This article is originally published in Asia Business Law Journal at Overview of M&A Laws in India.

In the past few years, India has quietly rewritten much of the rulebook for mergers and acquisitions. Legislative reforms, together with liberal and calibrated foreign investment policy, have made dealmaking more efficient and predictable. As a result, total deal value reached about USD124 billion in 2025, an increase of about 18% over the previous year. Cross-border inbound investment rose by more than 150% to more than USD33 billion, and a growing number of India-founded groups have begun moving their holding companies back to India in anticipation of domestic listings.

This article examines significant recent developments in the principal areas of Indian M&A law and practice.

Fast-track mergers reshape deal routes

Indian acquisitions continue to be implemented through a familiar set of routes. Buyers acquire shares by purchase or fresh subscription, they take over a business by way of slump sale or through the Insolvency and Bankruptcy Code (IBC), 2016, or they carry out mergers, amalgamations and demergers as tribunal-supervised schemes of arrangement sanctioned by the National Company Law Tribunal (NCLT) under the Companies Act, 2013.

Among these, the most notable change has been the fast-tracking of the merger route, which replaces the NCLT process with approval by the central government acting through the regional director, reducing procedural complexity.

Originally, the route was confined to mergers between two or more small companies, and between a holding company and its wholly owned subsidiary. It was extended to startup companies and to a foreign holding company merging into its Indian wholly owned subsidiary, facilitating the reverse-flip homecoming of India-founded holding companies ahead of a domestic listing.

The fast-track procedure also applies to mergers between two or more unlisted companies (other than section 8 companies); a holding company and its subsidiary even where the subsidiary is not wholly owned; and two subsidiaries of the same holding company. In the second and third cases, the route is available only where the transferor company is unlisted. For corporate groups undertaking consolidation, these changes reduce both the time and cost of restructuring.

Competition clearance now drives deal planning

Competition clearance is now one of the aspects to plan for on any sizeable deal. A transaction that crosses the asset and turnover thresholds in the Competition Act, 2002 needs the prior approval of the Competition Commission of India (CCI). The Amendment Act of 2023, together with the relevant regulations of 2024, have reshaped the merger control regime in several important respects.

A significant change is the introduction of a deal value threshold. Any transaction valued at more than INR20 billion (USD207.4 million) must now be notified where the target has substantial business operations in India, assessed by reference to factors such as its Indian user base, turnover or assets.

This brings large digital and new-economy transactions within the notification regime, including those that would previously have fallen outside the CCI’s jurisdiction because the target had relatively limited assets or turnover in India. Importantly, the threshold applies even where the target would otherwise have qualified for the small-target exemption. The existing asset and turnover thresholds were also increased.

Two other changes matter, in practice. Control is now tested by reference to material influence by the acquirer, a low bar that pulls minority stakes and board or governance rights into the filing analysis. The review period has been cut to 150 days, but timing discipline has tightened. Closing any part of a notifiable deal before clearance invites gun-jumping penalties.

FDI and portfolio access widened

Foreign Exchange Management (Non-Debt Instruments Rules) still decides whether an inbound acquisition proceeds under the automatic route or needs prior government approval. Three developments stand out.

First, insurance has been opened to 100% foreign investment. This is a catalyst for consolidation in a capital-hungry, heavily regulated sector.

Second, the restrictive land border regime has been eased; holding up to 10% non-controlling beneficial ownership in an Indian company through the automatic route is now allowed, with anything above that threshold, or any investment carrying control, still requiring prior government approval. A 60-day fast-track has been introduced for specified manufacturing sectors.

Third, access by non-resident individuals to listed markets has been expanded; it now extends to the Portfolio Investment Scheme, previously available only to non-resident Indians and overseas citizens of India, to all individuals resident outside India.

Such investors may now trade shares of listed Indian companies on stock exchanges without foreign portfolio investor registration, subject to an individual limit of under 10% of paid-up capital and an aggregate limit of 24%. On the outbound side, the Overseas Investment Rules, 2022, permit Indian acquirers’ greater latitude to invest abroad under the automatic route, including in overseas financial services businesses, subject to prescribed eligibility conditions.

RBI opens bank-funded acquisitions route

One of the biggest shifts of the past year is the Reserve Bank of India’s (RBI) decision to allow Indian banks to finance acquisitions. Under its revised capital market exposure framework, which takes effect on 1 July 2026, a bank may, for the first time, fund the acquisition of control over a non-financial target by an eligible corporate borrower, whether listed or unlisted. The bank can cover up to 75% of the acquisition value, and the acquirer must put up the rest from its own funds. That said, conditions apply. The borrower must be an Indian non-financial company (or a non-financial subsidiary or step-down SPV set up for the deal) with net worth exceeding INR5 billion and profit after tax in each of the past three years; an unlisted acquirer also needs an investment-grade credit rating before disbursement.

The financing must be for acquiring control, capped at 75% of the independently assessed acquisition value, and the acquirer’s consolidated debt-to-equity ratio cannot exceed 3:1 on a continuing basis. The RBI has deliberately confined this to non-financial acquirers, excluding non-banking financial companies (NBFCs), alternative investment funds and other financial players, to support genuine strategic acquisitions rather than add leverage to the financial system.

Even with those guardrails, this lets domestic banks compete with foreign lenders, NBFCs and private credit in a space where they were shut out.

IBC reforms speed distressed dealmaking

The IBC remains a central route for acquiring distressed businesses. A resolution plan, which may itself include a merger or demerger, allows an acquirer to take over a company free of its past liabilities once it is approved by the NCLT.

The framework was substantially reformed in 2026. The IBC (Amendment) Act, 2026, introduces a creditor-initiated insolvency resolution process under which specified financial creditors can commence resolution out of court, while existing management remains in place under the oversight of a resolution professional. It tightens the timelines for admission of applications and approval of resolution plans, and provides enabling frameworks for group and cross-border insolvency.

For acquirers of stressed assets, the promise is a faster, more predictable resolution. The practical test, as with any IBC reform, will be how the timelines hold up once the provisions are notified and litigated.

Bill streamlines NCLT merger approvals

The reform agenda is not finished. The Corporate Laws (Amendment) Bill, 2026, introduced in the Lok Sabha in March 2026 and referred to a Joint Parliamentary Committee, proposes the most significant overhaul of the corporate statute in more than a decade.

Its centrepiece for M&A is a single-bench framework under which the NCLT for the transferee company would have jurisdiction over all companies in a scheme, regardless of where the others are situated, removing a source of delay in multi-company mergers. The bill also proposes to relax the fast-track approval thresholds, reducing member approval from the present 90% to a majority of members present and voting who hold at least 75% in value, and creditor approval from 90% to 75% in value.

Plan early for India M&As

What stands out about Indian M&A in 2026 is not any one reform but the weight of many taken together. Merger control goes further than before, foreign investment policy is more open, banks can finance acquisitions for the first time, and insolvency is being made quicker and more flexible. At the same time, deals in regulated sectors such as banking, insurance, telecoms, defence and financial market infrastructure will still need sectoral approvals on top of the company law, competition, securities and exchange-control clearances.

So, the real task for an acquirer is no longer just to know the rules, but to line up the overlapping approvals of the CCI, RBI, SEBI and the sectoral regulators, and to plan for them early. On the strength of its deal activity and reform trajectory, India remains a market full of opportunity for well-advised acquirers.