Negotiate a 75% indemnity cap in an Indian deal and you may still only be able to recover 25% of it. In this episode of the Veyrah Law series, Ajay Joseph (Partner) explains why India’s exchange control framework, not the transaction document, sets the real limits on cross-border M&A indemnities. Indian deals typically build an elaborate indemnity architecture: unlimited exposure on fundamental warranties such as title and authority to transact, caps of 25% to 75% of deal value on general warranties, and a further layer of de minimis thresholds, baskets and survival periods borrowed largely from international practice.
