Not every merger or acquisition in India lands on the desk of the Competition Commission of India (CCI). The Competition Act, 2002 filters transactions through a set of numerical gates: only those combinations whose parties cross the asset or turnover figures fixed in Section 5 become notifiable, triggering the mandatory pre-merger review under Section 6. Get the arithmetic wrong and a perfectly benign deal can attract a gun-jumping penalty; misread an exemption and a strategic acquisition slips through unscrutinised. This chapter maps the entire threshold architecture as it stands after the Competition (Amendment) Act, 2023 and the March and September 2024 notifications, including the new deal value threshold designed to catch asset-light digital acquisitions.
What counts as a "combination"
Section 5 defines a combination as an acquisition of shares, voting rights, assets or control, an acquisition of control by a person already controlling an enterprise engaged in a similar or identical business, or a merger or amalgamation — but only where the prescribed value of assets or turnover is met. The thresholds are therefore not incidental detail; they are part of the very definition. A transaction that does not cross the Section 5 figures is simply not a combination in law, and no obligation to notify under Section 6(2) arises.
This is the crucial structural point that aspirants frequently miss. India operates a mandatory and suspensory merger control regime: a notifiable combination cannot be consummated until the CCI approves it or the statutory waiting period lapses. The word "mandatory" distinguishes India from voluntary-notification jurisdictions; the word "suspensory" means the deal must be held in abeyance pending clearance. But the regime bites only above the line. Everything in this chapter is about locating that line precisely.
The drafting choice to fold the financial thresholds into the definition of combination itself — rather than placing them in a separate jurisdictional provision — has a practical consequence: counsel must run the threshold arithmetic before anything else, because if the figures are not crossed the analysis simply stops and no AAEC question ever arises. For the antecedent concepts of "enterprise", "turnover" and "group" that the thresholds rely on, see Definitions: Enterprise, Relevant Market and Cartel, and for how combinations sit alongside the conduct provisions read the Competition Act hub.
Two axes: assets or turnover, enterprise or group
The threshold test runs on two independent axes. First, the relevant magnitude is either the combined value of assets or the combined turnover — the parties cross the gate if either figure is satisfied; the tests are disjunctive. Second, the figures are measured at two levels: the enterprise level (the acquirer and the target taken together, or the merging enterprises) and the group level (the target plus the group to which the acquirer belongs). Crossing any of these limbs makes the transaction notifiable.
A further geographical split runs through each level. There is a purely India-based test (assets located in India or turnover in India) and a worldwide test with an India nexus (global assets or turnover in US-dollar terms, coupled with a minimum quantum of assets or turnover inside India). The India nexus requirement was a deliberate jurisdictional anchor: a wholly foreign-to-foreign deal with no meaningful Indian footprint should not be dragged into Indian review merely because the global parties are large. The architecture mirrors the comparative logic of merger control in the European Union and the United States, but India's choice to combine an enterprise test with a separate group test, and to overlay a rupee India-component on every dollar limb, makes the Indian gates distinctively layered.
It is worth stressing that the assessment is made as at the relevant date — typically the date of the binding agreement, board approval or, for a hostile or market acquisition, the date the trigger event occurs — using the audited figures of the financial year immediately preceding. The thresholds are therefore a snapshot, not a moving average, and parties commonly take legal advice on the precise reference date because a deal sitting just below a gate in one financial year may cross it in the next.
Enterprise-level thresholds (acquirer plus target)
As originally enacted in 2002, the enterprise-level India test required combined assets in India of more than Rs 1,000 crore or combined turnover in India of more than Rs 3,000 crore. The worldwide test required combined assets of more than USD 500 million (including at least Rs 500 crore in India) or combined turnover of more than USD 1,500 million (including at least Rs 1,500 crore in India).
By notification dated 7 March 2024 the Ministry of Corporate Affairs enhanced these base figures by 150 per cent. The current enterprise-level India thresholds are combined assets of more than Rs 2,500 crore or combined turnover of more than Rs 7,500 crore. The revised worldwide figures are combined assets of more than USD 1.25 billion (with at least Rs 1,250 crore in India) or combined turnover of more than USD 3.75 billion (with at least Rs 3,750 crore in India). The India-component minimums were correspondingly raised from Rs 500 crore and Rs 1,500 crore to Rs 1,250 crore and Rs 3,750 crore.
Group-level thresholds (target plus acquirer's group)
The second level captures the combined heft of the group to which the acquiring enterprise belongs, reckoned together with the target. The statutory Explanation to Section 5 defines a "group" by reference to control — broadly, two or more enterprises where one can exercise 26 per cent or more of voting rights, appoint more than half the board, or control the management or affairs of the other. A 2011 exemption notification, periodically renewed, has in practice operated the group definition at the higher 50 per cent control level for the purposes of the de minimis machinery, but the bare statutory figure remains 26 per cent.
