Re-Evaluating India's Green Channel Regime

The introduction of the Green Channel Route ("GCR") in 2019 marked a watershed moment for India's merger control landscape. The Competition Commission of India ("CCI") having witnessed a steady increase in the volume and complexity of combination applications sought to create an approval mechanism that would reduce regulatory burden for combinations posing no apparent risk of appreciable adverse effect on competition ("AAEC"). Until then, all combinations as per the prescribed thresholds had to pass through the rather tedious Form I or Form II filings even when they were clearly benign. The GCR offered a solution wherein a framework was made under which certain combinations would be deemed approved immediately upon filing without any waiting period subject to the self-certification by parties that no horizontal, vertical or complementary overlaps existed or existing between them or their respective groups and affiliates.

In its initial year, the GCR was celebrated as a model of regulatory innovation. It captured the essence of India's ambition to bring ease of doing business reducing compliance hurdles and match jurisdictions like the EU and the US where simplified mechanisms provide for speedy combinations. However, recent trends reflect a stark departure from the accommodative and facilitative approach that had characterised the early GCR regime. In particular, CCI's orders from 2024 and 2025 reveal a rigidity in interpreting GCR eligibility criteria, thereby undermining the very purpose for which the mechanism was designed in the first place. This shift in enforcement coincides with other legislative developments which have rendered in a way the GCR less appealing.

Original Purpose of the Green Channel

The GCR was introduced through Regulation 5A of the CCI (Procedure in regard to the Transaction of Business relating to Combinations) Regulations, 2011 via an amendment notified in 2019. From its inception, its purpose was straightforward being enabling automatic approval for combinations that did not present any apparent AAEC. The model relied heavily on self-certification. If the parties declared that they had no overlaps of any sort, CCI would treat the application as deemed approved at the moment of filing. The logic behind this system was grounded in efficiency. Early orders of CCI suggest that the Commission itself viewed the GCR as a facilitative mechanism. In the initial years, the CCI adopted a broad understanding of the term 'no overlaps' at times recognizing that insignificant overlaps did not defeat the purpose of the GCR. These decisions helped build confidence among companies, private equity investors, and multinational conglomerates. The GCR soon became a preferred route for a wide range of acquisitions, particularly minority acquisitions and passive investment transactions.

Recent Shift in CCI Enforcement

A visible shift began to take place around 2023 and became unmistakable in 2024 and 2025. The CCI started interpreting GCR eligibility in an exceptionally literal manner. The CA Plume Investments order of 2025¹ in particular is illustrative of the changing stance. The acquirers had notified the CCI of their intention to acquire minority stakes in Quest Global Services Private Limited under the GCR certifying that their transaction did not involve competitive overlaps. However, upon detailed review of the parties' portfolios, CCI identified potential vertical and complementary overlaps involving certain affiliates.

CCI's reasoning demonstrated a stringent interpretation of overlaps. Rather than limiting itself to the core products and services of the direct parties to the transaction, the CCI scrutinized the activities of their wider portfolio companies. It noted that some customers of these portfolio entities were common to the target company. Such shared customer bases according to the CCI indicated that the products or services of the two sides could potentially be bundled together. Even though the acquirers admitted that they had unintentionally failed to recognize these overlaps and gave an unconditional apology the CCI imposed a penalty of four lakh rupees under section 43A of the Act. While it refrained from penalizing the parties under section 44, the order underscored that any overlap whatsoever no matter how irrelevant or commercially insignificant, automatically disqualified a transaction from the GCR.

A similar trend arises from the Platinum Jasmine order², where the CCI categorically held that the GCR's threshold criteria are 'specific' and 'objective' leaving no room for contextual interpretation. The CCI rejected arguments about intra-group restructuring and business discontinuation, insisting that even temporary, incidental or insignificant overlaps bar eligibility. Penalties were imposed under both sections 43A and 44 for what the Commission treated as materially false statements. There have been orders where the CCI went even further and identified minor supply chain arrangements characterized by the parties as ad hoc and de minimis as sufficient evidence of vertical or complementary relationships. It concluded that the GCR notice was void ab initio and imposed a penalty of ₹10 lakh. Even where market shares were negligible and the economic significance of the overlap was trivial, the CCI took the view that the legal requirement of 'no overlap' is unambiguous and absolute. These orders collectively signal that the CCI has moved towards a zero-tolerance approach to GCR filings. Parties can no longer rely on clarifications or post-notification dialogue with the regulator. Any mistake, however unintentional, carries substantial risk. As a result, businesses increasingly view the GCR as fraught with liability exposure rather than as a facilitator of regulatory efficiency.

