Competition and Sectoral Approvals
Domain overview
Competition and Sectoral Approvals tests merger control under the Competition Act, 2002 and the sectoral consents that can delay or block a deal. The examiner expects threshold analysis and a clear approval map.
Core rules
- CCI reviews combinations under sections 5 and 6. Thresholds are based on assets or turnover in India and worldwide, with a control test.
- The 2023 amendment introduced a deal-value threshold: transactions above Rs 2,000 crore with substantial business operations in India may require notification, subject to exemptions.
- A combination requiring approval must not be consummated before CCI clearance; the review period is 30 working days, extendable.
- Sectoral approvals include RBI for banking and NBFC acquisitions, IRDAI for insurance, SEBI for takeovers and listed entities, TRAI/DoT for telecom, and power regulators for electricity.
- FEMA and FDI policy may require government approval for sensitive sectors.
Worked example
A foreign buyer acquires 100% of an Indian target with India assets of Rs 3,000 crore. The asset threshold is crossed, so the parties file Form I with CCI and observe standstill. Separately, if the target is an NBFC, RBI approval is needed for the change in shareholding. The reasoning: CCI clearance and sectoral approval are cumulative, not alternative.
Traps
Assuming every acquisition needs CCI approval; ignoring the deal-value threshold; closing before CCI clearance; missing RBI or IRDAI approval; treating sectoral approval as a substitute for competition approval.