Introduction
The Ministry of Corporate Affairs (“MCA”) has just expanded the Fast Track Merger (“FTM”) route under Section 233 of the Companies Act, 2013, by releasing the Companies (Compromises, Arrangements and Amalgamations) Amendment Rules, 2025, amending Rule 25 of the 2016 rules that govern mergers and restructuring under the Act. As a result, the frameworks for Indian corporate mergers and restructuring are entering a new era of being faster, more efficient, and more transparent.

The foundation stone for the simplified FTM process in reverse flip transactions was already set by the 2024 amendment to the rules, which made the procedural requirements easy and expanded the ‘small company’ thresholds to allow Indian private holding companies to undertake FTM with their Indian subsidiary. And the 2025 reforms have made it even more business-friendly by removing the classification hurdles after expanding the FTM route open for use to newer classified entities. Moreover, by introducing the responsibilities of the auditors and companies, the amendment fosters a culture of self-regulation and disclosure in the corporate landscape.

The next sections of this article will reveal how the merger landscape in India has changed with the 2025 amendment, who can use the FTM route now, how the process has been made easier, and why the auditor is more responsible now to ensure that everything is in place correctly. It will also explain how the governance regulations of the Securities and Exchange Board of India (“SEBI”) and the Reserve Bank of India’s (“RBI”) regulations for overseas investment collectively make the merger process clearer, and how drawing a comparison with the merger models of the United Kingdom (“UK”), Singapore, and the United States (“US”) shows that the 2025 Indian reforms bring the nation closer to top international standards while fostering openness, accountability, and investor trust.

Need for the Amendment: Practical Gaps in the Existing FTM Framework
The FTM route under Section 233 was formulated as an enabling process to make merging easier, yet it was restricted to two main categories, i.e., mergers between two or more small companies and between a holding company and its wholly owned subsidiary. Because large unlisted and holding companies were left out, they had to rely on the lengthier National Company Law Tribunal (“NCLT”) route under Section 232.

Facts from recent internal restructurings of big groups like Vedanta Ltd. have already shown how procedural logjams and tribunal reliance can hold back even the most harmonious and financially healthy businesses. Similarly, in 2024, some Indian startups involved in cross-border mergers and reverse flip transactions highlighted the need for a speedy, less rigid, smaller tribunal-centric regime, and the same was reported to the MCA by an industry group known as the Startup Policy Forum (“SPF”), which represents 50 new-age companies.

In light of these industry realities, the amendment changes the rules significantly by introducing a new sub-clause to Rule 25 (1A), which is the FTM route that is now opened up to a wider set of companies. Any unlisted company, except for Section 8 companies, holding companies, and their subsidiaries, whether listed or unlisted, is now allowed to use this route if their total outstanding debt, which includes loans, debentures, or deposits, is not more than ₹200 crore and has no default on borrowings.

The Evolving Landscape of Fast-Track Mergers
The prima facie and most emphasised part of this amendment is the expanded scope of the FTM route. But the less paid-attention-to yet crucial objective of the reform is to bring accountability and transparency into it, and not just to enhance the speed and simplify the merger process. As this commendable reform substituted the long and time-consuming NCLT’s oversight with a Regional Director (“RD”) supervision, it is a transition based on professional accountability (Note: it applies to the FTM route under Section 233 only and not to all merger schemes). Instead of tribunal there is a strategic dependence on company auditors, as such auditors are given the responsibility of thoroughly checking and confirming that companies follow financial and legal regulations, thus allowing for the early identification of issues that can be dealt with beforehand, hence shareholders and creditors being more protected. This shifts the system toward self-regulation, combining faster decisions with greater accountability and transparency.

Comparative Perspective: Aligning with Global Best Practices
The restructuring frameworks at the global level have been made very simple and easy to comply with. For instance, in the UK, the merger and reconstruction processes are governed by Sections 895-901 of the Companies Act, 2006 (Part 26), and the court plays a supervisory role, which is streamlined and less time-consuming. The main idea here is to promote ease of doing business and let companies reorganise internally without going through lengthy processes. Likewise, in Singapore, Section 210 of the Companies Act 1967 contains provisions for the pre-packaged schemes, where the terms of merger are decided and agreed in advance, and the court mainly gives final approval after the required majority of the members approves the merger, which in return helps save time and cost.

In the US, specifically under Delaware law, there is a concept of short-form merger governed by Section 253 (applies when the parent owns at least 90% of the subsidiary) of the Delaware General Corporation Law (DGCL), wherein a merger between a parent company and its wholly owned subsidiary is permitted without having approval from the shareholders, making the process seamless and fast.

