The Indian Parliament, amid much protest from the Opposition, has recently seen the passage of the Competition (Amendment) Bill, 2022, designed to modify the Competition Act, 2002. Simultaneously, the Forest (Conservation) Amendment Bill, 2023 has also been introduced for consideration. These two critical pieces of legislation are generating interest due to their potential implications on India’s business environment and environmental conservation efforts.
The Competition Act and Its Administration
Introduced in 2002, the Competition Act was put in place to control competition within the Indian market, with prohibitions against anti-competition practices. These include cartels, market dominance abuse, or mergers and acquisitions that may diminish competition levels. Responsibility for applying and enforcing the Act lies with the Competition Commission of India (CCI). Forming an integral part of this system is the Competition Appellate Tribunal, established under the Competition Act itself, to regulate and hear appeals against decisions, rules, or orders made by the CCI. However, in 2017, it was replaced by the National Company Law Appellate Tribunal (NCLAT).
Proposed Amendments to the Competition Act
Several vital changes have been proposed for the Competition Act. Distinct amendments comprise of adjusting the interpretation of “turnover” to include global turnover from all services and products by an entity or individual. This opens up the scope for applying penalties for competition law violations based on an enterprise’s worldwide turnover as opposed to just its turnover within India. Additionally, timelines for approving combinations have been trimmed down, going from 30 working days to a flat 30 days. The aim is to expedite the endorsement process for Indian mergers and acquisitions.
The Bill also suggests revisions to the Competition Act, allowing for the regulation of mergers and transactions exceeding Rs 2,000 crore in value to be subject to CCI’s authority. A reduction in the timeline for the CCI to pass an order on such transactions, from 210 to 150 days, is also stipulated. Some offences have been decriminalized, with fines being replaced by civil penalties for instances such as failing to abide by CCI orders or Director General directives concerning anti-competitive agreements and the abuse of dominant positions.
The Competition (Amendment) Bill’s Potential Benefits
The Competition Act amendments propose to lower regulatory obstacles and foster ease of doing business in India. The revisions should provide more clarity for businesses operating within India and decrease companies’ compliance burden. By including global turnover in the “turnover” definition, transparency and accountability within the Indian market are likely to be enhanced.
The Forest (Conservation) Amendment Bill, 2023
The Forest (Conservation) Amendment Bill aims to augment clarity within India’s forest conservation laws and expedite strategic and security-related projects. The Bill intends to clarify the Forest (Conservation) Act, 1980’s scope, and extend the act’s reach, considering India’s goal to increase forest cover. This feeds into the broader objective of creating a carbon sink that can absorb an additional 2.5-3.0 billion tonnes of CO2 equivalent by 2030.
Additionally, the Bill proposes a new preamble to the Act, encapsulating India’s rich tradition of preserving forests along with their biodiversity. It also suggests exempting specific categories of lands from the Act. These include forest land adjoining rail lines and public roads, which give access to habitation, or road amenities up to a maximum size of 0.10 hectares, and forest areas within one hundred kilometers of international borders or lines of control. This is especially important in cases where these lands are expected to be used for strategic linear projects of national significance related to national security.
