Indian Merger Control In 2025: Key Developments For Dealmakers

With more than 135 notifications being filed with the Competition Commission of India (CCI), 2025 was a particularly active period for merger control in India. It was the first full year under the revamped merger control framework introduced in late 2024, and the year witnessed the CCI rigorously applying the revised procedural and substantive standards. The CCI also issued guidance through its non-binding FAQs on Combinations, released in May 2025 (Combination FAQs), which provided much-needed clarity on critical issues such as the applicability of deal value thresholds and the assessment of control.

Against this backdrop of evolving jurisprudence, this article dissects the defining themes emerging from the CCI's and Indian courts' landmark decisions in 2025 that are set to influence not only the trajectory of the Indian merger control regime but also the strategies and structures adopted by businesses navigating complex transactions in the years ahead.

1. Supreme Court redefines the nexus between Competition Law and Insolvency Regime

In a landmark split verdict delivered on 29 January 2025 in the insolvency proceedings of Hindustan National Glass and Industries Ltd. (HNGIL), the Supreme Court of India (Supreme Court) decisively clarified the interface between the Insolvency and Bankruptcy Code, 2016 (IBC) and the Competition Act, 2002 (Competition Act). By a 2:1 majority, the Supreme Court held that CCI approval of a proposed combination must precede the Committee of Creditors' (CoC) approval of a resolution plan, as mandated under the proviso to Section 31(4) of the IBC. Rejecting arguments favoring a purposive, post-CoC approval approach, the Supreme Court adopted a strict literal interpretation of "prior to," emphasizing that deviation could render CoC decisions commercially futile if the CCI subsequently modifies or rejects the combination. The judgment underscores that only resolution plans compliant with all laws "for the time being in force" can be placed before the CoC, ensuring that combinations with the potential for an appreciable adverse effect on competition are subject to scrutiny before approval.

In practice, the decision has already had tangible ramifications – to date, the CCI has approved five combination filings arising from the ongoing corporate insolvency resolution process of Jaiprakash Associates Limited.¹ The key takeaways for legal practitioners and companies are unambiguous – competition law approval must be integrated into the earliest stages of resolution planning, with careful sequencing and procedural compliance, including active engagement with the target. Failure to do so can result in fatal defects that jeopardize the validity of resolution outcomes.

In the aforesaid background, the Insolvency and Bankruptcy Code (Amendment) Bill, 2025 (2025 IBC Amendment Bill) was introduced in the Lok Sabha on 12 August 2025. It proposes to amend the proviso to Section 31(4) of the IBC so that a resolution applicant is required to obtain the prior approval of the CCI before the resolution plan is submitted to the Adjudicating Authority (and not the CoC) for its approval.²

2. Expanded contours of overlap assessment

One of the most consequential developments in Indian merger control in 2025 has been the CCI's recalibration of the analytical framework governing the assessment of horizontal overlaps as well as vertical or complementary relationships, whether existing or potential, between the parties' business activities, from the earlier, more entity-specific approach towards a broader, Ultimate Controlling Person (UCP)-centric framework.

Historically, the overlap assessment exercise was undertaken on a relatively narrow and fragmented basis. On the target side, overlaps were examined only with reference to the target entity itself and those of its downstream entities that crossed the prescribed Old Materiality Thresholds.³ On the acquirer side, the scope of analysis extended to: (i) the acquirer; (ii) entities upstream in the ownership chain of the acquirer that satisfied the Old Materiality Thresholds; and (iii) entities controlled by the controlling entity of the acquirer, as well as the acquirer itself, where such thresholds were met.

In a major overhaul, codified under Rule 3 of the Competition (Criteria of Combination) Rules, 2024 and, further clarified under the Combination FAQs, the analytical focus has decisively shifted to the UCP, with overlaps required to be assessed across the entire economic group attributable to such UCP, subject to the Revised Materiality Thresholds.⁴ Specifically, the CCI now requires parties to consider overlaps between: (i) the acquirer, together with its UCP, the controlled entities of the UCP, affiliates of the UCP, affiliates of controlled entities of the UCP, and controlled entities of affiliates of the UCP, on one hand; and (ii) the target, together with its downstream controlled entities, its affiliates, affiliates of its controlled entities, and controlled entities of its affiliates, on the other hand. As a result, combinations that may have qualified for streamlined review earlier, particularly under the Green Channel Route (defined below), now warrant substantially more granular diligence.

