GUN-JUMPING IN INDIA: NAVIGATING THE BOUNDARY BETWEEN PRE-CLOSING CONDUCT AND PREMATURE INTEGRATION

Gun-jumping has become an important concern in Indian merger-control regulation. It arises when parties to a proposed combination implement the transaction, wholly or partly, before receiving the required approval from the Competition Commission of India (“CCI”). Although the standstill obligation under the Competition Act, 2002 is intended to preserve competition during the review period, its practical application is not always clear. M&A transactions commonly involve due diligence, information-sharing, pre-closing covenants and integration planning. These activities are necessary for completing a transaction, but they may also reduce the parties’ commercial independence. This paper examines the boundary between legitimate pre-closing conduct and prohibited gun-jumping in India. It analyses the statutory framework governing combinations, the standstill obligation under Section 6(2A) of the Competition Act, 2002, the Competition Commission of India (Combinations) Regulations, 2024, and relevant CCI decisions and guidance. It also considers the risks arising from premature transfer of control, exchange of commercially sensitive information and excessive pre-closing rights. The paper argues that India’s existing framework provides an essential basis for preventing premature implementation, but greater regulatory clarity is still required. A risk-based approach should distinguish between permissible transaction preparation, conduct requiring safeguards and activities that effectively implement the transaction before approval. Clean teams, restricted information-sharing, narrowly drafted covenants and documented compliance procedures can help manage these risks. The paper concludes that stronger guidance, rather than weaker enforcement, is necessary to balance effective competition protection with legitimate M&A activity.