Mergers and Acquisitions in India: Complete 2026 Guide

Anyone involved in Mergers and Acquisitions in India today is navigating a very different regulatory landscape than they were just a few years ago. The first major shift came with the CCI Deal Value Threshold in September 2024, extending mandatory competition review to certain high-value digital transactions. A year later, SEBI updated the SAST Regulations, revising the method for pricing open offers involving infrequently traded shares. Soon after, the Income Tax Act 2025 replaced the decades-old 1961 Act, introducing a completely new legislative structure from April 2026. Together, these changes have altered the way Indian transactions are planned and executed. India’s M&A market reached USD 123.8 billion in 2025. Activity in Mergers and Acquisitions in India remained strong during the first half of 2025, with 649 transactions generating a combined deal value of USD 50 billion. The market has clearly shifted towards a smaller number of high-value strategic deals. Global companies in sectors such as IT, manufacturing, financial services and pharmaceuticals are expanding through acquisitions, restructuring overseas holding entities into Indian subsidiaries, and planning exits through structured secondary transactions. Each of these requires navigating multiple regulators simultaneously. None of them can be structured cleanly without understanding what changed recently. This guide covers all of it.

What Laws Govern Mergers and Acquisitions in India?

Mergers and Acquisitions in India are regulated under multiple laws. The Companies Act, 2013 governs merger schemes, the Competition Act and CCI Regulations oversee large transactions, while the SEBI SAST Regulations apply to acquisitions involving listed companies. No single regulator runs Indian M&A. That is the starting point. Approvals from NCLT, CCI, SEBI, RBI and sector-specific regulators often run simultaneously. Since each follows its own timeline, delays from even one authority can postpone closing. Early regulatory planning is essential.

When Is CCI Approval Required for Mergers and Acquisitions in India?

CCI pre-approval is mandatory when asset or turnover thresholds are met, or when the Deal Value Threshold applies—transactions above INR 2,000 crore where the target derives at least 10% of its users, revenue or GMV from India. Closing a deal before approval can attract a penalty of up to 1% of the deal value. The standard thresholds most practitioners know. Combined Indian assets exceeding INR 2,500 crore, or combined Indian turnover exceeding INR 7,500 crore. The worldwide equivalents bring in global groups that might otherwise fall below the Indian-only figures. The Competition Act also prescribes group-level thresholds. CCI approval may be required where the group to which the target will belong after the transaction has Indian assets exceeding INR 10,000 crore or Indian turnover exceeding INR 30,000 crore, or worldwide assets exceeding USD 5 billion with Indian assets above INR 1,250 crore, or worldwide turnover exceeding USD 15 billion with Indian turnover above INR 3,750 What changed in September 2024 is the Deal Value Threshold layer on top. The September 2024 Deal Value Threshold closed a major regulatory gap. Transactions above INR 2,000 crore now require CCI approval if the target has 10% or more users, revenue or GMV from India, even if asset or turnover thresholds are not met. A March 2024 notification exempts acquisitions where the target has Indian assets below INR 450 crore or turnover below INR 1,250 croreallowing qualifying transactions to proceed without CCI notification despite the ordinary Section 5 thresholds. The exemption remains in force until 6 March 2027. While this benefits smaller deals, larger transactions should assume CCI approval is required.

ENTERPRISE-LEVEL THRESHOLDS

CCI Threshold	Trigger
Combined India assets	Exceeding INR 2,500 crore
Combined India turnover	Exceeding INR 7,500 crore
Worldwide assets (with India nexus)	Exceeding USD 1.25 billion with Indian assets exceeding INR 1,250 crore
Worldwide turnover (with India nexus)	Exceeding USD 3.75 billion with Indian turnover exceeding INR 3,750 crore
Deal Value Threshold (from Sept 2024)	Deal value above INR 2,000 crore AND target has 10% plus India users, revenue, or GMV

GROUP-LEVEL THRESHOLDS

Threshold	Trigger
Group assets in India	Exceeding INR 10,000 crore
Group turnover in India	Exceeding INR 30,000 crore
Worldwide group assets (with India nexus)	Exceeding USD 5 billion with Indian assets above INR 1,250 crore
Worldwide group turnover (with India nexus)	Exceeding USD 15 billion with Indian turnover above INR 3,750 crore

DE MINIMIS EXEMPTION

Target Enterprise	Threshold
Assets in India	Not more than INR 450 crore
Turnover in India	Not more than INR 1,250 crore

How Does the SEBI Takeover Code Apply to Acquisitions of Listed Indian Companies?