The originally enacted group-level India test required group assets in India of more than Rs 4,000 crore or group turnover in India of more than Rs 12,000 crore; the worldwide test required group assets of more than USD 2 billion or group turnover of more than USD 6 billion (each with the same Rs 500 crore / Rs 1,500 crore India component). Following the 7 March 2024 enhancement, the current group-level India thresholds are assets of more than Rs 10,000 crore or turnover of more than Rs 30,000 crore, and the worldwide figures are assets of more than USD 5 billion or turnover of more than USD 15 billion, each carrying the Rs 1,250 crore / Rs 3,750 crore India nexus.
The thresholds at a glance
The four tests below operate disjunctively: a transaction is notifiable if it crosses any one of them. All figures are the current values after the 7 March 2024 enhancement.
| Level & geography | Assets | Turnover |
|---|---|---|
| Enterprise — India | > Rs 2,500 crore | > Rs 7,500 crore |
| Enterprise — Worldwide (India nexus) | > USD 1.25 bn (incl. Rs 1,250 cr in India) | > USD 3.75 bn (incl. Rs 3,750 cr in India) |
| Group — India | > Rs 10,000 crore | > Rs 30,000 crore |
| Group — Worldwide (India nexus) | > USD 5 bn (incl. Rs 1,250 cr in India) | > USD 15 bn (incl. Rs 3,750 cr in India) |
Remember that the dollar tests still require the parallel India-component minimum to be satisfied; a deal that clears the global figure but has a negligible Indian presence is not notifiable on that limb.
The de minimis (small target) exemption
Even where the Section 5 thresholds are crossed, a transaction may escape notification under the long-standing small target exemption. Issued first in 2011 and substantively recast in 2017, the exemption provides that an acquisition, merger or amalgamation in which the target enterprise has assets in India not exceeding a stated figure, or turnover in India not exceeding a stated figure, need not be notified. The exemption is target-focused: it looks only at the enterprise being acquired, not at the acquirer's size.
The 2017 notification fixed the limits at assets of Rs 350 crore or turnover of Rs 1,000 crore for a five-year period from 29 March 2017, later extended to 28 March 2027. By the 7 March 2024 notification these were raised to assets of Rs 450 crore or turnover of Rs 1,250 crore. The policy rationale is administrative economy: where the acquired business is genuinely small, the deal is unlikely to harm competition and the CCI's resources are better spent elsewhere.
Two technical points repay attention. First, the exemption is computed on the target's figures alone, but where only part of an enterprise (a division, business or asset) is acquired, the relevant assets and turnover are those of the part being transferred — so a buyer carving a small unit out of a large seller can often rely on the exemption. Second, the exemption operates only on the assets-or-turnover thresholds; it does not displace the deal value threshold. A Rs 2,000 crore-plus acquisition of an asset-light digital target with substantial Indian operations must be notified even though, on its tiny balance sheet, it would comfortably fall within the small-target figures. The DVT was deliberately drafted to close exactly this loophole.
The deal value threshold — catching asset-light acquisitions
The asset-and-turnover model has a structural blind spot: a target may command little revenue and few tangible assets yet be strategically priceless — the classic "killer acquisition" of a nascent digital rival. The Competition (Amendment) Act, 2023 plugged this gap by inserting Section 5(d), a new deal value threshold (DVT). Where the value of any transaction (including every form of direct, indirect, immediate or deferred consideration) exceeds Rs 2,000 crore, and the target has substantial business operations in India, the combination is notifiable irrespective of whether the conventional asset or turnover thresholds are met and irrespective of the small target exemption.
The DVT and the operative test were brought into force on 10 September 2024 alongside the new Competition Commission of India (Combinations) Regulations, 2024. The regulations define "substantial business operations in India" (SBO): for a target in a digital services business the test is met if its Indian business or end users in the relevant twelve-month period are 10 per cent or more of its total global users, or its Indian gross merchandise value or turnover exceeds 10 per cent of its global figure; for non-digital businesses the SBO test requires the Indian gross merchandise value or turnover to exceed both 10 per cent of the global figure and Rs 500 crore. The DVT thus targets precisely the data-rich, revenue-light deals that the original 2002 thresholds were never designed to capture.
