BEYOND THE WHITE-COLLAR BOARDROOMS
Merger control in India, at first glance, appears to be a purely technocratic exercise, focused on defining relevant markets, testing for appreciable adverse effect on competition (“AAEC”), and assessing notifiablility of transactions! It is commonly perceived as a tool for ensuring market efficiency, preventing the creation of monopolies, and, ultimately, benefiting the consumer.1 This narrative, however, misses the larger and more compelling story. Law, particularly in a developmental state like India, is a crucible where the competing interests of capital, the state, and the society are mediated amongst. India’s merger control regime is far from being a simple application of rules, it is a rather profound reflection of its unique brand of state capitalism. It is where legal doctrines collide with political ambitions, where economic and market power is negotiated, and where public interest can become a convenient strategy. 2
This paper argues that India’s merger control regime is deeply shaped by political and economic interests, going beyond a conventional doctrinal analysis to explore its function within India’s broader developmental state. It traces the evolution of the regime from a protected past to a liberalized present, dissects the underexplored political economy dimensions, critically assesses how these interests shape outcomes, and analyses the contemporary challenges that lie at the intersection of law, technology, and geopolitics. This paper through its analysis will reveal how merger control in India is not just about market efficiency, but also about governance of economic power.
A NATION’S ECONOMIC DNA: THE EVOLUTION OF MERGER CONTROL
The history of India’s merger control regime mirrors the country’s shift from a state-controlled economy to a liberalized and market driven one.
A. The Path to a Modern Framework
Newly independent India, influenced by the Bombay Plan, harboured a deep suspicion of private monopolies.3 This concern was concretized in the Monopolies and Restrictive Trade Practices Act, 1969 (“MRTP Act”), which aimed to prevent the concentration of economic power.4 Its philosophy was simple: big is bad. Yet in practice, it was paradoxical. The MRTP Act operated within a politicized licensing system that allowed favoured business groups to grow while genuine competition withered. The MRTP Commission, with limited investigatory powers, struggled to enforce its mandate effectively. 5
The 1991 economic crisis marked a watershed moment. Faced with a balance of payments crisis, India abandoned its protectionist stance and embraced liberalization, privatization, and globalization (LPG Reforms). The MRTP Act’s fear of large firms no longer fit with India’s growing need for companies to expand and achieve global competitiveness. Recognizing this, the Raghavan Committee of 1999, proposed a modern competition law based on an effects-based approach, emphasizing prohibitions on practices causing an “appreciable adverse effect on competition”.6 This recommendation laid the foundation for the present day Competition Act, 2002.
B. The Dawn of a New Era: The Competition Act, 2002
Although enacted in 2002, the provisions dealing with combinations, Sections 5 and 6, were kept in abeyance for nearly a decade, reflecting governmental hesitation and apprehension about stifling economic activity. It was only in 2011 that they came into force through the Combination Regulations, 2011, which created a mandatory, suspensory pre-merger notification regime for “combinations” crossing specified asset and turnover thresholds.7 Although inspired by the European Union, India designed a structured yet mandatory system, unlike the voluntary system of USA, displaying its intent to actively shape market structure.8
As is the case with new legislations, this paved the way for substantive and judicial reviews of combinations. In the Jet Airways and Etihad deal of 2013, questions arose around “joint control” in international aviation markets.9 The Sun Pharma and Ranbaxy deal of 2014 marked the first significant structural remedy: divesting overlapping generic products.10 Subsequent cases, like Schneider and L&T deal featured behavioural commitments emphasising third-party access.11
The 2023 Competition (Amendment) Act introduced the Deal Value Threshold (“DVT”), which required notifications for transactions exceeding ₹2,000 crore involving “substantial business operations in India” (“SBOI”) regardless of whether the asset and turnover thresholds are met. This move addressed concerns pertaining to killer acquisitions in digital markets and asserted regulatory sovereignty over deals affecting Indian markets. 12
These reforms, in a way, aligned with jurisdictions such as Germany and Austria, which introduced DVT to catch nascent mergers. In India’s case, this move explicitly linked DVT to having an Indian nexus.
In short, merger control in India has evolved from a protectionist tool to a forward-looking mechanism aimed at balancing competition, innovation, and strategic autonomy. But this story cannot be told without addressing the elephant in the room: politics.
