Navigating Regulatory Documentation in India’s FMCG M&A Landscape

India’s Fast-Moving Consumer Goods (FMCG) sector, valued at USD 211 billion in 2025 with a projected CAGR of 21.8% through 2034, continues to drive economic growth and employs over 10 million people. Fueled by rising incomes, urbanisation, and digital penetration in Tier 2 and Tier 3 cities, the sector experiences robust merger and acquisition (M&A) activity. Moreover, consolidation in sub-segments such as personal care, food and beverages, home care, and direct-to-consumer (D2C) brands is accelerating. Companies aim to acquire innovative startups to expand market share and diversify portfolios.

Regulatory documentation plays a critical role across the M&A lifecycle—ranging from due diligence to deal structuring and post-deal integration. It ensures compliance and reduces legal and financial risks. Key regulatory bodies, including the Competition Commission of India (CCI), Securities and Exchange Board of India (SEBI), Food Safety and Standards Authority of India (FSSAI), Department for Promotion of Industry and Internal Trade (DPIIT), Central Pollution Control Board (CPCB), and Goods and Services Tax (GST) authorities, impose strict regulatory documentation requirements. As a result, companies must adopt a proactive and structured approach to remain compliant.

Recent Developments Shaping Regulatory Documentation (June 2025)

• As of June 2025, a series of policy shifts and reforms are reshaping M&A activity, thereby increasing the demand for accurate regulatory documentation.

1. PLI Scheme Expansion: The Production-Linked Incentive (PLI) scheme, with a USD 1.46 billion allocation for food processing, encourages domestic production. Consequently, M&A deals involving PLI-eligible entities require detailed regulatory documentation, such as factory certifications and export compliance records. Failure to comply could lead to loss of benefits and impact deal valuations adversely.
2. ESG Mandates: Furthermore, enhanced Environmental, Social, and Governance (ESG) regulations—particularly CPCB’s Extended Producer Responsibility (EPR) guidelines—now mandate packaging waste audits. Companies must include ESG transition reports as part of their regulatory documentation, especially during acquisitions in home care and personal care segments.
3. FSSAI Guidelines: In addition, FSSAI has implemented stricter rules for food safety in M&A transactions. Updated licences and quality assurance documentation are now mandatory. Hence, any acquisition in food and beverages demands thorough scrutiny of the target’s regulatory documentation to avoid post-merger disruptions.
4. SEBI’s Simplified Norms: SEBI has simplified disclosure norms for listed entities, thereby streamlining M&A filings. However, precise and transparent regulatory documentation remains vital to maintain investor confidence and secure quick approvals, especially for large firms like Dabur or Godrej Consumer.
5. Budget 2025 and GST Measures: The government has reduced GST on mass-consumption FMCG goods from 18% to 12%, which enhances affordability. Simultaneously, revised capital gains tax norms and import duty deferments necessitate updated tax-related regulatory documentation to ensure financial accuracy.

1. Key Documentation Categories in FMCG M&A

A robust M&A transaction depends on timely and accurate regulatory documentation across three major phases:

• Pre-Deal Compliance Checks

Before entering into a transaction, companies must validate:

1. FSSAI Licences: Confirm validity for production, storage, and distribution.
2. CPCB Clearances: Ensure adherence to pollution control and waste disposal norms.
3. Factory and Labour Certifications: Verify compliance with the Factories Act, EPF, and ESIC obligations.
4. CCI Thresholds: Submit comprehensive regulatory documentation covering market impact to obtain CCI approval, especially for large-scale acquisitions.

• Deal Structuring Documents

During negotiations, the following documents are essential:

1. Share Purchase Agreements (SPAs): Include terms, representations, warranties, and compliance obligations.
2. Valuation Fairness Opinions: Depend on past and forecasted regulatory documentation to assess risks.
3. Board Resolutions: Formally authorise the transaction.
4. Tax Certifications: Include GST and direct tax clearances.
5. Foreign Exchange Documentation: Ensure FEMA compliance, particularly for deals under the 51% FDI allowance in multi-brand retail and 100% in food processing.

• Post-Deal Integration Files

After the acquisition closes, companies must update:

1. Revised Licences: Reflect new ownership across FSSAI, CPCB, and factory registrations.
2. Brand Transfers: Document IP ownership changes.
3. GST Registrations: Update details to enable uninterrupted tax credits.
4. Vendor Contract Novations: Ensure third-party contracts are supported by valid regulatory documentation.
5. ESG and Consumer SOPs: Formalise sustainability policies and grievance redressal mechanisms in accordance with CPCB and consumer laws.

2. Challenges in Regulatory Documentation

• Despite its importance, regulatory documentation remains complex and time-consuming:

1. Fragmented State-Wise Requirements: Different states have inconsistent documentation norms for FSSAI and labour compliance, making harmonisation difficult.
2. Inconsistent Approvals: Moreover, overlapping roles between local, state, and central agencies cause approval delays.
3. Misaligned Timelines: Business deal cycles often move faster than regulatory bodies. For instance, CCI reviews may take 30–60 days, affecting deal momentum.
4. Legal Ambiguities: In contrast to global best practices, India’s evolving rules around labelling, IP rights, and EPR create ambiguity and expose companies to post-acquisition risks.

3. Strategic Consulting Insights for Regulatory Documentation

• To convert regulatory documentation from a compliance burden into a strategic advantage, leaders must act holistically:

1. Legal Advisory: Set up digital deal rooms for centralised regulatory documentation access and real-time audit readiness. Engaging legal experts early mitigates compliance gaps.
2. Technology Enablement: Implement contract lifecycle management (CLM) systems, automated alerts, and compliance dashboards to enhance visibility and reduce administrative errors.
3. Operational Support: Conduct thorough pre-deal health checks for documentation compliance. This step ensures smoother transitions and less disruption during integration.
4. Finance Strategy: Structure deals with escrow clauses and indemnity holdbacks tied to regulatory documentation milestones. Doing so protects against post-closing liabilities and enhances deal safety.

Illustrative Case Examples

• Packaged Food Deal: A packaged food MNC acquired a D2C snacks startup. However, misaligned FSSAI licence renewals and unreported EPR liabilities delayed integration by two months. A last-minute regulatory documentation audit exposed multiple gaps that required immediate legal resolution.
• Household Care Merger: In contrast, a household care conglomerate executed a multi-state merger using a legal-tech platform to track and update regulatory documentation. As a result, they completed integration three weeks ahead of schedule—demonstrating how automation improves deal velocity.

Conclusion

In India’s rapidly evolving FMCG landscape, mastering regulatory documentation is more than a compliance task—it is a strategic necessity. By aligning legal, operational, financial, and technological strategies, senior leaders can safeguard transactions, reduce friction, and maximise value. Furthermore, by customising documentation frameworks and leveraging tools like CLM systems, companies can stay ahead of regulatory changes. Partnering with advisors like LawCrust provides the hybrid expertise needed to navigate complexities and execute M&A deals with confidence and speed.

About LawCrust

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