Acquiring 25% or more in a listed Indian company triggers a mandatory open offer for at least 26% of the shares. Since December 2025, open offers for infrequently traded shares must be valued by an IBBI Registered Valuer. For foreign companies acquiring stakes in listed Indian entities, the SEBI Takeover Code is the framework that most directly affects deal economics. The 25% trigger is well-known. What practitioners run into more frequently is the creeping acquisition rule: acquiring more than 5%in a financial year from a base between 25% and 75% also triggers the open offer obligation. A foreign investor sitting at 30% who wants to acquire a further 6% in the same financial year is not making a simple market purchase. It is making a transaction that requires a public open offer. The December 2025 amendment specifically addresses infrequently traded shares, which covers most mid-cap and small-cap listed companies. Previously, open offer pricing for these was based on exchange prices, which can be thin and manipulable. The new requirement for independent IBBI Registered Valuer certification introduces a formal fair value floor that protects minority shareholders and creates a cleaner price-discovery mechanism for acquirers as well. The open offer timeline adds a minimum of twenty-six working days from public announcement before the acquisition can complete. That window must be factored into every listed company deal structure in India.

What Is the NCLT Merger Process and What Has Changed Recently?

Mergers and acquisitions in India through the NCLT scheme route take 9 to 18 months for standard cross-border schemes. The September 2025 amendment widened the scope of Section 233 fast-track mergers, eliminating NCLT approval for most unlisted mergers and certain foreign parent–Indian subsidiary mergers. These transactions can now be completed in 3–5 months. The standard NCLT scheme process involves board approval, filing the scheme with the NCLT, sending notices to regulators including MCA, RBI, SEBI, CCI, Income Tax Authority, and RoC, waiting thirty days for representations, convening meetings of shareholders and creditors where three-fourths in value must approve, the NCLT sanctioning order, and finally filing with the RoC for the effective date. What changed with the September 2024 MCA amendment is specifically relevant to foreign IT and technology companies doing reverse flips, where a foreign holding company merges into its wholly owned Indian subsidiary. Previously, this required full NCLT approval plus RBI sign-off, a combination that regularly stretched past eighteen months. Under Rule 25A(5) introduced by the amendment, the NCLT approval step is removed for these mergers. They now proceed under the fast-track Section 233 route with RBI and central government approval only. For Japanese, UAE, and European companies restructuring their India holding chain, this is a material improvement. The NCLT Amendment Rules 2024 also direct NCLT benches to dispose of merger petitions within ninety days of filing for standard matters. Whether that target is being consistently met in practice depends on the bench and the complexity of the scheme, but the directional change is real.

How Are Mergers and Acquisitions in India Taxed Under the Income Tax Act 2025?

The Income Tax Act, 2025, effective April 1, 2026, introduced a new section numbering system. Qualifying amalgamations continue to enjoy tax neutrality under Sections 2(6) and 70. Slump sales are now governed by Section 77. Loss carry-forward on amalgamation is under Section 116. Any deal with a completion date from April 1, 2026 must be drafted referencing the 2025 Act, not the 1961 Act. The substance of the tax provisions has not changed dramatically. What has changed is that every transaction document, every legal opinion, and every due diligence report referencing the old section numbers is now citing dead law. When acquiring an Indian company with pending tax assessments or transfer pricing disputes from pre-2026 years, due diligence should consider both the 1961 Act provisions under which the liabilities arose and the 2025 Act provisions that now govern them. Stamp duty asymmetry drives most deal structuring toward the share purchase route. A share deal attracts 0.25% stamp duty on consideration. An asset deal or slump sale attracts 5% to 8% depending on the state and the nature of the assets. For a deal involving significant fixed assets, the stamp duty saving on a share deal over an asset deal can exceed the entire professional advisory fee.