POLITICAL ECONOMY DIMENSIONS
Merger control in India is shaped by the complex interplay of political imperatives, industrial policies, and sectoral regulations. It is now time to explore three such dimensions of political economy: the developmental state, the geopolitical imperative, and the social justice undercurrent.
A. The Developmental State and the National Champion Agenda
Merger control does not operate in a vacuum; India’s competition policy is not grounded solely in consumer welfare, as in the US, or in market integration, as in the EU.13 Instead, it is deeply intertwined with the state’s developmental agenda, particularly the post 2014 discourse of Make in India and Aatmanirbhar Bharat. The underlying rationale here is that scale and consolidation are not always antithetical to public interest, they may in some instances be desirable to create globally competitive national players.14 The imperative to create these players often tempers strict merger enforcement. This, however, begs the question, does merger control as a matter of fact, tilt in favour of consolidation when industrial goals are in play?
Take the Reliance-Disney merger (2024) for instance, which created a media powerhouse with dominant sports broadcasting rights, especially for India’s most lucrative sports market- cricket. Initial reports suggested that the Competition Commission of India harboured concerns about reduced competition in advertising and sports broadcasting. Yet the deal was cleared with “voluntary modifications”, including commitments around pricing and channel bundling.15 The implicit logic was that an Indian conglomerate would have to resort to consolidation to effectively compete with established global players like Amazon Prime Video and Netflix. Juxtaposing that to the EU’s Siemens-Alstom (2019) decision, where the Commission blocked a merger in rail signalling and rolling stock, despite France and Germany’s lobbying for a European champion to compete with China’s CRRC, points towards occasions when nations have resisted similar pressures.16 The EU’s emphasis on competition law principles prevailing over industrial policy and their adherence to the same reflects broader developmental priorities.
As opposed to India’s practice, which showcases a more flexible accommodation of industrial policy within merger review. Earlier examples such as the merger of HDFC Ltd/ HDFC Bank (2023), essentially being India’s largest housing finance company with its parent bank was cleared without stringent remedies, despite concerns pertaining to concentration of housing loans in the hands of a few.17
Similarly, the Bharti Airtel- Tata Teleservices (2018) and Vodafone- Idea (2018) telecom mergers were waved through despite creating entities with massive market power. The justification was industrial and claimed that Indian firms needed scale to survive the brutal capital requirements of telecom industry. In effect, competition law became an industrial policy instrument, reflecting the state’s willingness to sacrifice short-term rivalry for long-term lucrative competitiveness. This shines light on India’s distinct approach where law is an enabler of developmental capitalism and not just a safeguard for efficiency.
B. The Geopolitical and National Security Imperative
Merger control in our country is increasingly wielded as a geopolitical tool. While the CCI’s statutory mandate is competition, politically sensitive transactions often undergo scrutiny by other ministries and regulators, embedding national security concerns into merger outcomes. This demonstrates how domestic legal frameworks are quite intertwined with international relations and strategic interests.
The Jet Airways- Etihad (2013) deal is a classic example. Beyond CCI’s AAEC analysis and approval, the Ministry of Civil Aviation and SEBI intervened, wary of ceding control over a domestic carrier to foreign hands. The CCI’s order itself acknowledged that the combination would enhance competition by ensuring Jet Airways’ survival and expansion, but this was not without complex regulatory coordination and public sector scrutiny.18 Similarly, the centre’s tightening of FDI rules in 2020, for investments from neighbouring countries (a veiled China reference!) has had direct spillovers on merger reviews.19 This policy change was a direct response to rising border tensions and the perceived threat of opportunistic takeovers of Indian companies made vulnerable by the COVID 19 pandemic. The same was evidenced by the People’s Bank of China’s increased stake in HDFC, acting as a wake up call for the union government.20 This was formalized in Press Note 3, and made prior government approval mandatory for investments from countries sharing a land border with India, and applied to all sectors and not just those historically considered sensitive.21 So, in a way, this policy shift effectively creates a parallel screening mechanism to the CCI by adding a layer of national security review into the FDI flows.
