India plans to overhaul its competition law so that global technology companies will have to seek the country’s antitrust approval for many overseas mergers and acquisitions, an ambitious move by Prime Minister Narendra Modi’s government to gain the kind of influence over Big Tech that Europe and China have.
All deals where the transaction value exceeds 20 billion rupees ($252 million) would require permission of India’s antitrust regulator if the firms have “substantial business operations in India,” according to a draft bill seen by Bloomberg News. The bill could be presented to parliament as early as Friday, according to a person with knowledge of the matter who confirmed the document’s contents.
The government will bring in rules defining “substantial business operations” once the amendments are approved, the person added, asking not to be identified discussing private details. A spokesperson for the corporate affairs ministry did not respond to calls seeking comment.
India’s current antitrust rules allow the regulator to examine deals based on asset size and turnover of the companies involved, but the amended law will, for the first time, allow the competition commission to scrutinize transactions based on their value.
The proposals stem from India’s view that it should have a say on deals such as Meta Platforms Inc.’s 2014 takeover of WhatsApp, given the messaging app’s large Indian user base. With 834 million internet users and the consumer digital economy expected to become a $800 billion market by 2030, Modi’s government has been working on regulations to tighten oversight.
China has wielded its power over the mergers of foreign companies with increasing force in recent years. In 2018, Qualcomm Inc. scrapped a $44 billion bid for rival chipmaker NXP Semiconductors NV after Chinese regulators failed to approve what would have been the largest-ever deal in the chip industry.
Competition law in countries such as Germany and Austria also follow the deal-value threshold for mergers in the digital space. Germany amended the German Act Against Restraints of Competition to prescribe a deal value threshold of 400 million euros ($407 million) for merger notification while Austria has prescribed 200 million euros ($204 million) for the same.
India’s definition of the value of transaction will include “every valuable consideration, whether direct or indirect, or deferred for any acquisition, merger or amalgamation,” according to the draft bill.