The recently published FAQs by the CCI clarify that any joint venture involving a transfer of assets will have to be notified to the CCI under the Combination Regulations.

Background
 
The Competition Commission of India (CCI) regulates combinations i.e. acquisitions, mergers and amalgamations that cross certain assets and turnover thresholds prescribed in the Competition Act, 2002 (Competition Act).  Such combinations are required to obtain prior approval of the CCI in the manner provided  under the Competition Act and the Competition Commission of India (Procedure in regard to the transaction of business relating to combinations) Regulations, 2011 (Combination Regulations).
 
Since the definition of combinations under the Competition Act does not refer to joint ventures, the circumstances in which joint ventures were required to be notified to the CCI under the Combination Regulations was unclear.  Even in CCI orders pertaining to combinations involving joint ventures, this question remained largely unanswered.  Given this lack of clarity, market participants have been notifying the CCI only where a joint venture is formed by transfer of 'revenue generating' assets from the parents to the joint venture i.e. a brownfield joint venture.
 
The CCI has recently published FAQs clarifying various aspects relating to combinations.  One of the key clarifications released under these FAQs is in relation to filing requirements under the Combination Regulations for joint ventures.
 
FAQs published by the CCI
 
The FAQs clarify that if the creation of a joint venture involves a transfer of 'assets', then subject to prescribed thresholds being met, prior approval of the CCI will have to be sought by making the requisite filings under the Combination Regulations.  The FAQs do not draw any distinction between transfer of 'revenue' and 'non-revenue' generating assets, thereby removing the distinction between brownfield and greenfield joint ventures for the purposes of notifying the CCI.
 
It therefore appears that the CCI will treat joint ventures involving asset transfers as acquisition of control over transferred assets through the medium of joint venture, consequently requiring CCI's prior approval.  The following example further illustrates the CCI's position on this:
 
Entity A and Entity B set up Entity C as a joint venture and Entity B transfers certain assets to Entity C.  The CCI will treat this as Entity A acquiring control over the assets of Entity B through the medium of the joint venture Entity C.
 
In the above illustration, the assets and turnover of Entity B will be attributed to Entity C for the purposes of threshold analysis.
 
Since the FAQs provide for the notification of the creation of a joint venture where one or more of the joint venture parties transfer its assets to the joint venture company, it follows that where no asset transfer is involved, market participants can continue to form joint ventures without seeking CCI's prior approval.
 
Therefore, parties proposing to enter into joint ventures will have to factor in filing requirements with the CCI and the time required to obtain CCI's approval within transaction timelines.  Usually the CCI passes its prime facie order within six to eight weeks of the notice being filed.