Globally too, similar parallels unfolded. The US’s CFIUS regime routinely blocked Chinese acquisitions, as evidenced in the Broadcom- Qualcomm, in 2018,22 and the EU had also introduced foreign direct investment screening.23 India’s DVT and SBOI tests can be seen as softer, competition-law based tools for asserting digital sovereignty. They reflect a world where mergers are no longer just market transactions but pieces on a geopolitical chessboard. CCI now finds itself in a balancing act, it must uphold its credibility through sound economic analyses, and also accommodate national priorities. CCI Chairperson, Mrs. Ravneet Kaur, spoke about the need to balance innovation with competition and strike a balance between enforcement and market friendly resolution.24 So CCI’s job is to reconcile political directives with the analytical framework of competition law, lest they damage the country’s attractiveness for foreign businesses! Hence, this constant negotiation makes merger control a living, breathing part of India’s foreign policies.
C. Labor and Social Justice as a Silent Factor
In sectors like e-commerce, food delivery systems, fintech etc. market power arises not only from scaling but also from data, network effects, and the ecosystem lock in. Merger control is inevitably political here, because the people who get the short end of the stick are not just rival firms but also small traders and workers who fear professional displacement and economic marginalisation. Labor and distributive justice, though not formally within the CCI’s mandate, shape the politics of merger review.
The Walmart-Flipkart (2018) deal, being the highest valued acquisition in India’s history at the time, triggered fierce opposition from trader groups like the Confederation of All India Traders (CAIT), who argued that foreign entries would create an uneven playing field, decimate small retailers and deepen predatory pricing.25 The CCI ultimately cleared the deal, by reasoning that while both parties were present in the B2B sales segment, their combined market share was insignificant, being less than 5%. CCI also clarified that allegations of predatory pricing and preferential treatment were not a result of the proposed combination, therefore not being within the scope of CCI’s review. This revealed a sharp contrast between the CCI’s technocratic focus on market power and entry barriers with that of the overlooked narratives of traders’ livelihoods. Yet, the political noise of this merger was not without consequence, forcing the government to reassure constituencies that small traders would be protected through policy interventions.26
This silent factor echoes global debates. In the US, the Biden administration has linked antitrust enforcement to labour market concentration.27 For instance, the Department of Justice’s challenge to the Penguin Random House- Simon & Schuster merger was based on the theory that the deal would reduce competition for authors and suppress their advances.28 Similarly in South Africa, merger control explicitly incorporates public interest considerations. In the Walmart- Massmart (2011) merger, the Competition Tribunal approved the deal with conditions requiring the merged entity to mitigate the jobs lost and create a fund to support local suppliers.29
India sits uneasily on fence between these models by being both formally neutral and informally sensitive. This in turn creates a paradoxical state where the CCI denies having a public interest mandate but often drafts lengthy orders to signal responsiveness to political anxieties. In practice, merger control becomes an arena where distributive justice sneaks in through the back door.
CRITICAL ANALYSIS: THE CHANNELS OF INFLUENCE
It is safe to now say that merger control in India functions as a negotiated space between legal doctrines and political economy. Industrial policy pushes for consolidation, trader politics contests digital acquisitions, and sectoral regulators complicate the field with overlapping mandates. The CCI while formally independent, cannot entirely insulate from these forces. The legal framework, sections 5 and 6 of the Competition Act, supplemented with the Combinations Regulations, provide a skeletal framework, but the actual practice of merger review is mediated by political and economic interests.
A. Law as Institutionalized Political Economy
The blueprint of India’s merger law is itself a political project. The introduction of the Deal Value Threshold along with its SBOI test through the Amendment of 2023, is not a technocratic reform but rather a political economy instrument. The Amendment, prima facie, responded to a technical gap of acquisitions of startups with low turnovers escaping scrutiny under the traditional thresholds. This move was driven by the dear of killer acquisitions undermining India’s innovation ecosystem and of global Big Tech absorbing promising Indian startups without oversight. 30
The DVT requires notifications of transactions exceeding ₹2,000 crore where the target has SBOI. The design of the SBOI test ensures that CCI retains jurisdiction over digital transactions with significant Indian user bases, even if the legal entity is incorporated and/ or based offshore. So in this sense, the DVT embodies the state’s assertion of a regulatory authority in this digital economy.
