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India’s mergers and acquisitions (M&A) framework has seen sweeping reforms between 2024 and 2025. These changes aim to make regulations faster, clearer, and more aligned with global practices, while still keeping investor protection and compliance at the forefront.
From company law amendments that ease cross-border mergers, to competition law updates introducing new thresholds, to FDI and FEMA clarifications and tax changes, the M&A landscape has become both more facilitative and compliance-intensive.
This article breaks down the major reforms and their practical impact on deal structuring, regulatory approvals, and investment strategy.
1. Company Law: Faster Cross-Border Deals and Reverse Flipping
The Companies Act, 2013 remains the backbone of India’s corporate restructuring framework. Traditionally, only domestic small companies and wholly owned subsidiaries could use the “fast-track” merger route, while others had to undergo the longer National Company Law Tribunal (NCLT) process.
What’s new?
Why it matters:
2. Competition Law: New Thresholds and Broader Definitions
The Competition Act, 2002 governs merger control in India. Until now, only asset- and turnover-based thresholds determined whether deals required approval from the Competition Commission of India (CCI).
Key reforms (via the 2023 Amendment and 2024 Regulations)[2]:
Why it matters: India’s competition regime is now closer to global practice. But acquirers must factor in CCI review early, carefully assess information/control rights, and prepare for tighter scrutiny.
3. FDI & FEMA: Clarity on Downstream Investment
Foreign investment rules under the Foreign Exchange Management Act (FEMA), 1999 and RBI directions were long seen as complex for layered deal structures. Recent reforms aim to fix that.
Highlights:
Why it matters: Foreign investors now have greater flexibility in structuring Indian deals, with fewer procedural hurdles—but must remain cautious in regulated sectors.
4. Tax Reforms: Impact on M&A
Tax changes in the last two Union Budgets are also reshaping deal economics.
Why it matters: Tax certainty improves deal predictability, especially for cross-border acquirers and start-ups navigating exits.
Conclusion
India’s latest M&A reforms show a clear intent: make deal-making faster and more globally competitive, while tightening compliance expectations.
For companies and investors, this means:
Bottom line: Successful M&A in India now requires early legal assessment, transparent structuring, and proactive regulator engagement. With the right planning, the new framework opens the door to deeper cross-border integration and more efficient domestic consolidation.
[1] The Companies (Compromises, Arrangements and Amalgamations) Amendment (CAA) Rules, 2024, notified by the Ministry of Corporate Affairs (MCA) on 9 September 2024 and enforced from 17 September 2024 [G.S.R. 555 (E) dated 9.09.2024].
[2] Regulation 5A of the CCI (Combinations) Regulations, 2024.
[3] RBI/FED/2017-18/60 [FED Master Direction No.11/2017-18 : Master Direction – Foreign Investment in India] https://www.rbi.org.in/scripts/bs_viewmasdirections.aspx?id=11200
[4] RBI/FED/2015-16/13 [FED Master Direction No.18/2015-16: Master Direction – Reporting under Foreign Exchange Management Act, 1999] https://rbi.org.in/scripts/BS_ViewMasDirections.aspx?id=10202
[5] Section 56(2)(viib) of the Income-tax Act, 1961.