Impact of Mergers on Competition India: 2025 Market Insights
Mergers and acquisitions (M&A) are powerful engines of change, capable of reshaping entire industries. They unlock potential for growth, efficiency, and innovation, but they also carry the risk of reducing competition. In India, the Competition Commission of India (CCI) acts as a gatekeeper, ensuring that business consolidation does not harm consumer interests or market health.
This article explores the impact of mergers on competition in India, with the latest 2025 updates, case law, and practical advice for dealmakers.
The Dual-Edged Sword: Positive and Negative Effects of Mergers-Impact of mergers on competition India
- Positive Effects
- Efficiency and Economies of Scale – Merged firms can cut redundant costs, streamline supply chains, and improve productivity. These gains may translate into lower prices and better quality for consumers.
- Boosting Innovation – Larger companies often have more resources for R&D. For example, a 2024 tech merger in Mumbai led to stronger cloud services, offering businesses new options.
- Global Competitiveness – Mergers help Indian firms achieve the scale needed to compete with global players, attract investment, and expand internationally.
- Negative Effects
- Market Dominance Risks – Fewer competitors may lead to higher prices and less incentive to innovate.
- Barriers to Entry – Control over suppliers or distribution networks can make it harder for new entrants.
- Abuse of Dominance – Large players may resort to predatory pricing, exclusive contracts, or bundling.
- Reduced Consumer Choice – Consolidation often limits alternatives, which can harm consumer welfare.
The Legal and Regulatory Framework in 2025
- The Competition Act, 2002
Sections 5 and 6 of the Act empower the CCI to review mergers and acquisitions (called “combinations”) that meet certain thresholds.
- The 2023 Amendment Act
This reform introduced:
- Deal Value Threshold (DVT): Any deal above ₹2,000 crore must be notified, even if asset/turnover tests are not met.
- Expanded Control Definition: “Material influence” now includes minority stakes, veto rights, board seats, or access to sensitive information.
- Combination Regulations 2024 & FAQs 2025
These provide clarity on:
- How to calculate transaction value.
- What counts as “inter-connected steps.”
- The difference between passive investor rights and rights that confer control.
Recent Cases and Lessons for 2025
- JSW Paints & Akzo Nobel India – Approved, showing CCI allows sector-shaping deals if they don’t harm competition.
- Asian Paints vs. Birla Opus – CCI is probing Asian Paints for alleged unfair dealer incentives that may restrict rivals.
- Delhivery & Ecom Express – Approved, highlighting that scale is necessary in logistics, but smaller players’ interests remain under review.
- Meta vs. CCI – Ongoing legal challenge against a CCI penalty shows how big tech is under close antitrust scrutiny.
Practical Takeaways for Businesses and Lawyers
- Assess Early – Map out voting rights, veto powers, and transaction values (including options and contingent payments).
- Identify Overlaps – Be transparent about overlaps in products, supply chains, or customer segments.
- Know Your Thresholds – Whether a startup in Mumbai or a manufacturer in Kolkata, check if your deal meets the DVT.
- Be Careful with Exemptions – Misuse of the Green Channel route can trigger penalties.
- Seek Expert Guidance – A corporate M&A lawyer can help with due diligence and CCI compliance strategy.
Conclusion
The impact of mergers on competition in India is more carefully scrutinised than ever. With reforms such as the DVT, a wider “material influence” test, and stricter enforcement by the CCI, regulatory risk has increased significantly.
Mergers can bring efficiency, innovation, and global competitiveness but they also risk market dominance and reduced consumer choice. By understanding the legal framework and working with experienced competition lawyers, businesses can harness the benefits of consolidation while staying compliant in a fast-changing market.
About LawCrust Legal Consultation.
LawCrust Legal Consulting, a subsidiary of LawCrust Global Consulting Ltd., is a trusted legal partner for NRIs and Indians across the globe. Backed by a team of over 70 expert lawyers and more than 25 empanelled law firms, we offer a wide range of Premium Legal Services both in India and internationally. Our expertise spans across legal finance, litigation management, matrimonial disputes, property matters, estate planning, heirship certificates, RERA, and builder-related legal issues.
In addition to personal legal matters, LawCrust also provides expert support in complex corporate areas such as foreign direct investment (FDI), foreign institutional investment (FII), mergers & acquisitions, and fundraising. We also assist clients with OCI and immigration matters, startup solutions, and hybrid consulting solutions. Consistently ranked among the top legal consulting firms in India, LawCrust proudly delivers customised legal solutions across the UK, USA, Canada, Europe, Australia, APAC, and EMEA, offering culturally informed and cross-border expertise to meet the unique needs of the global Indian community.