September 25, 2023

India has emerged as a key overseas market for several global tech giants over the past decade as Meta, Google and Amazon aggressively jockey for the next and perhaps last big growth geography. Now the South Asian nation is trying to leverage its massive reach to influence M&A deals overseas.

New Delhi proposed amendments to the 2002 Competition Act on Friday to introduce a series of changes, including requiring the permission of the local watchdog (Competition Commission of India) for all overseas deals exceeding $252 million in value for companies with “significant business operations in India”.

India, the world’s second-largest internet market that has attracted tens of billions of dollars in investment from Meta, Google and Amazon and venture capitalists including SoftBank, Sequoia and Tiger Global, has traditionally vetted deals based on its size. asset and not the transaction value. According to law firm Shardul Amarchand Mangaldas, the Indian regulator has approved over 700 fillings in the past decade alone.

But things seem to be changing and trying to bring parity between India’s position with those of China, the US and Europe.

“There has been a significant growth of Indian markets and a paradigm shift in the way businesses operate over the past decade. In view of the economic growth, the emergence of various business models and the experience gained from the functioning of the Commission, the Government of India has constituted a Competition Law Review Commission to examine and recommend amendments to the said law. bill released Friday afternoon he said.

The Competition (Amendment) Bill 2022 has proposed the following changes:

(a) changes to certain definitions such as “business”, “relevant product market”, “Group”, “Control”, etc., for the sake of clarity;
(b) broadening the scope of anti-competitive agreements and including a party facilitating an anti-competitive horizontal agreement within those agreements;
c) provisions to reduce the deadline for approval of combinations from two hundred and ten days to one hundred and fifty days and formation of a prima facie opinion by the Commission within twenty days for rapid approval of combinations;
(d) provisions on “value of the transaction” as another criterion for the notification of combinations to the Commission;
(e) a three-year time limit for submitting information on anti-competitive agreements and abuse of a dominant position to the Commission;
(f) appointment of the Director General by the Commission with the prior approval of the Central Government.
(g) introducing a settlement and commitment framework to reduce disputes.
(h) incentivizing parties to an ongoing collusion investigation with lesser penalty terms to disclose information about other cartels;
(i) substituting a provision providing for a fine which may extend to rupees one crore or imprisonment for a term which may extend to three years or both in case of contravention of any provision of the National Company Appellate Tribunal with a provision for contempt;
j) issuing guidelines, including sanctions to be imposed by the Commission.

The move comes at a time when bankers in India are brokering a record number of mergers and acquisitions, even as deal activity slows elsewhere. India saw more than $82 billion worth of deals completed or seeking approval in the quarter ended June, according to Bloomberg. India’s trade flow is projected to increase further.

“India is a hugely important market for sovereign wealth funds, private equity and global pension funds, which are playing an increasingly important role in the number of M&A transactions taking place right now,” said Kaustubh Kulkarni, head of investment banking in India for JP Morgan. and Southeast Asia, in a recent television interview.

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