Written by Mahadev Krishnan and Nitin Pradhan

I. INTRODUCTION  

Over the past few years India has successfully branded itself as a business-friendly jurisdiction by ensuring systematic removal of regulatory obstacles and acceleration of M&A approvals in various sectors. The change is especially evident in the competition law, as the Competition Commission of India (CCI) introduced the Green Channel Route (GCR) in 2019. The GCR is an automatic approval mechanism for M&A transactions that involve no horizontal, vertical, or complementary overlaps allowing such combinations to be “deemed approved” upon filing.

A competitive overlap arises when the businesses involved operate in the same or closely connected markets, creating the possibility of reduced competition. Such overlaps are typically of three kinds: horizontal overlaps, where parties are direct competitors in the same line of business (e.g., two food delivery platforms operating in the same market); vertical overlaps, where parties operate at different levels of the supply chain (e.g., a manufacturer and its distributor); and complementary overlaps, where the businesses operate in related or adjacent markets whose combination could still influence competition (e.g., hardware and software providers). It is consistent with the policy of making business easier and also guide to Department of Justice (DOJ), the primary antitrust enforcement authority in the US, of the Competition Law Review Committee (CLRC) report of 2019. The path waives regulatory delays for non-problematic deals. It transfers the onus of the self-analysis onto the parties. It places the responsibility of conducting a competition self-assessment on the parties to the transaction, rather than subjecting them to a detailed regulatory review. This shift enables a faster and more streamlined approval process for transactions that are evidently non-problematic. 

It means that companies themselves must check whether their deal raises competition concerns, instead of waiting for a detailed review by regulators. This makes the process quicker and more straightforward, giving faster clearance for deals that are clearly non-problematic. As envisaged under the larger plan of making India a more attractive destination to invest in, the GCR aims to cut down procedural bottlenecks in non-problematic transactions and transfer the regulatory burden to self-proclaimed compliance. Here, non-problematic transactions refer to mergers and acquisitions where there are no competitive overlaps between the parties 

Nonetheless, this transition to the trust-based regulation creates a new set of structural and legal intricacies. The GCR puts the whole burden of assessment on parties and leaves no discretion to CCI to review the assessment process, which creates regulatory opacity and subjects the process to misuse or misjudgement. This is especially worrying in the case of digitally converging markets where overlaps are usually indirect or non-conventional like data integration or platform interoperability that might not be reflected in standard indicators of competition.  The aim of this article is to critically address these tensions in the subsequent sections and present a reformist vision on how GCR can become a more efficient and legitimate compliance instrument. 

II. PRACTICAL CHALLENGES IN IMPLEMENTATION OF THE GCR 

The GCR was introduced to streamline India’s merger review process by providing automatic approval for transactions that do not raise competition concerns. However, its practical application has revealed legal and operational challenges, particularly for small and mid-sized enterprises, which may limit the effectiveness and accessibility of the framework. 

Blurred Lines: Unclear Eligibility Criteria 

Among the most important issues regarding the GCR is the ambiguity of the eligibility requirements. Although the framework is technically restricted to the combinations that have no horizontal, vertical, or complementary overlaps, the terms are still very contextual and differ greatly depending on the industry. 

In comparison, the jurisdictions such as the European Union are more accessible to benchmarks. The Simplified Procedure of the EU Merger Guidelines of 2013 allows expedited reviews of horizontal overlaps of less than 15 % market share, and vertical connections of less than 25 %. In absence of such guidelines, the Indian system invites uncertainty. It can result in either defensive over-compliance as eligible parties fear retaliation by the regulator and fail to file GCR, or incorrect filings that can subsequently attract attention. Consequently, the very purpose of fast tracking the low-risk deals is at times compromised. 

Self-Assessment Model: High Risk, No Support 

GCR process is purely self-assessment-based. Pre-filing consultations and informal feedback by the CCI are not possible. However, it is upon the notifying party to make a correct declaration. A wrong declaration whether willingly or unwillingly may earn a harsh punishment. This poses a high-risk situation, particularly when it comes to firms that cannot afford the services of experienced competition law experts. 

 A considerable number of legal departments, especially those that belong to smaller or mid-range companies, do not even participate in the GCR even though they are eligible to do so because they do not want to risk reputational and financial losses in case they do not comply with it. The CLRC report of 2019 also noted that Enterprises that operate with minimal legal infrastructure has a significant challenge in identifying the possibility of overlaps without professional help. 

