Friday, March 4, 2011
I have written previously about the increase in outbound M&A activity by Indian firms. As I noted in my article “Rising Multinationals: Law and the Evolution of Outbound Acquisitions by Indian Companies,” changes in India’s regulatory regime have played an important role in the emergence of Indian multinationals. Extensive legal reforms since economic liberalization have set the stage for outbound acquisitions by Indian multinationals. However, I also argue that Indian law continues to impose significant constraints on the ability of Indian firms to engage in outbound acquisitions. Legal constraints limit the size of outbound deals as well as the methods that Indian multinationals use in pursuing outbound acquisitions, including limiting their ability to be creative in undertaking different types of acquisition structures.
It appears that the Confederation of Indian Industry (the CII is India's leading business association) has also turned its attention to these issues (HT: Indian Corporate Law Blog). In a recent press release, the CII points to some of the hurdles for Indian firms. According to the press release, the CII has submitted suggestions to the Department of Industrial Policy and Promotion, Government of India for creating a more “facilitative environment for transnational M & A activity of Indian corporates.” It will be interesting to see how the Indian government responds to the concerns expressed. In the past, the CII has had significant influence over the trajectory of Indian corporate law reforms.