The genesis of the DVT lies in international experience. Germany and Austria adopted transaction-value tests in 2017 after concerns that Facebook's acquisition of WhatsApp — a service with enormous user reach but minimal revenue — had escaped meaningful merger scrutiny on conventional turnover figures. India's version is broader in one respect and narrower in another: broader because the SBO test is sector-specific and digital-aware, narrower because it bites only above a high Rs 2,000 crore value. For aspirants, the policy framing matters as much as the number: the DVT is the legislature's response to the "killer acquisition" critique, under which a dominant incumbent neutralises a future competitor by buying it early, before its revenue makes it visible to a turnover-based filter.
Section 6: the obligation that the thresholds trigger
Crossing a Section 5 threshold engages Section 6, which declares that no enterprise shall enter into a combination causing or likely to cause an appreciable adverse effect on competition (AAEC) within the relevant market in India, and that any such combination shall be void. Section 6(2) imposes the procedural duty: a party to a notifiable combination must give notice to the CCI in the prescribed form.
The Competition (Amendment) Act, 2023 made an important timing change. Previously notice had to be filed within 30 days of board approval or execution of the binding document. That rigid 30-day clock was removed; a party may now file any time after the trigger event but before consummation. The standstill obligation — the period during which the combination may not take effect — was simultaneously compressed from 210 days to a maximum of 150 days from the date of notice (extendable by 30 days for reasonable cause), reflecting a deliberate push toward faster clearances. The AAEC inquiry itself draws on the factors in Section 20(4), which echo the rule-of-reason analysis discussed in Anti-Competitive Agreements.
Section 6A: relief for open offers and on-market purchases
A strict suspensory regime sits awkwardly with the realities of public-market acquisitions, where SEBI's takeover code may compel an open offer that cannot wait for antitrust clearance. The 2023 Amendment inserted Section 6A to resolve this tension. It permits a party to implement an open offer, or to acquire shares or convertible securities through a series of transactions on a regulated stock exchange, before the CCI's approval — provided the acquirer does not exercise any ownership or beneficial rights (notably voting and board influence) over the acquired securities until clearance, and files notice within 30 days of the first acquisition.
Section 6A is thus a carefully bounded carve-out from the standstill rule: the economic exposure may be taken on, but the levers of control stay frozen until the CCI signs off. It removes a long-standing practical impediment without surrendering the substance of pre-merger scrutiny.
Gun-jumping and the penalty regime
"Gun-jumping" is the colloquial label for consummating a notifiable combination, wholly or partly, without or before CCI approval, or failing to notify at all. The leading authority is the Supreme Court's composite ruling in Competition Commission of India v. Thomas Cook (India) Ltd. and the connected SCM Soilfert appeal (Civil Appeal Nos. 13578 of 2015 and 10678 of 2016, decided 17 April 2018). The Court upheld penalties under Section 43A for failure to notify, holding that the obligation is a civil one requiring no proof of mala fide intent, and that where a deal proceeds through several interconnected steps the substance of the composite transaction governs — parties cannot escape notification by slicing an integrated acquisition into separately consummated tranches.
On the facts, SCM Soilfert (a Deepak Fertilisers group entity) had made open-market purchases of shares in Mangalore Chemicals before notifying, and the CCI's penalty of Rs 2 crore was sustained; Thomas Cook's acquisition of Sterling Holiday Resorts attracted a Rs 1 crore penalty for a similar prior market purchase that formed part of the composite scheme. In both, the appellants argued that bona fide market purchases ought not to count as consummation; the Court rejected this, treating the inter-connected steps as one combination requiring single, prior notification.
Under the original Section 43A the CCI could levy up to 1 per cent of the total turnover or assets of the combination, whichever was higher, for a failure to notify under Section 6(2). The 2023 Amendment overhauled the penalty architecture: it recalibrated the maxima, introduced an express penalty for substantive gun-jumping (acting on a combination during the standstill), and clarified that penalties may be assessed by reference to global turnover rather than India turnover alone — a markedly heavier deterrent for large multinationals whose Indian revenues are a small fraction of their worldwide figures. The lesson for practice is unchanged from Thomas Cook: structure the deal so that no element of the integrated transaction is implemented before clearance, however commercially tempting an early market position may be.
The Green Channel: automatic approval for non-overlapping deals
At the opposite end from gun-jumping sits the Green Channel, introduced in 2019 and now embedded in the 2024 Combinations Regulations. Where the parties to a notifiable combination have no horizontal, vertical or complementary overlaps — reckoned across the parties, their group entities and any enterprise in which they hold shares or control — the combination is deemed approved upon filing, with the CCI's acknowledgement operating as immediate clearance. Described as the first regime of its kind in the world, the Green Channel reflects the principle that genuinely unrelated combinations cannot create an AAEC and so warrant no substantive review.