Impact of 2023 Amendment

The 2023 amendment to the Act further complicates the landscape. Among other changes, it reduces the outer review timeline for combinations from 210 to 150 days and requires the CCI to form a prima facie opinion within 30 days. In practice, this means that most routine Form I filings are being cleared significantly faster than before. For many parties therefore, the practical benefit of the GCR's immediate deemed approval begins to lose its comparative appeal when weighed against the risks associated with misinterpretation or inadvertent errors in self-certification. The Amendment Act also revises the definition and assessment of 'control' including expanding the meaning of 'material influence'. As a result, even minority investments that carry the ability to influence strategic directions or essential commercial decisions may fall within the ambit of the merger control regime. This has two implications for GCR use. First, transactions involving minority investments frequently involve large investment funds or global conglomerates with wide-ranging portfolios, making it harder to prove the absence of overlaps. Second, the broader definition of control amplifies the risk of post-approval re-examination further discouraging parties from opting for the GCR.

Compounding Issue of Control in Indian Mergers

For years, Indian merger control jurisprudence has adopted one of the broadest interpretations of 'control' globally. Decisions such as Jet Airways/Etihad Airways³ and Century Tokyo Leasing/NSK⁴ exemplify a regulatory philosophy where even limited veto rights or affirmative protections may amount to control. The Competition Appellate Tribunal's ruling in PVR v. CCI⁵ reinforced that the relevant question is not the shareholding structure alone but the degree of influence conferred. When paired with the expanded affiliate definition under the Criteria Rules, this broad concept of control exacerbates the practical challenges of using the GCR. Even a minority acquisition can be considered a combination involving control if it grants the acquirer certain contractual rights. Consequently, many transactions involving investment funds or strategic investors become too complex for the GCR, even though they raise no plausible concerns of AAEC.

Comparative Lessons from Global Merger Control Practice

International merger regimes provide important guidance on how simplified procedures can remain effective without compromising enforcement integrity. The European Commission's Simplified Procedure Notice (2023) is available even when horizontal overlaps result in a combined market share of less than twenty percent and when vertically related markets reflect levels below thirty percent. In these cases, the Commission presumes that the risk of competitive harm is minimal. Minor overlaps are not treated as legal violations rather they are incorporated into the simplified review. The United States, while lacking a formal green channel frequently grants early termination of the Hart-Scott-Rodino waiting period for transactions that clearly do not raise substantive concerns. Importantly, early termination is granted despite the presence of small overlaps provided the overlaps are competitively insignificant. Singapore and the United Kingdom have also adopted flexible practices. Both maintain guidance frameworks that allow parties to obtain non-binding feedback from the regulator before deciding whether a simplified procedure is appropriate. These mechanisms reduce uncertainty and prevent inadvertent breaches. Compared to these jurisdictions, India's insistence on absolute zero overlaps appear unusually strict. Given the nature of modern business structures, especially the presence of diversified investment portfolios, complete absence of overlaps is rare. A requirement that is nearly impossible to satisfy risks undermining the policy objective of the GCR itself.

Conclusion

The Green Channel Route was envisioned as a progressive, business-friendly mechanism that would streamline non-problematic transactions, reduce regulatory burden and promote certainty in merger filings. However, the cumulative impact of the CCI's recent strict enforcement and the tightened timelines under the 2023 Amendment Act has led to a regime that is increasingly difficult to utilize and tense with compliance risks. As India seeks to strengthen its reputation as a business-friendly jurisdiction capable of attracting foreign investment and supporting dynamic domestic enterprises, it becomes essential to reassess the GCR framework. A recalibrated approach, one that permits minor overlaps in cases involving no acquisition of control, strengthens disclosure obligations and retains penalties for deliberate non-compliance can help restore the original purpose of the GCR. By aligning enforcement with economic reality and international best practice, the CCI can ensure that the GCR remains a valuable tool within India's competition law regime fostering efficiency without compromising its mandate to prevent anti-competitive combinations.

Footnotes

1. Combination Reg. No. C-2023/10/1066

2. Combination Reg. No. C-2022/12/1110

3. Combination Reg. No. C-2013/05/122

4. Combination Reg. No. C-2015/02/246

5. COMPAT Appeal No. 57/2015

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