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Enforcement laws heighten the stakes in India

Enforcement laws heighten the stakes in India

Organisations doing business in India are up for some significant changes this week, after India's competition enforcement laws came into effect. The new laws are likely to present some…

Organisations doing business in India are up for some significant changes this week, after India's competition enforcement laws came into effect.

The new laws are likely to present some significant changes for companies doing business in India, given that the country has not previously had effective enforcement around competition law.

Linklaters reports that the Competition Commission of India (CCI) will initially focus its efforts on restrictive agreements, especially cartels, as well as abuses of dominant positions. Merger regulation will follow at a later date.

The CCI will hold some significant powers, including the ability to impost hefty fines - not just on firms, but individuals also.

Jonas Koponen, competition and antitrust partner at Linklaters, said the changes will present challenges for both Indian and overseas businesses.

"The CCI has signalled it has the ambition to introduce an enforcement policy that is completely new to India," said Koponen.

"In such situations, the stakes can quickly become high - as we have seen, for instance, in China."

Sandeep Katwala, head of Linklater's India Group, said the firm hopes the CCI won't rush to regulate mergers and acquisitions, and instead will ensure that time is taken to establish the future rules.

"A new system that is unpredictable, burdensome and slow would hamper the growth of India's economy," he said.

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