Importantly, although this UCP-led framework has been discussed in the Combination FAQs under the specific rubric of "management fund activities" and, on its face, appeared to be tailored to investment fund structures such as private equity funds, sovereign wealth funds and pension funds, the CCI's decisional practice in 2025 indicates that this approach is not confined to financial investors alone. In practice, the CCI has applied the same uniformly across investor categories, including strategic acquirers. For instance, in a transaction involving Allison Transmission Holdings, Inc.'s acquisition of sole control over Dana Incorporated's off-highway business, the overlap analysis extended beyond the immediate transacting parties and their affiliates to further include the business activities of the relevant controlled entities of the affiliates of the Allison group (i.e., the acquirer group), illustrating the breadth of the UCP-centric approach.

3. CCI issues first conditional merger approval in Phase II since 2019

In its first approval following a Phase II investigation since 2019, the CCI approved the acquisition of 100% of the shareholding of AAM India Manufacturing Private Limited (AAM) by Bharat Forge Limited (BFL), subject to extensive behavioral remedies.

In this case, the CCI identified substantial horizontal overlaps between AAM and certain BFL joint ventures (BFL JVs) in the broader market for axles for commercial vehicles and the narrower market for axles for medium and heavy commercial vehicles. Key factors influencing the competitive assessment included high combined market shares of the parties, frequent competition for the original equipment manufacturer customers, and significant barriers to entry, including extended product development timelines and sunk investments. Following a show-cause notice, BFL proposed voluntary commitments, which were refined during the detailed Phase II investigation.

Approval was ultimately granted on the condition of a comprehensive seven-year hold-separate arrangement, ensuring competitive independence between AAM and BFL JVs. The remedy mandates separate management, branding, sales teams, pricing strategies, and bidding processes, with a strict prohibition on joint marketing or coordinated customer engagement. To safeguard commercially sensitive information, the order prescribes IT ring-fencing, robust non-disclosure agreements, periodic compliance audits, and structured competition compliance programmes overseen by an appointed compliance officer. Additional obligations include neutralizing conflicting JV rights and formally notifying customers and vendors, with compliance monitored by an independent agency reporting to the CCI.

This order is significant not only for its outcome, but also for the depth of the remedial architecture and, the CCI's proactive stakeholder engagement (both prior to forming its prima facie opinion and during the Phase II public consultation). It also reflects the CCI's willingness to clear transactions raising serious competition concerns through carefully calibrated, long-term behavioral commitments rather than structural remedies.

4. Consistent scrutiny of deemed approvals under the Green Channel Route

The green channel framework, introduced by the CCI in 2018, enables deemed approval of combinations where there are no horizontal, vertical, or complementary overlaps between the business activities of the parties (Green Channel Route). While such transactions are formally cleared on the date of filing without an ex-ante review, the CCI has consistently emphasized that these filings remain subject to post-clearance scrutiny, to verify both the accuracy of declarations and continued eligibility for this expedited route.

This approach was reaffirmed in the CCI's recent order concerning the acquisition of up to 32.77% in Quest Global Services Pte. Ltd. (Quest) by CA Plume Investments and Bequest Inc. (Acquirers), both affiliated with the Carlyle Group. The combination was notified to the CCI under the Green Channel Route on 23 October 2023 and was deemed approved on the same day. During its post-clearance review, the CCI identified potential horizontal, vertical, and complementary linkages between certain portfolio entities of the parties and sought clarifications. While the Acquirers' response indicated no horizontal overlaps, the CCI formed a prima facie view that the offerings of the parties appeared complementary, notwithstanding counter submissions that Quest's product engineering and ER&D services were not "essential" inputs for customers of the Acquirers' entities.

In response to a show cause notice issued by the CCI, the Acquirers ultimately acknowledged inadvertent lapses in their initial overlap assessment, tendered an unconditional apology, and offered to re-file the notice in the appropriate form, emphasizing the absence of any intent to misrepresent and the lack of competitive harm. Finally, the CCI held that the transaction did not qualify for the Green Channel Route, declared the deemed approval void ab initio, and found a contravention of Sections 43A and 44 of the Competition Act. However, considering the mitigating factors, including voluntary disclosure and cooperation, the CCI imposed a penalty of only INR 4 lakhs and directed the Acquirers to file a fresh notification.

