Navigating Regulatory Approvals in India’s Food Industry M&A

India’s food industry, valued at approximately $389 billion in 2025 and projected to reach $700 billion by 2030, is a vital engine of economic growth, contributing ~8.9% to agricultural Gross Value Added (GVA) and employing millions. Spanning agri-processing, packaged foods, beverages, quick-service restaurants (QSRs), food delivery, cold chain logistics, and nutraceuticals, the sector is witnessing a surge in Food M&A activity. Consolidation, demand for health-focused brands, and premium product segments are driving strategic deals. However, securing regulatory approvals is critical to ensuring lawful, transparent, and successful mergers. This article, informed by a hybrid consulting lens blending management, finance, legal, and technology expertise, equips senior leaders in India’s food industry with actionable strategies to navigate regulatory approvals and unlock long-term value.

Understanding Regulatory Approvals in Food M&A

Regulatory approvals in Food M&A encompass a complex framework ensuring compliance with legal, safety, and competitive standards. These approvals are not mere formalities; they are pivotal to achieving deal clearance and ensuring seamless post-merger operations. Key aspects include FSSAI compliance, adherence to merger regulations, and sector-specific scrutiny. Several authorities oversee these processes:

• Food Safety and Standards Authority of India (FSSAI): FSSAI compliance is non-negotiable, covering manufacturing licenses, product registrations, packaging, labeling, and hygiene standards. M&A transactions often require transferring or reapplying for these licenses to maintain operational continuity.
• Competition Commission of India (CCI): The CCI enforces merger regulations, reviewing deals exceeding asset or turnover thresholds to prevent anti-competitive practices. Securing CCI approval is essential for deal clearance.
• Securities and Exchange Board of India (SEBI): For listed entities, SEBI ensures transparency and protects shareholder interests during M&A.
• Ministry of Food Processing Industries (MoFPI): Entities under the Production Linked Incentive (PLI) scheme may require MoFPI approvals.
• GST Council: Indirect tax implications, including asset and liability transfers, necessitate GST compliance.

Navigating these regulatory approvals demands meticulous planning and cross-functional alignment.

1. Recent Developments (as of June 2025)

The regulatory landscape for Food M&A is evolving rapidly, with significant updates impacting deal strategies:

• CCI Merger Regulations: In September 2024, the CCI introduced a revised merger control regime, including a Deal Value Threshold (DVT) and updated definitions of “control.” These changes, clarified in the CCI’s May 2025 FAQs, expand the scope of deals requiring notification, particularly mid-market food transactions. For instance, deals involving digital food delivery platforms now face heightened scrutiny due to their market influence.
• FSSAI’s Enhanced Scrutiny: FSSAI has tightened post-merger compliance integration, with new 2025 policies mandating stricter packaging and labeling standards (effective July 1, 2025) and enhanced food safety audits. Restrictions on antibiotic use in food-producing animals, effective April 1, 2025, further complicate compliance for meat and dairy M&As. Post-merger, unified FSSAI compliance systems are rigorously evaluated.
• Deal Clearance Timelines: Tech-enabled regulatory platforms have reduced processing times by 20–30% in some cases. However, complex multi-state approvals and increased CCI scrutiny can still extend timelines, requiring proactive submissions.
• 2025 Budget Implications: The Union Budget 2025-26 emphasizes agriculture, MSMEs, and exports, indirectly supporting Food M&A through infrastructure investments and ease-of-doing-business reforms. While no direct M&A tax incentives were announced, simplified GST processes and PLI scheme expansions offer financial structuring opportunities.

These developments underscore the need for strategic foresight in securing regulatory approvals.

2. Regulatory Approval Process: Step-by-Step

Mastering regulatory approvals requires a structured approach to ensure compliance and expedite deal clearance:

1. Pre-deal Due Diligence: Conduct comprehensive legal, operational, and FSSAI compliance audits. Verify all FSSAI licenses, product registrations, and past compliance records. Identify red flags, such as expired licenses or unresolved enforcement actions, to mitigate risks early.
2. Filing Requirements: Submit accurate applications to FSSAI, CCI, SEBI (for listed entities), and MoFPI (for PLI-linked entities). Ensure filings align with the latest merger regulations and thresholds to avoid rejections.
3. Approvals for Brand Transfers and Licenses: Secure regulatory approvals for transferring manufacturing licenses, product registrations, and brand intellectual property. This step is critical to maintain market presence and operational continuity post-merger.
4. Timelines and Bottlenecks: Anticipate typical timelines CCI approvals may take 30–90 days, while FSSAI license transfers can vary by state. Common bottlenecks include incomplete documentation, multi-state compliance variations, or CCI concerns about market dominance. Address these proactively to ensure smooth deal clearance.

