. False green channel filings result in void ab initio approval and penalties.
• Underestimating the extraterritorial reach of Indian merger control. Two foreign companies merging outside India must still notify the CCI if the combined entity or group breaches India thresholds. The CCI has actively pursued notifications from purely overseas transactions with Indian nexus.
• Commencing integration activities before CCI clearance. Appointing directors to the target's board, sharing competitively sensitive information beyond what's needed for due diligence, or combining sales teams before CCI approval constitutes gun-jumping. The INR 200 crore Amazon/Future penalty demonstrates the CCI's willingness to impose severe fines.
• Filing Form I when Form II is clearly required. If the parties have significant horizontal overlaps (combined market share above 15%) or vertical relationships, filing Form I risks a conversion request from the CCI — adding 4–6 weeks to the timeline. Assess form selection carefully with Indian competition counsel.

Practical Example

NovaTech Inc. (US, annual global revenue USD 4 billion) is acquiring CloudBridge Technologies Pvt Ltd, an Indian cloud infrastructure startup (DPIIT-recognised) with INR 300 crore annual revenue, INR 80 crore assets in India, and 2 million business users in India (15% of global users). The acquisition price is INR 2,800 crore (approximately USD 334 million).

Threshold analysis:

• Enterprise-level: CloudBridge's India assets (INR 80 crore) and turnover (INR 300 crore) fall below the enterprise thresholds (INR 2,500 crore assets / INR 7,500 crore turnover). No filing required on this basis.
• De minimis: CloudBridge's India assets (INR 80 crore) are below INR 450 crore, and turnover (INR 300 crore) is below INR 1,250 crore. De minimis exemption would normally apply.
• Deal value threshold: The deal value of INR 2,800 crore exceeds INR 2,000 crore. Does CloudBridge have SBO in India? Its Indian users (2 million) represent 15% of global users — exceeding the 10% digital sector SBO threshold. CCI filing is mandatory despite the de minimis exemption.

Filing approach: NovaTech and CloudBridge file a Form I notification (INR 30 lakh fee) with support from Indian company secretary counsel since NovaTech has no existing cloud infrastructure operations in India — no horizontal overlap. They consider the green channel but NovaTech's affiliate portfolio includes a small Indian IT services company that could have a complementary overlap, so they opt for standard Form I.

Timeline: CCI clears the transaction in 28 working days (Phase I) with no conditions. Total elapsed time from filing to clearance: approximately 6 weeks.

If NovaTech had closed without filing: Gun-jumping penalty of up to 1% of the combined turnover — potentially USD 40 million based on NovaTech's global revenue. The CCI could also unwind the transaction.

Key Takeaways

• CCI merger approval is mandatory and suspensory — no notifiable combination can close without clearance or expiry of the 150-day review period
• The deal value threshold of INR 2,000 crore (September 2024) catches acquisitions of asset-light startups that previously escaped filing requirements
• De minimis exemption (target assets below INR 450 crore or turnover below INR 1,250 crore) does not apply when the DVT is triggered
• Green channel allows same-day approval for zero-overlap transactions, but the expanded affiliate definition makes eligibility harder to establish
• Gun-jumping penalties can reach 1% of total turnover/assets — the highest penalty to date is INR 200 crore (Amazon/Future)
• Approximately 97% of combinations are approved without conditions; no combination has been blocked to date

Structuring an acquisition of an Indian target? Beacon Filing provides CCI filing support, threshold analysis, and regulatory approval coordination for cross-border M&A transactions.