India plans to change its competition law to allow global technology companies to seek the country’s antitrust approval for several foreign mergers and acquisitions, in a bid to gain Europe and China’s influence on Big Tech, Prime Minister Narendra Modi said. An ambitious step by the government of India. ,
According to the draft bill seen by Bloomberg News, all deals where the transaction value exceeds 20 billion rupees ($252 million) will require the permission of India’s antitrust regulator if the firms have “substantial business operations in India”. The bill can be introduced in the Parliament. As of early Friday, according to a person with knowledge of the matter who confirmed the contents of the document.
The government will bring in rules defining “substantial business operations” once the amendments are approved, the person said, asking not to be identified while discussing private details. A spokesperson for the Ministry of Corporate Affairs did not respond to calls seeking comment.
India’s existing antitrust rules allow the regulator to scrutinize deals based on the size of assets and turnover of the companies involved, but the amended law, for the first time, will allow the Competition Commission to scrutinize transactions based on their value.
The proposal stems from India’s view that given the messaging app’s large Indian user base, it should have a say in deals such as Meta Platforms Inc’s 2014 acquisition of WhatsApp. With 834 million internet users and a consumer digital economy expected to become an $800 billion market by 2030, the Modi government is working on regulations to strengthen surveillance.
China has exercised its power over mergers of foreign companies with increasing power in recent years. In 2018, Qualcomm Inc. scrapped a $44 billion bid for rival chipmaker NXP Semiconductors NV after Chinese regulators failed to accept the biggest deal ever in the chip industry.
Competition laws in countries such as Germany and Austria also follow a deal-value threshold for mergers in the digital space. Germany amended the German Act Against Competition Restrictions to set a deal value limit of 400 million euros ($407 million) for notification of the merger, while Austria has set aside 200 million euros ($204 million).
According to the draft bill, India’s definition of the value of a transaction would include “every valuable consideration, whether direct or indirect, or postponed for any acquisition, merger or amalgamation”.
According to the draft bill, the government is also seeking to reduce the time limit for approval of the merger to 150 days from the current 210 days to expedite the approval process.
This story has been published without modification in text from a wire agency feed.
catch all business News, market news, today’s fresh news events and breaking news Updates on Live Mint. download mint news app To get daily market updates.