The Green Channel does not lower the Section 5 thresholds — the transaction must still be notifiable to use it — but it converts the notification into a near-instantaneous formality. Its discipline is exacting: a single overlooked overlap, even an indirect one through a minority shareholding, invalidates the filing and exposes the parties to gun-jumping consequences, so accurate overlap mapping is essential.
Computing assets and turnover correctly
Because the entire regime turns on numbers, their computation repays attention. The value of assets is taken as the book value as shown in the audited books of account in the financial year immediately preceding the relevant date, less depreciation, plus the brand value, goodwill, copyright, patent, trademark and similar commercial rights, if any, referred to in the relevant Schedule. Turnover includes the value of sale of goods or services, and the statutory Explanation directs that turnover be assessed accordingly.
For the worldwide tests the dollar figures are converted at the average exchange rate, and the India component is computed separately. A recurring trap is the treatment of asset transfers: where only a part of an enterprise (a division or business unit) is being acquired, the relevant assets and turnover are those attributable to the portion being transferred, not the entire seller. The Supreme Court's substance-over-form reasoning in Thomas Cook reinforces that artificial fragmentation of value to dodge a threshold will not be respected. These computation rules interlock with the broader notion of an undertaking's economic footprint examined under Abuse of Dominant Position.
Exam pointers and common pitfalls
Examiners test this topic through precise figure recall and conceptual discrimination. Keep four distinctions sharp. First, thresholds versus AAEC: Section 5 is a pure jurisdictional gate measured in rupees and dollars; whether the combination actually harms competition is a separate Section 6 / Section 20(4) inquiry. Second, enterprise versus group: a deal small at the enterprise level may still be notifiable because the acquirer's group is large. Third, asset or turnover: the tests are disjunctive, so satisfying either triggers notification.
Fourth, and most contemporary, the deal value threshold: the Rs 2,000 crore DVT plus the substantial-business-operations test is the single most likely current-affairs question, having taken effect on 10 September 2024 to catch digital killer acquisitions that the asset-turnover model missed. Equally examinable is the de minimis small target exemption (Rs 450 crore / Rs 1,250 crore) and its interaction with the DVT, which now overrides it. Round this off with the gun-jumping authority of Thomas Cook and SCM Soilfert and the civil, no-mens-rea character of Section 43A penalties, and the basics of horizontal and vertical analysis from Horizontal Agreements.
Frequently asked questions
What are the current Section 5 enterprise-level thresholds after the 2024 revision?
After the 7 March 2024 notification (a 150 per cent enhancement), the enterprise-level India test is combined assets of more than Rs 2,500 crore or combined turnover of more than Rs 7,500 crore. The worldwide test is combined assets of more than USD 1.25 billion (with at least Rs 1,250 crore in India) or turnover of more than USD 3.75 billion (with at least Rs 3,750 crore in India).
How do the group-level thresholds differ from the enterprise-level ones?
The group test reckons the target together with the entire group to which the acquirer belongs. The current India figures are assets exceeding Rs 10,000 crore or turnover exceeding Rs 30,000 crore; the worldwide figures are assets above USD 5 billion or turnover above USD 15 billion, each with the Rs 1,250 crore / Rs 3,750 crore India nexus. A deal small at enterprise level can still be notifiable on the group limb.
What is the deal value threshold and why was it introduced?
Section 5(d), inserted by the Competition (Amendment) Act, 2023 and effective 10 September 2024, makes any transaction worth more than Rs 2,000 crore notifiable where the target has substantial business operations in India, regardless of the asset or turnover figures. It was designed to capture asset-light digital "killer acquisitions" that the conventional thresholds missed.
Does the small target (de minimis) exemption still apply?
Yes, but at revised limits. A combination need not be notified if the target enterprise has assets in India not exceeding Rs 450 crore or turnover in India not exceeding Rs 1,250 crore. However, the deal value threshold now overrides this exemption: a Rs 2,000 crore-plus deal with substantial Indian operations must be notified even if the target is asset-light.
What did the Supreme Court hold in the Thomas Cook and SCM Soilfert cases?
In CCI v. Thomas Cook (India) Ltd. and the connected SCM Soilfert appeal (decided 17 April 2018), the Supreme Court upheld gun-jumping penalties under Section 43A, holding that the notification duty is a civil obligation needing no proof of intent, and that the substance of a composite, multi-step transaction governs — parties cannot avoid notification by consummating part of an integrated deal (such as on-market share purchases) ahead of filing.
What is the Green Channel route and how does it relate to the thresholds?
The Green Channel grants automatic, deemed approval upon filing for notifiable combinations in which the parties and their groups have no horizontal, vertical or complementary overlaps. It does not lower the Section 5 thresholds — the deal must still be notifiable — but converts the review into an instant formality. A single overlooked overlap invalidates the filing and risks gun-jumping liability.