The order is significant in reinforcing the high compliance threshold applicable to filings under the Green Channel Route, particularly in specialized and innovation-driven sectors, while also demonstrating the CCI's willingness to calibrate penalties based on bona fide conduct and corrective engagement by notifying parties.

5. CCI's zero-tolerance enforcement posture in gun-jumping cases

The merger control regime in India is a mandatory and suspensory regime. Any transaction that is notifiable to the CCI cannot be consummated (in whole or in part, in form or in substance) until CCI approval is obtained. In 2025, the CCI continued to impose penalties for violation of standstill obligations and premature consummation of notifiable transactions.

For instance, the CCI imposed a penalty of INR 40 lakhs on Goldman Sachs (India) Alternative Investment Management Private Limited (Goldman Sachs), for failing to notify its subscription to optionally convertible debentures issued by Biocon Biologics Limited (Biocon). Although the resulting equity exposure was limited to 3.81%, the CCI held that the transaction was notifiable due to the rights acquired by Goldman Sachs, in particular, access to the minutes of the board meetings of Biocon, which would allow Goldman Sachs access to all commercially sensitive information discussed during Biocon's board meetings. Additionally, given the strategic nature of the rights being acquired, the CCI did not accept Goldman Sachs' contention that the acquisition was made to benefit from short term price movements (i.e., in the ordinary course of business).

In a separate order dated 31 July 2025, the CCI imposed a penalty of INR 20 lakhs on Manipal Health Systems Private Limited (Manipal) for part-consummating a notifiable transaction prior to filing, in connection with its acquisition of shares in Aakash Educational Services Limited (Aakash). The transaction involved the conversion of Aakash's debentures into 39.61% equity on 22 January 2024, whereas the notification to the CCI was filed only on 9 May 2024. While Manipal argued that the conversion was triggered by Aakash's default and undertaken to preserve the company as a going concern, the CCI rejected this defense, holding that commercial exigency does not override statutory standstill obligations.

Taken together, these decisions underscore the CCI's zero-tolerance stance on gun-jumping. Parties should conduct early and granular merger control assessments, particularly in structured finance and hybrid investment transactions.

6. Reaffirming CCI's merger control jurisdiction in regulated sectors

The jurisdictional interface between the CCI and sectoral regulators (such as the Telecom Regulatory Authority of India and the Controller of Patents) has long been a contested issue in Indian competition law enforcement. This was brought sharply into focus in the context of merger control when the CCI's order dated 14 January 2025 examined Torrent Power Limited's (Torrent) acquisition of a 51% shareholding in Dadar and Nagar Haveli and Daman and Diu Power Distribution Corporation Limited – a transaction consummated without prior notification to the CCI.

In response to a show cause notice issued by the CCI, Torrent argued that while the transaction was notifiable to the CCI, it fell exclusively within the regulatory ambit of the Electricity Act, 2003 (Electricity Act), asserting that: (i) Section 60 of the Electricity Act empowered the Joint Electricity Regulatory Commission to address combinations and anti-competitive conduct arising out of the Electricity Act; and (ii) as a later and special statute, the Electricity Act prevailed over the Competition Act.

Rejecting these submissions, the CCI reaffirmed that the Competition Act and the Electricity Act are special statutes with distinct and complementary objectives, operating in mutually exclusive regulatory domains. While the Electricity Act governs sector-specific matters such as tariffs, licensing, and technical standards, the Competition Act establishes a comprehensive and cross-sectoral framework for regulating combinations based on their effects on competition, including in regulated industries such as electricity distribution. The CCI accordingly held that Torrent had failed to comply with its mandatory notification obligation under the Competition Act.

The order is significant in unequivocally reaffirming that mergers and acquisitions in regulated industries such as electricity distribution, banking, or telecommunications must include merger control clearance as an integral part of transaction planning. Any attempt to rely solely on sectoral approvals risks post-facto invalidation and/or penalties by the CCI.