This, however, is not unique to India. Germany and Austria had adopted similar thresholds in 2017, where they explicitly cited digital killer acquisitions.31 If one were to contrast this with the USA, where courts in United States v. Facebook (2020) grappled with retroactive scrutiny of acquisitions like Instagram and WhatsApp that had escaped review, they would find that India’s forward-looking DVT reflects a choice to institutionalize political concerns directly into the jurisdictional threshold.32
B. Case-Specific Bargaining: Remedies as Political Settlements
Merger remedies in India often function as political bargains. The CCI does not issue binary judgments but rather negotiates behavioural commitments; structural remedies, such as divestitures, are rare. In Reliance-Disney (2024), voluntary modifications were accepted to placate competition concerns while allowing consolidation. Similarly, in Holcim- Lafarge (2015), structural divestitures were ordered, but only after prolonged negotiations that reflected a balancing of industrial priorities with competition norms. Even in Schneider- L&T, CCI accepted behavioural commitments requiring the former to grant fair access to third parties. Structurally, it could be seen that the overlap was not severe enough to block the merger, but political sensitivities were such that it necessitated a remedy that would reassure both regulators and competitors.
This flexible, pragmatic approach diverges from the EU, where structural remedies dominate. For instance in Dow- DuPont, divestitures in pesticides were required.33 In India, remedies are not just about market efficiency but about crafting settlements acceptable to both businesses and state.
C. Stakeholder Pressure and Public Sentiment
Stakeholder groups such as traders, labour unions, sectoral regulators exert significant influence, usually enough to frame the merger debates! In Walmart-Flipkart, the influence of trader associations like CAIT and their mobilization shaped the political narrative, even if not the legal test. While CCI ultimately cleared the deal, it issued a lengthy order justifying why competition remained through the likes of Amazon and Reliance Jio Mart, it did signal that political pressure demanded a more transparent and carefully reasoned clearance.
In telecom mergers, sectoral regulators like TRAI played a silent but important role in shaping CCI’s comfort levels. In a way by adopting DVT, the government responded not only to technocratic concerns but also to political pressures from trader groups fearful of platform dominance.
CONTEMPORARY RELEVANCE: THE SHIFTING LANDSCAPE
The most pressing contemporary challenge is the rise of Big Tech. Acquisitions by firms such as Google, Meta, Microsoft, Amazon increasingly target Indian startups, especially in select fields such as fintech, edtech, and e-commerce. These acquisitions often involve low asset and low turnover firms, but possessing high strategic value, positing the very reason why DVT was introduced in the first place in 2023. This also hints towards embracing the digital sovereignty agenda; ensuring that foreign giants do not quietly assert dominance by absorbing Indian startups. This concern is not just one which is competition driven but it is also tied to wider political economy anxieties.
India’s merger control regime today stands at the intersection of digitalization, conglomerate growth, and geopolitics. The Green Channel (2019) introduced a self-certification route for non-problematic combinations, signalling India’s commitment to ease of doing business.34 But the CCI has clarified that misclassification could trigger penalties, underscoring that the mechanism is not a free pass.
Globally, this echoes the EU’s Digital Markets Act and US proposals to reform Section 7 of the Clayton Act. Most importantly, merger control is now a key governance tool. The challenge for India is to reconcile its industrial policy goals with competition law principles transparently. If every merger is viewed as a political settlement, the credibility of competition law as a neutral field could be undermined.
CONCLUSION: THE GOVERNANCE OF ECONOMIC POWER
Merger control in India has travelled a long way from its origins in the Competition Act, 2002. It has now become a site where political and economic interests converge. The CCI operates within a developmental state that values investment, innovation, and sovereignty alongside competition. The design of rules like the DVT, the flexible use of remedies, and the influence of stakeholder narratives all demonstrate that competition law is deeply embedded in the state’s developmental ambitions. This is backed by the fact that the Indian regime operates in a distinct manner that shapes both its rules and outcomes.
Historically, the move from the MRTP Act’s industrial licensing ethos to the Competition Act’s market-based approach reflected India’s liberalisation trajectory. Yet CCI’s decisions cannot be understood in isolation from broader developmental priorities. Whether in the adoption of the deal value threshold, the reliance on behavioural remedies, or the clearance of politically salient mergers, competition law has functioned as a tool of negotiated compromise rather than rigid enforcement.