After doing a comparative analysis of these jurisdictions with India, it can be seen that the FTM process under section 233 of the act relies on a system that is driven by regulation at multi-tiers. Whereas in jurisdictions like the UK and Singapore, courts are involved primarily to ensure fairness; moreover, the process is simpler in Delaware, as they do not even require approval in certain situations. In contrast, in India it is required to carry out detailed inspections by the RD, Registrar of Companies, and Official Liquidators. This becomes the reason why the processes are layered since each authority goes through the mergers thoroughly from all possible perspectives before approving.

Policy Linkages and the Road Ahead for Corporate Restructuring
The scope of the expanded FTM route is going to be complemented by the parallel reforms from SEBI and RBI. Both of the regulations are quintessential in a merger process, which collectively creates a pro-business environment for domestic and cross-border transactions. Specifically, the SEBI regulations ensure that the companies using the FTM route are internally accountable, which supports the shift toward self-regulation. So, for example, as per Regulation 17(1)(c) of the (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“LODR”), the largest 2000 listed companies now must have a board of at least six directors, including a balanced mix, meaning the board should consist of executives, non-executives, and independent directors who bring a variety of skills and experiences to the table. Executive directors can effectively manage the day-to-day operations, and the non-executive and independent directors can provide the unbiased and fair decision-making needed to propel the company in the right direction. With at least half of the board made up of non-executive directors, it is also crucial that they can step back from the hands-on management and stimulate more autonomous decision-making.

In accordance with Regulation 17(1A), shareholder consent (special resolution) is required when appointing a non-executive director who is seventy-five years old, plus Regulation 17A prohibits anyone from occupying directorship roles in multiple listed companies beyond the permitted limit of seven or three, as the case may be. This suite of regulations is intended to boost up investor faith in the company’s board and help create boards that are completely transparent and expertly manage their companies through takeovers and other strategic moves.

The recent SEBI amendments focus on Related Party Transactions (“RPT”), which are sometimes the cause for operational delays (because for every RPT, it needed multiple approvals from the audit committee and shareholders before execution). Rather than having to obtain approval for every such transaction, the revised Regulations 23 and 2(1)(zb) of the LODR allow for a more reasonable, scale-based approach. In other words, the smaller, more routine transactions will not require approval, and only the larger, more significant ones will require a vote. This reform is reasonable because it avoids needless delays in the approval process and takes investor interests into account.

Furthermore, to help companies looking to grow internationally, the RBI brought the Foreign Exchange Management (Overseas Investment) Rules, 2022, which replaced the older frameworks Foreign Exchange Management (Transfer or Issue of Any Foreign Security) Regulations 2004 and Foreign Exchange Management (Acquisition and Transfer of Immovable Property Outside India) Regulations, 2015. These earlier regulations outlined the ways Indian companies could invest overseas, acquire foreign businesses, establish subsidiaries or joint ventures, and buy assets outside India’s borders. The updated rules have made it easier to get approvals that used to hold up cross-border mergers and acquisitions. With this change, regulators have made it easier for Indian companies to grow internationally by striking a balance between liberalisation and appropriate oversight.

In the same manner, Regulation 9 of the Foreign Exchange Management (Cross Border Merger) Regulations, 2018, introduced by the RBI, provided the concept of “deemed approval” for mergers between Indian firms and their foreign subsidiaries. Where the conditions prescribed under these regulations are complied with, such transactions shall be deemed to have the approval of the Reserve Bank of India. It makes the process easier by allowing the RBI to clear a transaction right away as long as the specific merger guidelines are followed, removing the need for individual case-by-case approval.

Conclusion
The amendment gives businesses a very friendly but streamlined process by letting them use the FTM mechanism in Section 233. At the same time, it gives regulators and auditors greater authority by making businesses responsible for their actions. The NCLT used to have the power to supervise, but now that power is being transferred to how business works instead of staying an external force.

Besides, the amendment indicates that the frameworks connected with the ease of doing business have become attractive to domestic and foreign investors alike, which corresponds to international best practices. It is obvious that the auditors’ and regulators’ effectiveness in enforcing these provisions will be the factor that determines the success of this amendment. Good administration, coordination among authorities, and clear procedures are also some of the factors that will decide how smoothly the system works. But if the same is followed effectively, it will make it transaction-friendly, boost trust, and transform India’s corporate sector into a competitive and attractive place for investments.