3. Key Challenges & Risks

Navigating regulatory approvals presents several challenges that can derail Food M&A:

• Multi-State Complexity: India’s federal structure creates variations in state-level FSSAI requirements, complicating regulatory approvals for companies with widespread operations. Delays in one state can stall the entire deal.
• Overlooked FSSAI Licenses: Failure to identify or transfer all necessary FSSAI licenses risks operational disruptions, penalties, or product recalls, undermining deal value.
• Post-Merger Compliance Integration: Inconsistent FSSAI compliance systems across merged entities can lead to non-compliance, especially under stricter 2025 regulations. Unified systems are essential for sustained regulatory approvals.
• Enforcement Risks: Non-compliance with FSSAI or CCI merger regulations can trigger fines, operational restrictions, or deal reversals, causing significant financial and reputational damage.

4. Strategic Implications Using Hybrid Consulting Lens

A hybrid consulting approach integrating management, finance, legal, and technology optimises the regulatory approval process:

• Legal Strategy: Map all required regulatory approvals early, conducting thorough FSSAI license audits and CCI threshold assessments. Anticipate competitive concerns and prepare robust justifications to expedite deal clearance.
• Financial Strategy: Structure deals to account for regulatory approval timelines, using conditional payments or escrow arrangements to manage risks. Budget for compliance upgrades to address any identified gaps.
• Operational Strategy: Standardise post-merger FSSAI compliance systems, aligning food safety protocols, quality controls, and reporting across all facilities. This ensures ongoing compliance and operational efficiency.
• Technology Enablement: Leverage AI-driven due diligence tools to identify compliance gaps quickly. Use compliance automation platforms to manage license renewals and track regulatory changes. Deploy deal clearance tracking systems to monitor progress across FSSAI, CCI, and other bodies, ensuring no delays in regulatory approvals.

Illustrative Examples

Real-world cases highlight the stakes of mastering regulatory approvals:

• Case: Packaged Snack Brand Acquisition Delay
  A leading FMCG company acquired a regional packaged snack brand with a strong market presence. During due diligence, the acquiring firm overlooked expired FSSAI licenses for two manufacturing plants and failed to verify product registrations for certain SKUs. Post-deal, FSSAI flagged these discrepancies, requiring re-applications and halting production at the affected facilities. The delay in securing regulatory approvals extended the deal timeline by five months, incurring $2 million in additional costs and eroding projected synergies. Early FSSAI compliance audits could have prevented this setback.
• Case: QSR Merger Streamlined with Technology
  Two QSR chains merged, integrating 400 outlets across 15 states. By deploying a tech-enabled platform for regulatory approvals, the companies centralised FSSAI license data, automated CCI filing preparations, and tracked deal clearance progress in real time. This reduced manual errors, ensured compliance with 2025 FSSAI labeling standards, and cut approval timelines by 35% (from 120 to 78 days). The platform’s predictive analytics also flagged potential CCI concerns early, enabling proactive mitigation. This case underscores how technology can transform regulatory approvals.

Conclusion

In India’s thriving food industry, regulatory approvals are the linchpin of successful Food M&A. Proactive FSSAI compliance, adherence to CCI merger regulations, and streamlined deal clearance processes are critical to unlocking deal value. By adopting a hybrid consulting approach blending legal precision, financial foresight, operational alignment, and technology enablement senior leaders can navigate the complex regulatory landscape. With LawCrust expertise, companies can master regulatory approvals, mitigate risks, and drive sustainable growth in India’s dynamic food sector.

About LawCrust

LawCrust Global Consulting Ltd. delivers cutting-edge Hybrid Consulting Solutions in Management, Finance, Technology, and Legal Consulting to ambitious businesses worldwide. Recognised for our cross-functional expertise and hybrid consulting approach, we empower startups, SMEs, and enterprises to scale efficiently, innovate boldly, and navigate complexity with confidence. Our services span key areas such as Investment Banking, Fundraising, Mergers & Acquisitions, Private Placement, and Debt Restructuring & Transformation, positioning us as a strategic partner for growth and resilience. With an integrated consulting model, fixed-cost engagements, and a virtual delivery framework, we make business transformation accessible, agile, and impactful.

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