India has rewritten much of the rulebook for mergers and acquisitions in recent years, with legislative reforms and a liberal foreign investment policy making 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.
Indian acquisitions continue to be implemented through a familiar set of routes, including the fast-tracking of the merger route, which replaces the National Company Law Tribunal (NCLT) process with approval by the central government. This fast-track procedure applies to mergers between two or more small companies, and between a holding company and its wholly owned subsidiary, as well as to startup companies and to a foreign holding company merging into its Indian wholly owned subsidiary.
The fast-track procedure also applies to mergers between two or more unlisted companies, a holding company and its subsidiary, and two subsidiaries of the same holding company, reducing both the time and cost of restructuring for corporate groups undertaking consolidation.
Competition clearance is now one of the aspects to plan for on any sizeable deal, with the Competition Commission of India (CCI) requiring prior approval for transactions that cross the asset and turnover thresholds in the Competition Act, 2002. A significant change is the introduction of a deal value threshold, with any transaction valued at more than INR20 billion requiring notification where the target has substantial business operations in India.
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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. 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, and the review period has been cut to 150 days.
Foreign Exchange Management (Non-Debt Instruments Rules) still decides whether an inbound acquisition proceeds under the automatic route or needs prior government approval, with three developments standing out. Insurance has been opened to 100% foreign investment, the restrictive land border regime has been eased, and access by non-resident individuals to listed markets has been expanded to the Portfolio Investment Scheme.
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%. 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.
The Reserve Bank of India (RBI) has allowed Indian banks to finance acquisitions, with a bank able to 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, with conditions applying, including that the borrower must be an Indian non-financial company with net worth exceeding INR5 billion and profit after tax in each of the past three years.
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 Insolvency and Bankruptcy Code (IBC) remains a central route for acquiring distressed businesses, with a resolution plan allowing an acquirer to take over a company free of its past liabilities once it is approved by the NCLT.
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The IBC (Amendment) Act, 2026, introduces a creditor-initiated insolvency resolution process, 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, although the practical test will be how the timelines hold up once the provisions are notified and litigated.
Indian M&A in 2026 is characterized by the cumulative effect of many reforms, with merger control going further than before, foreign investment policy more open, banks able to finance acquisitions for the first time, and insolvency being made quicker and more flexible. 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.
Acquirers must line up the overlapping approvals and plan for them early. India remains a market full of opportunity for well-advised acquirers, with the task being to understand the M&A market trends and secure the necessary approvals.
Deals will require careful planning and execution to handle the complex regulatory setting.
