Corporate and Economic Laws · The Competition Act, 2002

Extra-Territorial Jurisdiction under Section 32 of the Competition Act

Updated 11 October 2026 · Fact-checked

Section 32 lets the Competition Commission of India inquire into an agreement, abuse of dominance or combination even if it happened outside India or a party is abroad, provided it has, or is likely to have, an appreciable adverse effect on competition in the relevant market in India. The test is effect in India, not location.

Understand Extra-Territorial Jurisdiction (Section 32)

Business today crosses borders. A cartel can be formed in Singapore, a dominant firm can sit in the US, and a merger can close in Europe. Each can still raise prices or shut out rivals in India. If the Competition Act stopped at the border, such conduct would escape.

Section 32 solves this. It says the Commission has power to inquire notwithstanding that: the agreement was entered into outside India; any party to the agreement is outside India; the enterprise abusing dominance is outside India; the combination took place outside India; any party to the combination is outside India; or any other matter, practice or action arising out of these is outside India.

The key condition is the effects test. The Commission can inquire only if the agreement, dominant position or combination has, or is likely to have, an appreciable adverse effect on competition in the relevant market in India. Foreign location is no shield. But a foreign act with no real effect in India is outside this power.

The power is not free-standing. The Commission inquires in accordance with sections 19, 20, 26, 29, 29A and 30, and may pass such orders as it deems fit under the Act. Section 29A was added to this list by the 2023 amendment (effective 10-9-2024). So the usual procedure applies: for agreements and abuse, section 19 and 26 (information and reference to the Director General); for combinations, sections 20, 29, 29A and 30.

Remember the three subjects: agreements (section 3), abuse of dominant position, and combinations. Section 32 is the bridge that carries each of them across the border.

Key rules to remember

Core rule of section 32: Act outside India + appreciable adverse effect (actual or likely) on competition in the relevant market in India = CCI has power to inquire; Location of the act or party is irrelevant. Effect in India is the test.
Situations covered (clauses a to f): Agreement entered outside India | party outside India | abusing enterprise outside India | combination outside India | party to combination outside India | any other matter, practice or action outside India; Clauses (a)-(b) agreements, (c) abuse, (d)-(e) combinations, (f) related matters.
Procedure sections applied: Inquiry in accordance with sections 19, 20, 26, 29, 29A and 30; Section 29A was added by Act 9 of 2023, w.e.f. 10-9-2024. Then the Commission may pass such orders as it deems fit.
Effects standard: "has, or is likely to have" appreciable adverse effect on competition in the relevant market in India; Actual harm is not needed. Likely harm is enough.

How to solve Extra-Territorial Jurisdiction (Section 32) questions

For a case question on a foreign deal or conduct, apply the effects test in a fixed order and then state the Commission's power.

1Identify what the foreign conduct is: an agreement (section 3), abuse of dominant position, or a combination.
2Note what is outside India: where it was entered into, where a party is located, or where the abuse occurred. Match this to clauses (a) to (f) of section 32.
3State that location does not stop jurisdiction: the Commission has power notwithstanding the foreign element.
4Apply the effects test: does it have, or is it likely to have, an appreciable adverse effect on competition in the relevant market in India? Use facts such as Indian sales, Indian customers, Indian subsidiaries and market share in India.
5If there is no such effect in India, conclude the Commission cannot use section 32.
6If there is effect, state the procedure: inquiry per sections 19, 20, 26, 29, 29A and 30, as relevant, and orders as it deems fit.
7Give a clear conclusion in one line.

Quickest way: Effect-in-India check

When to use it: Use for MCQs and short case scenarios on foreign mergers, cartels or dominant firms.

Ignore where the deal was signed or where the party sits.
Ask one question: is there appreciable adverse effect, actual or likely, in India's relevant market?
Yes means CCI can inquire. No means section 32 does not apply.
Check that the answer option matches the exact wording of the section.