The future of India’s merger control regime lies in its ability to transparently reconcile growth ambitions with competition safeguards. As foreign giants, domestic conglomerates, and political pressures converge, the CCI must walk a fine line by protecting industrial policies and not get influenced by political realities. India’s merger control is a fascinating lens into how law mediates and is reshaped by power relations, policy priorities, and contested economic futures.
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Footnotes
1. Richard Whish and David Bailey, ‘Competition Policy and Economics’ (2015) Competition Law (8th edn, Oxford University Press)
2. OECD, Public Interest Considerations in Merger Control (OECD Roundtables on Competition Policy Papers No 187, OECD Publishing 2016)
3. Vibhav Mariwala, ‘Remember the Bombay Plan?’ Deccan Herald (28 October 2021) https://www.deccanhera ld.com/opinion/remember-the-bombay-plan-1044827.html
4. Monopolies and Restrictive Trade Practices Act 1969 (India)
5. Dorothy Shapiro, ‘A Competition Act by India, for India: The First Three Years of Enforcement Under the New Competition Act’ (2012) 5 Indian Journal of International Economic Law art 7 https://repository.nls.ac.in/ijiel/vol5/iss1/7/
6. Competition Commission of India, CCI Basic Introduction Part 1, http://164.100.58.95/sites/default/files/advocacy_booklet_document/CCI%20Basic%20Introduction_0.pdf
7. Aditi Gopalakrishnan, Gaurav Bansal, Rahul Shukla & Karan Sood, ‘India: Merger Control (4th Edition)’ (AZB & Partners, 7 January 2020) https://www.azbpartners.com/bank/india-merger-control-4th-edition/
8. Norton Rose Fulbright, ‘India: Competition Law Fact Sheet’ (in collaboration with Axiom5, July 2023) https://www.nortonrosefulbright.com/en/knowledge/publications/ba1b31d2/competition-law-fact-sheet-india
9. Nishith Desai Associates, Jet-Etihad: Deal Dissected (M&A Lab, May 2014) http://www.nishithdesai.com/fileadmin/user_upload/pdfs/Ma%20Lab/Jet-Etihad_Deal_Dissected.pdf
10. Press Information Bureau, ‘CCI approves the Proposed Merger Between Sun Pharma and Ranbaxy Subject to Modification’ (Government of India, Ministry of Corporate Affairs 08 December 2014) https://www.pib.gov.in/newsite/PrintRelease.aspx?relid=112854&utm®=3&lang=2
11. AZB & Partners, CCI Approves the Acquisition of Larsen & Turbo’s Electrical and Automation Business by Schneider Electric India Private Limited and MacRitchie Investments Pte. Limited with Modifications (6 June 2019) https://www.azbpartners.com/bank/cci-approves-the-acquisition-of-larsen-turbos-electrical-and-automation-business-by-schneider-electric-india-private-limited-and-macritchie-investments-pte-limited-with-modifications/
12. Samantha J Mobley, Kshaema Susan Mathew and Grant Murray, ‘What Do the Latest Amendments on Merger Control Mean for Dealmaking in India?’ (Baker McKenzie, 18 November 2024) https://www.bakermckenzie.com/en/insight/publications/2024/09/amendments-merger-control-dealmaking-india
13. US Department of Justice, Antitrust Division ‘The Antitrust Laws’ https://www.justice.gov/atr/antitrust-laws-and-you
14. Aastha Malipatil, ‘Beyond Competition: Unveiling Public Interest in India’s Merger Control Regime’ (CBFL, 28 June 2024) https://www.cbflnludelhi.in/post/beyond-competition-unveiling-public-interest-in-india-s-merger-control-regime
15. S N Thyagarajan, ‘How CCI addressed concerns surrounding the Reliance-Disney merger’ Bar & Bench (23 October 2024) https://www.barandbench.com/news/how-cci-addressed-concerns-surrounding-the-reliance-disney-merger
16. European Commission, ‘Mergers: Commission prohibits Siemens-Alstom merger’ (Press Release IP/19/881, 6 February 2019) https://europa.eu/rapid/press-release_IP-19-881_en.htm
17. Competition Commission of India, Combination Registration No C-2023/05/1032 (20 June 2023)
