145;Competition Act may hamper India146;s economic growth146;

8220;India has reached a stage of development where scaling up to meet Chinese competition has become necessary. In order to achieve economies of scale, most Indian companies have to rely on M038;As. However, the Competition Act has come up at a time when this process should be stimulated and not deterred. The Act will only hamper M038;A activities but also FDI in India,8221; said Amit Mitra, secretary general of FICCI.

One of the main demands of the industry chamber, as articulated in the letter, is that the implementation of certain provisions of the Act be deferred until the Competition Commission of India CCI develops the requisite infrastructure and capabilities to enforce them.

Currently, the Act does not specify any quantitative thresholds for determining what would qualify as dominance of an undertaking or group, rather it specifies only qualitative restrictions. This, according to FICCI, is likely to lead to subjectivity and ambiguity, which might perpetuate 8220;inspector raj.8221; Further, even thresholds cannot be generalised and should be industry specific since one standard may not hold good for all industries.

Other problems with the Act include the unreasonably long time limit for clearance of proposals by CCI and the provision regarding international M038;A transactions. The Act requires notification to the CCI of any M038;A transactions involving foreign companies meeting certain minimal prescribed asset/turnover thresholds in India, even if the M038;A transaction has no competitive impact in India. Thus, according to FICCI this provision will only end up burdening the CCI with even those notifications of transactions, which have no commercial relevance in India.