Parliament House India
Parliament House of India, New Delhi. Image Credit: Gulf News archives

New Delhi: India moved a step closer to empowering its antitrust watchdog to vet overseas mergers and acquisitions, tightening Prime Minister Narendra Modi’s regulatory grip over how Big Tech firms operate in the country.

Lawmakers in the lower house of India’s parliament Wednesday passed the bill seeking to amend the competition law, which includes a requirement for companies with “substantial business operations” in the country to seek antitrust permissions for all deals where the transaction value exceeds 20 billion rupees ($243 million). Until now, the Competition Commission of India examined deals based on companies’ asset size and turnover.

The bill still needs to be passed by the parliament’s upper house before it becomes law.

New Delhi’s antitrust push echoes competition law in European nations such as Germany and Austria that follow the deal-value threshold for mergers in the digital space. The government has said it is revamping Indian laws to making the Internet safe, trusted and accountable for its more than 800 million users as well as boosting a thriving startup economy.

India has also borrowed from China’s playbook where Beijing has tightened its oversight on mergers of foreign companies 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 might have been the largest-ever deal in the chip industry.

“A number of cross-border deals will be affected with the new deal value thresholds, said Anisha Chand, a partner at law firm Khaitan & Co. overseeing competition and antitrust. “This will likely inflate deal costs and increase compliance burdens, especially on global companies which are betting big on India’s booming tech economy.”

The changes to India’s competition law, come as tech giants including Meta Platforms Inc., Alphabet Inc.’s Google and Amazon.Com Inc. layoff thousands to become more efficient amid a faltering global economy.

India, one of the world’s biggest web services market, is a key growth region for all major US Internet companies. But it’s also a market where Apple Inc. and Amazon are facing antitrust pressures, and Google has had to tweak its Android mobile operating system and the app store to comply with the Competition Commission of India’s orders.

The new competition law also cuts down the time for approval of mergers to 150 days from the previous 210 days to expedite the approval process.

The legislation was passed in the lower house without discussion amid uproar by lawmakers.