Chapter II - Prohibition of Certain Agreements, Abuse of Dominant Position and Regulation of Combinations
Section 5
Section 5: when an acquisition or merger becomes a combination
Section 5 decides whether an acquisition, merger or amalgamation is a 'combination' for Indian competition-law review. The test looks at the transaction structure, the parties' assets and turnover, the post-deal group and, in some cases, the value of the deal and the target's operations in India.
On this page
Need advice on Section 5?
This article is for general information. Refer to the Competition Act, 2002 official text for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Introduction
The rupee and dollar amounts printed in the original Act are not today's screening amounts. S.O. 1130(E) of 7 March 2024 raised the asset and turnover values by 150%. The Competition (Amendment) Act, 2023 added a deal-value test in clause (d) and a small-target exclusion in clause (e), both in force from 10 September 2024. The Competition (Minimum Value of Assets or Turnover) Rules, 2024 set the small-target figures.
Screen every route before deciding whether a Section 6 notice is needed. The figures on this page were checked against official sources on 11 October 2026; the Central Government can revise them by notification.
Key takeaways
Several independent routes
A transaction can be a combination at enterprise level, at post-deal group level or through the separate deal-value route. Meeting any one applicable route is enough to move on to the Section 6 analysis.
Current India enterprise thresholds
Combined India assets above ₹2,500 crore or combined India turnover above ₹7,500 crore. Worldwide tests with minimum India components, and higher post-deal group tests, also apply.
Deal value and small targets
The deal-value route applies above ₹2,000 crore where the target has substantial business operations in India. Clause (e) takes a target with India assets of not more than ₹450 crore or India turnover of not more than ₹1,250 crore outside clauses (a) to (c), but it does not mention clause (d).
Identify the transaction route
Clause (a) covers acquisitions of control, shares, voting rights or assets. Clause (b) covers acquiring control of an enterprise when the acquirer already controls an enterprise in a similar or substitutable business. Clause (c) covers mergers and amalgamations. Map connected steps and the business actually being acquired.
Since the 2023 amendment, 'control' means the ability to exercise material influence over the management, affairs or strategic commercial decisions of another enterprise or group. A transaction described as a minority investment can still need screening if it carries that kind of influence.
Apply the notified asset and turnover thresholds
These are the figures as revised by S.O. 1130(E) and published by CCI. They are alternatives: crossing any one applicable limb is enough.
| Level | Test | Assets | Turnover |
|---|---|---|---|
| Enterprise (parties combined) | India only | More than ₹2,500 crore | More than ₹7,500 crore |
| Enterprise (parties combined) | Worldwide, with India component | More than US$1.25 billion, including at least ₹1,250 crore in India | More than US$3.75 billion, including at least ₹3,750 crore in India |
| Group (after the deal) | India only | More than ₹10,000 crore | More than ₹30,000 crore |
| Group (after the deal) | Worldwide, with India component | More than US$5 billion, including at least ₹1,250 crore in India | More than US$15 billion, including at least ₹3,750 crore in India |
Test deal value and India operations
Clause (d) covers a transaction whose value exceeds ₹2,000 crore, provided the enterprise being acquired, merged or amalgamated has substantial business operations in India. 'Value of transaction' includes every valuable consideration, whether direct, indirect or deferred. Regulation 4(1) of the CCI (Combinations) Regulations, 2024 adds items such as separately agreed non-compete consideration, inter-connected steps, call options assuming full exercise, and best-estimate earn-outs.
Under regulation 4(2), the target has substantial business operations in India if, for digital services, its business users or end users in India are 10% or more of its global users; or its India gross merchandise value over the previous twelve months is 10% or more of its global figure and more than ₹500 crore; or its India turnover in the previous financial year is 10% or more of its global turnover and more than ₹500 crore. The ₹500 crore floors do not apply to digital services. Check this route even when assets and turnover are below the other thresholds.
Check the small-target exclusion carefully
Clause (e), read with rule 3 of the Competition (Minimum Value of Assets or Turnover) Rules, 2024, provides that an acquisition, merger or amalgamation is not a combination where the target's India assets are not more than ₹450 crore or its India turnover is not more than ₹1,250 crore. The clause applies 'notwithstanding' clauses (a), (b) and (c). It does not mention clause (d), so test the deal-value route separately.
Exemptions for particular categories of transaction sit elsewhere, mainly under Section 6 and the 2024 exemption rules.
How assets and turnover are measured
The amended Explanation fixes the method. Asset value is the book value in the audited accounts for the financial year before the year of the proposed combination, net of depreciation, and includes brand value, goodwill and listed intellectual-property rights. Turnover is the auditor-certified figure from the last available audited accounts; India turnover excludes intra-group sales, indirect taxes, trade discounts and amounts from customers outside India. Where only a division or business is being acquired or merged, use the figures attributable to that part.
Official sources
- Competition (Amendment) Act, 2023 (CCI copy) — section 6 amends section 5
- S.O. 3846(E), 9 September 2024 — 2023 amendment ss.6-8 in force from 10 September 2024
- S.O. 1130(E), 7 March 2024 — asset and turnover values raised by 150%
- Competition (Minimum Value of Assets or Turnover) Rules, 2024, G.S.R. 547(E)
- CCI (Combinations) Regulations, 2024 — regulation 4
- CCI Competition Advocacy Booklet 2026 — current thresholds table
- Competition Act, 2002 — principal text (CCI copy; amounts superseded)
Practical checklist
Do
- Map each acquisition, merger and connected step and identify the relevant enterprise and post-deal group.
- Obtain audited asset and auditor-certified turnover figures with the required India components.
- Calculate total transaction value including deferred, indirect and connected consideration.
- Test the target's substantial business operations in India and document the basis for any small-target exclusion.
Avoid
- Do not use the unadjusted amounts printed in the original Act as today's thresholds.
- Do not treat the small-target exclusion as automatically disapplying the deal-value test.
- Do not conclude that a transaction is outside Section 5 merely because the target's India revenue is low.
Glossary
- Combination
- An acquisition, merger or amalgamation meeting one of the Section 5 routes, subject to the clause (e) exclusion.
- Material influence
- The amended Act's test for control over management, affairs or strategic commercial decisions.
- Substantial business operations in India
- The India connection needed for the deal-value route, measured under regulation 4(2) of the 2024 Combinations Regulations.
Frequently asked questions
Is every acquisition above ₹2,000 crore reportable?
No. The deal-value route also needs the target to have substantial business operations in India, and Section 6 notice and exemption rules must still be checked.
Are the asset, turnover and deal-value tests cumulative?
No. Section 5 has alternative routes; crossing any applicable one can create a combination.
Does the ₹450 crore or ₹1,250 crore small-target rule remove the deal-value test?
Clause (e) refers to clauses (a), (b) and (c), not clause (d). Test clause (d) separately.
Need help applying this provision to your situation?
Contact BizeneedLast updated 11 October 2026