What FEMA Compliance Applies When a Foreign Company Acquires an Indian Entity?

Mergers and acquisitions in India involving foreign buyers require FEMA NDI pricing compliance, Form FC-TRS filing within 60 days of transfer or receipt of consideration whichever is earlier, and a SEBI-registered Category I Merchant Banker valuation for FDI and ODI share pricing. The August 2024 FEMA amendments simplified cross-border share swaps, enabling Indian companies to issue equity instruments in exchange for foreign company shares in a cleaner framework than previously existed. The pricing discipline under FEMA is non-negotiable. An inbound acquisition (foreign buyer acquiring Indian shares from an Indian or foreign seller) must be at or above fair market value determined by a SEBI Category I Merchant Banker. An outbound transaction (Indian company acquiring foreign assets) must be at or below fair market value. The floor and ceiling are not commercially negotiable around FEMA’s pricing norms. FC-TRS must be filed on RBI’s FIRMS portal within sixty days of the transfer or receipt of consideration, whichever is earlier. This is the most commonly missed post-closing obligation in Indian M&A, because the attention at closing goes to the commercial completion and the FC-TRS is treated as an administrative follow-up. It is not. Missing the sixty-day window creates a FEMA contravention attracting LFS that must be compounded before the next FEMA transaction can proceed. In an active acquirer making multiple India investments, an outstanding compounding matter blocks everything downstream.

What Due Diligence Should a Foreign Buyer Conduct for M&A India Transactions?

Due diligence for mergers and acquisitions in India covers four workstreams: financial, legal, tax, and DPDPA compliance. DPDPA 2023 due diligence is now a mandatory component for any technology or consumer-facing acquisition. The tax workstream must now map pending liabilities under the 1961 Act to their successor sections under the Income Tax Act 2025. Financial due diligence examines earnings quality, working capital normalisation, net debt, and for manufacturing targets, a technical enterprise value study. Legal due diligence covers title, licences and permits, material contracts, and labour compliance. The labour compliance workstream has expanded since the November 2025 implementation of India’s four new labour codes, which replaced twenty-nine legacy central laws. Any target with workforce compliance gaps under the old framework carries those gaps forward into the new code structure. Tax due diligence on Indian targets now requires specific attention to three areas. Open transfer pricing assessments, which can run years behind the current financial year given India’s audit cycle. Pending GST disputes, which are increasingly material in consumer and services businesses. And the Income Tax Act 2025 mapping exercise for any target whose historical returns were filed under the 1961 Act. DPDPA compliance due diligence is the newest workstream and the least standardised. For a technology acquisition, an e-commerce business, or any company holding consumer data at scale, the acquirer inherits all DPDPA obligations including consent framework gaps, data principal rights backlogs, and breach notification history. Valuing those liabilities is genuinely difficult at this stage because enforcement is still developing. The conservative approach is to treat any unresolved DPDPA gap as an indemnifiable item.

Conclusion

Mergers and acquisitions in India in 2026 require regulatory planning from the earliest stages of a transaction. The evolving CCI merger control framework, SEBI Takeover Code requirements, cross-border FEMA regulations, tax developments, and merger process reforms have changed how transactions must be structured, negotiated, and executed. Deals based on outdated assumptions about approval timelines, valuation methodologies, and compliance obligations can face avoidable delays and regulatory challenges. Corporate Legit Consulting LLP advises foreign companies on mergers and acquisitions in India, assisting with transaction structuring, CCI notifications, SEBI Takeover Code compliance, NCLT scheme management, FEMA compliance including pricing and FC-TRS filings, tax analysis, and DPDPA due diligence. Engaging regulatory advisors at the term sheet stage helps businesses identify risks early and build a compliant transaction strategy from the outset..