India proposes mandating antitrust scrutiny for mergers and acquisitions valued above 20 billion rupees ($250 million), according to a draft law, a move lawyers said appeared aimed at global tech companies with substantial local business.
The proposal is part of a larger overhaul of India's competition law in a bill set to be introduced in parliament on Friday. Reuters reviewed a copy of the draft bill.
Under current law, the Competition Commission of India (CCI) reviews mergers and acquisitions that surpass thresholds for asset size or turnover.
But many high-value deals between technology firms with a major presence in India have escaped scrutiny in the country because the companies involved have had few assets and low turnover.
Facebook's acquisition of WhatsApp in 2014 for $19 billion, for example, required no CCI clearance, even as WhatsApp counted India as a major market, lawyers say.
"The hotly debated deal value test seeks to attract scrutiny of transactions where parties do not meet the conventional asset and turnover thresholds particularly in the tech space," said Anisha Chand, a partner specializing in antitrust law at Indian law firm Khaitan & Co.
"If passed in the present form, the incoming amendment may likely result in a jump in (the) number of transactions particularly in new age markets to require prior clearance," she added.
The CCI did not respond to a request for comment.
New regulations by the CCI will lay out the process to determine whether an entity has "substantial business operations" in India, according to the draft of the bill, which is dated Aug. 2.
As part of the broader revamp of competition law, the government also proposes reducing the time limit for approving mergers to 150 days from 210 days.It further proposes introducing a settlement mechanism for entities under investigation, after the CCI considered the "nature, gravity and impact of the contraventions," the draft bill stated.