No Pre-Approval Review: CCI’s Hands Tied 

Another integral issue with GCR is that it does not provide CCI with an opportunity to scrutinize a deal prior to its approval. According to Section 6 (2)(a) of the Act, when a GCR filing is filed, this is automatically considered approved. It implies that the CCI will be unable to intervene-despite subsequent detection of competitive overlaps either inadvertently or through the intricate nature of deal structures that become obvious only after the deal has been closed. 

This inflexibility is particularly dangerous in rapidly changing industries such as technology, where unseen overlaps, such as sharing of user data, backend systems, or AI platforms, might not be apparent at the time of filing. Although the CCI considered this problem in its 2022 M&A FAQs, it cannot be corrected or withdrawn in case of any issue with a GCR filing. Because the GCR focuses only on speed, it reduces the CCI’s chance to step in early and stop possible harm. Although the motive of the mechanism is noble, its present form puts the companies as well as the regulator at unnecessary risks. To make the GCR more effective, the design has to be rebalanced to enable faster clearances without sacrificing the regulatory oversight 

III. REFORM BLUEPRINT FOR FIXING GCR 

When it comes to making the GCR more effective and not having to sacrifice on regulatory safeguards, a pyramid or multi-level model of reform would be needed. For a start, bringing in materiality thresholds linked to market share, or turnover (e.g., combined share <15%) would provide an objective sense of what is a “non-problematic” deal and diminish the risk of arbitrary self-assessment. Secondly, instituting an optional but strongly encouraged consultation phase, akin to the EU’s informal “case team” system, could enable parties with doubts to confirm eligibility without slowing down clear-cut cases. Third, creating safe harbours for good faith errors through changes to Section 43A  of the Act, would shield well-intentioned actors from being penalized, including those who exercise due care yet misunderstand complicated market forces. This would help in fostering greater uptake of GCR while discouraging abuse. Fourth, random post-facto audits, akin to slaps on tax or GDPR checks at random, would serve a deterrent against abuse while safeguarding the speed advantage. Lastly, sectoral carve-outs particularly for high-risk sectors such as digital markets or telecoms or pharmaceuticals would help to ensure that GCR is not applied where competitive injury is more difficult to assess.  

IV. BUSINESS RISKS IN THE GCR REGIME 

The GCR was initiated in India to speed up merger approvals on deals that raised no serious competition issues. Nonetheless, most companies are reluctant to adopt it even though it is meant to make the process easier. This is primarily due to high compliance risk in that it is a self-assessment model and lacks regulatory guidance. As per Section 43A of the Act, wrong applications even though made innocently may be punishable by a maximum of INR 1 crore. This pressurizes the businesses to ensure that they get the eligibility assessment right, without necessarily having sufficient support. Smaller companies, as well as those operating in complicated industries such as fintech, SaaS, or digital platforms, are particularly wary. In these sectors, overlaps can be concealed in data sharing, software tools, or backend infrastructure that is not always clear when analysing GCR. 

International transactions increase the level of confusion, as various jurisdictions use different standards to determine competitive overlaps. Furthermore, GCR does not provide safe harbours and special treatment to obviously low-risk transactions– for example, mergers between companies operating in completely unrelated markets or with very small combined market shares. Instead, any transaction, no matter how little it affects competition, is subject to the same rigorous stipulations. There is a lack of clearer guidance or flexibility, and businesses either do not use GCR or do so with much caution. The real benefit of the Green Channel can only be realized when regulators consider establishing materiality limits, pre-filing advice or post-filing safety nets. Until then, GCR will be a well  meaning, but underutilized tool that will be weighed down by its own risks. 

V. CONCLUSION  

In conclusion, GCR is a visionary approach towards quick and low risk merger clearances in India. Nevertheless, its existing self-assessment framework, which does not contain materiality limits, review controls, and transparency, has posed significant business risks.  Business enterprises particularly in cross-border or data-oriented industries tend to shun GCR because of the fear of sanctions and regulatory gaps. The lack of pre-approval checks binds the hands of the CCI and leaves both sides and regulators with post-deal issues. In order to make GCR more suitable, India has to shift to a “trust-but-verify approach” that is, they need to introduce clear guidelines, proportional punishment, and review rights with restrictions. It is only then that the regime can balance certainty of investors and competitive accountability.