AMID the unprecedented focus of energy in not less than seven core sectors in company India, from pharma and telecom to airports and ports, the Competition Commission of India has launched a set of detailed investigations in the marketplace dynamics of every sector.
Simultaneously, it has began a overview of all mannequin concession agreements — the authorized contract that varieties the premise of the public-private partnership — throughout 4 key infrastructure sectors: airports, ports, electrical energy and railways.
The objective is to make sure that competitors stays “vibrant” and “there are enough players who are able to participate in the award of concessions,” CCI Chairperson Ashok Kumar Gupta informed The Indian Express.
“The policy of the government is to make the economy more efficient, and, in that process, what the CCI can do is look at whether the dominance is abused or not. If there is abuse of dominance, CCI can take action under Section 4 of the Competition Act,” Gupta stated.
Section 4 bars an enterprise from abusing its dominance and defines abuse by way of a variety of steps that embody denial of entry, predatory pricing, limiting items or providers in a specific market.
In sectors comparable to airports, ports and highways, and electrical energy, focus of energy by itself was not a priority, the regulator stated.
“In this context, we are reviewing some of the Model Concession Agreements in these sectors — those with natural monopolies. What is important is that the tender design for award of Concessions ensures that competition for the market is vibrant — that there are enough players who are able to participate,” Gupta stated.
Indeed, as a part of the sectoral research, an interim report on the telecom sector by the Indian Council for Research on International Economic Relations (ICRIER) submitted to the CCI is at present being “looked at”, an official stated. The launch of Reliance Jio in September 2016 triggered a contemporary wave of consolidation within the telecom sector. This resulted within the business shrinking to simply three gamers from near a dozen a decade in the past and Jio rising as the most important participant in lower than 5 years.
The CCI chief stated that given the adoption of latest know-how, the regulator would apprise the Department of Telecommunications of the areas that might pose an issue from the competitors perspective sooner or later.
An earlier examine by the regulator had highlighted new competitors dimensions together with information assortment, spectrum acquisition, unbundling of infrastructure and repair, visitors administration and the mixing between telecom operators on one facet and e-com platforms, OTT (Over The Top) gamers, and resolution suppliers on the opposite.
Given the variety of M&A offers within the digital sector, the CCI’s new examine is anticipated to provide you with doable standards to seize transactions for scrutiny. “Dependence of consumers and enterprises on a few large digital platforms raises many novel questions for regulation and regulators,” Gupta stated.
While consolidation is a theme that has picked up sharply during the last 5 years, this pattern has performed out since liberalisation with an ever-expanding checklist of sectors the place the highest one or two corporations account for 80 per cent or extra of the income generated.
In paints (Asian Paints, Berger Paints); premium cooking oil (Marico, Adani); biscuits (Britannia, Parle); hair oil (Marico, Bajaj Corp); toddler milk powder (Nestle); cigarettes (ITC); adhesives (Pidilite), waterproofing (Pidilite); vehicles (Tata Motors, Ashok Leyland); small automobiles (Maruti, Hyundai) – one or two corporations account for 80 per cent of the income generated within the sector, in accordance with Mumbai-based funding advisory agency Marcellus.
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