7. Penalties in cases involving structural deviations to approved transaction structures

Approval from the CCI does not mark the end of merger control oversight. Even after clearance, a transaction, when consummated, must replicate the structure placed before and approved by the CCI. In 2025, the CCI continued its firm stance against post-approval deviations, (i) imposing penalties in a case involving, inter alia, Matrix Pharma Private Limited; and (ii) directing parties to file fresh notifications in a case involving the Maini group, where the implemented transaction diverged from the approved framework.

In such cases, the post-clearance material deviations included, inter alia, (i) changes to the identity or role of the acquirer(s); (ii) introduction of additional inter-connected steps (such as demergers or revised funding arrangements); (iii) entry of new investors / co-acquirers; (iv) internal restructurings or alterations in intermediate holding structures; and (v) revisions to consideration mechanisms.

The clear takeaway is that CCI approval is both transaction-specific and structure-specific. Any post-approval change, however incremental, commercially expedient, or driven by implementation constraints, must therefore be carefully assessed to determine whether a fresh notification is required.

8. Substance over form in intra-group transfers of existing shareholding

Rule 3 of the Competition (Criteria of Exemption of Combination) Rules, 2024 (Exemption Rules) provides an exemption for incremental minority acquisitions, where the acquirer (or its group entities) holds less than 25% shareholding both before and after the transaction, subject to: (i) the absence of control, board representation, or access to commercially sensitive information; and (ii) compliance with limits on incremental acquisitions where horizontal overlaps, or vertical / complementary linkages exist (Rule 3 Exemption). While conceptually straightforward, Rule 3 Exemption's reference to "additional" shares or voting rights creates interpretative uncertainty for intra-group restructurings, which involve mere transfers of existing shareholding within a group without any incremental acquisition or material change in competitive positioning.

This uncertainty was addressed by the CCI in its order dated 8 September 2025, where a notice was filed by Kedaara II Continuation Fund as a "matter of technical compliance" (given the absence of an explicit exemption for intra-group restructurings under the Exemption Rules) in relation to the proposed acquisition of a 1.64% equity shareholding in Lenskart Solutions Limited from Kedaara Norfolk Holdings Limited and Kedaara Capital Fund II LLP, both belonging to the Kedaara Group.

Rejecting such a narrow and literal interpretation of the Rule 3 Exemption, the CCI emphasized that such analysis must align with the scheme and spirit of the Competition Act and Exemption Rules. Where all the conditions contained in Rule 3 Exemption are otherwise fulfilled, intra-group transfers will be eligible to claim such an exemption. By adopting this substance-over-form, effects-oriented approach, the CCI provided critical certainty for investment fund restructurings, signaling a pragmatic methodology in merger control that prioritizes competitive impact over technical formalities.

Looking Ahead: What this means for dealmakers

The merger control landscape that emerged in 2025 demands a fundamental shift in how transactions involving India are planned and executed. CCI's approval can no longer be treated as a downstream regulatory formality; it is now a front-end strategic consideration that directly affects deal sequencing, risk allocation and certainty of outcomes. The clear lesson is that early, transaction-specific competition law inputs, aligned with commercial objectives and implementation realities, are indispensable to preserve value and ensure that complex deals close as intended in an increasingly exacting regulatory environment.

Footnotes

1. Combination Registration No. C-2025/06/1295 (Dalmia Cement (Bharat) Limited), Combination Registration No. C-2025/07/1302 (Adani Enterprises Limited and Adani Infrastructure and Developers Private Limited), Combination Registration No. C-2025/08/1318 (Jindal Power Limited), Combination Registration No. C-2025/08/1316 (PNC Infratech Limited), and Combination Registration No. C-2025/09/1328 (Vedanta Limited).

2. The 2025 IBC Amendment Bill was referred to a Select Committee of the Lok Sabha on 12 August, and the Report of the Select Committee was presented to the Lok Sabha on 17 December 2025.

3. All entities where an enterprise holds: (i) direct or indirect shareholding of 10% or more; or (ii) a right or ability to exercise any right (including any advantage of commercial nature with any of the party or its affiliates) that is not available to an ordinary shareholder; or (iii) a right or ability to nominate a director or observer in such entity(s) (Old Materiality Thresholds).

4. All entities where an enterprise holds: (i) shareholding or voting rights of 10% or more; or (ii) right or ability to have a representation on the board of directors of the entity either as a director or as an observer; or (iii) the right or ability to access commercially sensitive information of the entity (Revised Materiality Thresholds).

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