Common mistakes in Extra-Territorial Jurisdiction (Section 32)

Saying the CCI has no power because the agreement was signed abroad.
Students assume Indian law applies only within India.
Fix: Quote section 32: power exists notwithstanding that the agreement was entered into outside India or a party is abroad.
Saying the CCI can inquire into any foreign act.
Overstating the width of the section.
Fix: Always add the condition: appreciable adverse effect on competition in the relevant market in India.
Requiring proof of actual harm already caused.
Ignoring the words 'is likely to have'.
Fix: Write 'has, or is likely to have'. Likely effect is enough.
Treating section 32 as covering only combinations.
Foreign mergers are the common example.
Fix: It covers agreements, abuse of dominant position and combinations, and related matters outside India.
Forgetting that section 32 works through the normal procedure.
Students think it gives a separate inquiry route.
Fix: Say the inquiry is in accordance with sections 19, 20, 26, 29, 29A and 30, with orders as the Commission deems fit.

Worked examples

Example 1

Two foreign manufacturers, with no office in India, agree outside India to fix the price of a component. They sell the component to Indian car makers, and Indian prices rise sharply. Can the CCI inquire? Explain.

Show the solution

The conduct is an agreement of the kind referred to in section 3, entered into outside India with parties outside India. Clauses (a) and (b) of section 32 apply.
The foreign location does not bar the Commission. Section 32 gives power notwithstanding these facts.
Apply the effects test: sales to Indian car makers and higher Indian prices show an appreciable adverse effect on competition in the relevant market in India.
The inquiry follows the provisions of sections 19, 26 and the other sections named in section 32.

Answer: Yes. The CCI has power to inquire because the price-fixing agreement has an appreciable adverse effect on competition in the relevant market in India, even though it was made abroad by foreign parties.

Example 2

A US company acquires another US company in the US. Both have large Indian sales. Before closing, the CCI doubts the deal. Can the CCI act under section 32? State the condition and the process.

Show the solution

The combination has taken place or will take place outside India, and parties are outside India: clauses (d) and (e) apply.
Section 32 allows inquiry despite this, if the combination has or is likely to have an appreciable adverse effect on competition in the relevant market in India.
Large Indian sales of both firms make an Indian effect plausible, but this must be established on the facts.
The inquiry follows sections 20, 29, 29A and 30. Under section 29A, if the Commission thinks there is an appreciable adverse effect, it issues a statement of objections, and the parties have twenty-five days from receipt to explain why the combination should be allowed.
The Commission may also pass orders it deems fit under the Act, for example under section 31 where it directs that the combination shall not take effect.

Answer: Yes, the CCI can act under section 32, but only if the combination has or is likely to have an appreciable adverse effect on competition in the relevant market in India. It then follows the combination procedure and may pass orders under the Act.

Exam tips

Write the effects test in every answer. It is the one point examiners look for.
Use the exact phrase 'has, or is likely to have' and 'relevant market in India'.
For case scenarios, pick out the Indian link: Indian sales, customers or subsidiaries.
Mention that the procedure runs through sections 19, 20, 26, 29, 29A and 30, noting that 29A came in by the 2023 amendment.
In MCQs, reject options that make the power unconditional or limit it to mergers.

Practice questions from The Competition Act, 2002

Extra-Territorial Jurisdiction (Section 32): frequently asked questions

What does section 32 of the Competition Act say?

It gives the CCI power to inquire into agreements, abuse of dominant position and combinations even when they occur outside India or involve parties outside India. This applies if they have, or are likely to have, an appreciable adverse effect on competition in the relevant market in India.

What is the effects doctrine?

It means jurisdiction depends on the effect of conduct in India, not where the conduct took place or where the parties are based. Section 32 applies this idea through its requirement of effect on competition in the relevant market in India.

Does the CCI need actual harm to use section 32?

No. The section covers conduct that has, or is likely to have, an appreciable adverse effect. Likely harm is enough, but the effect must be appreciable and in India.

Which procedure does the CCI follow in an extra-territorial case?

It inquires in accordance with sections 19, 20, 26, 29, 29A and 30 and may pass orders it deems fit under the Act. Section 29A was added by the 2023 amendment, in force from 10-9-2024.