18. Rajat Sethi, Simran Dhir and Dhruv Agarwal, ‘Defining Control: A Study of the Jet-Etihad Case’ (2015) Vol 27 Article 6 National Law School of India Review https://repository.nls.ac.in/nlsir/vol27/iss2/6
19. Kartick Maheshwari, Key Change: Prior Approval for all Chinese FDI investments (Khaitan & Co, 18 April 2020) https://www.khaitanco.com/thought-leaderships/Key-Change-Prior-Approval-for-all-Chinese-FDI-investments
20. The Hindu, ‘People’s Bank of China picks up 1% stake in HDFC’ (12 April 2020) https://www.thehindu.com/ business/Industry/peoples-bank-of-china-picks-up-1-stake-in-hdfc/article31324196.ece
21. Financial Express, ‘Govt may relax Press Note 3 to allow Chinese FDI in select sectors’ (28 August 2025) https://www.financialexpress.com/policy/economy-govt-may-relax-press-note-3-to-allow-chinese-fdi-in-select-sectors-report-3960079
22. Michael Leiter, Ivan Schlager and Donald Vieira, ‘Broadcom’s Blocked Acquisition of Qualcomm’ (3 April 2018) Harvard Law School Forum on Corporate Governance https://corpgov.law.harvard.edu/2018/04/0 3/broadcoms-blocked-acquisition-of-qualcomm
23. European Parliament, ‘New screening rules for foreign investment in the EU’ (Press Release IP/2025/27703, 8 April 2025) https://www.europarl.europa.eu/news/en/press-room/20250407IPR27703/new-screening-rules-for-foreign-investment-in-the-eu
24. Press Information Bureau, ‘CCI Organises 10th Edition of National Conference on Economics of Competition Law’ (16 March 2025) https://www.pib.gov.in/PressReleasePage.aspx?PRID=2111638https://www.pib.gov.i n/PressReleasePage.aspx?PRID=2111638®=3&lang=2.
25. Ahkam Khan and Alok Chaurasia, ‘Understanding the Walmart-Flipkart Deal (CCI’s Evaluation of the Acquisition)’ (14 September 2018) RMLNLU Law Review Blog https://rmlnlulawreview.com/2018/09 /17/understanding-the-walmart-flipkart-deal-part-ii-ccis-evaluation-of-the-acquisition/
26. Confederation of All India Traders (CAIT), “Traders oppose Walmart-Flipkart deal, industry gives thumbs up,” Times of India, May 9, 2018. Available at: https://timesofindia.indiatimes.com/business/india-business/traders-oppose-walmart-flipkart-deal-industry-gives-thumbs-up/articleshow/64100397.cms
27. Fred Ashton, ‘Biden’s Antitrust Autopsy’ (16 January 2025) American Action Forum https://www.americanactionforum.org/insight/bidens-antitrust-autopsy/
28. Associated Press, “This must be stopped”: US begins court battle against publishing giants’ merger’ The Guardian (1 August 2022) https://www.theguardian.com/books/2022/aug/01/merger-antitrust-penguin-random-house-simon-schuster
29. Trade Law Centre, ‘Massmart – Wal-Mart merger (finally) approved’ https://www.tralac.org/discussions/a rticle/5256-massmart-wal-mart-merger-finally-approved.html
30. Abhay Joshi, Parthsarathi Jha, Ravisekhar Nair, Ketki Agrawal, and Raagini Agrawal, ‘The Revamped Indian Merger Control Regime’ (10 September 2024) Economic Laws Practice https://elplaw.in/leadership/the-revamped-indian-merger-control-regime/
31. Abdullah Hussain and Prerna Parashar, ‘Merger Thresholds and Merger Thresholds in the Digital Economy’ (2021) 7(1) National Law School Business Law Review https://repository.nls.ac.in/nlsblr/vol7/iss1/3
32. Jonah Goldwater, ‘Did Facebook Cheat?: A Test Case of Antitrust Ethics’ (2024) 195 Journal of Business Ethics 133 https://link.springer.com/article/10.1007/s10551-024-05694-z
33. European Commission, ‘Mergers: Commission clears merger between Dow and DuPont’ (27 March 2017) https://europa.eu/rapid/press-release_IP-17-772_en.htm
34. Aditya Bhardwaj and Rinki Singh, ‘Obtaining Green Channel Approval in India’ (6 February 2025) Dentons Link Legal https://www.dentonslinklegal.com/en/insights/articles/2025/february/4/obtaining-green-channel-approval-in-india