The US has taken a serious issue with India’s new competition law that requires foreign companies to seek regulator’s approval for mergers and acquisitions made anywhere in the world.
In a report submitted to the Congress, the US Trade Department has said it has taken up the issue with the Indian Government to change the new regulation governing M&As under the amended Competition Act.
“The United States is working with industry, foreign governments, and Indian companies and industry groups to persuade the government to promulgate regulations under the new law to correct the most problematic aspects of the M&A provisions,” the National Trade Estimate Report 2008 has said.
In September 2007, the Indian government introduced new merger control amendments to its Competition Act. The merger and acquisition provisions, once notified, would require foreign companies, including those with a limited access to Indian markets, to seek approvals for M&As made anywhere in the world, even outside India and the company’s home country.
Under the new law, the government would impose a 210-day waiting period before the transaction could take place, even if it would have little or no impact on business within India.
“If enacted, a broad swath of global mergers and acquisitions will be potentially caught up in this new law,” the NTE report, prepared by the Office of US Trade Representative, said.
Via Times of India