The New Competition Regime in India: Prospects and Challenges: Introduction

Abstract

India is one of the major developing countries having a long history of competition regulation. The scope for the market competition was very limited under the highly rigid regulatory system that existed in India in the early years of development. The key principle behind the planned industrial development strategy in India was self-reliance and social justice for which the government followed a “control and command” regime in which the public sector was assigned a crucial role. Private investment in crucial sectors, entry, and expansion of the private sector was restricted through various regulations. Foreign investment, import of technology, and trade policy were also regulated. MRTP Act 1969 was dealing with the competition issues in India under this highly regulated scenario. With the paradigm shift in India’s economic policies since the announcement of New Industrial Policy-1991, the country moved to the “market-oriented” scenario, and thereby the role of competition also increased in various economic activities, which necessitated a drastic revision in the then existing competition regulations too, which finally resulted in the adoption of the Competition Act 2002. The enforcement of the new Act started from May 2009 onward for the first two provisions of the Act, namely, (i) anticompetitive agreements and (ii) abuse of dominance. The third component, that is, combination regulations became effective from June 2011. It is to be noted that the provisions relating to the concentration of economic power under the MRTP Act 1969, which also governed mergers and acquisitions (M&As), were deleted following the onset of the new policy regime in 1991. Thus, for two decades, that is, till 2011, when the provisions relating to combinations under the Competition Act 2002 came into force, there were no effective restrictions on M&As. During the last ten years of operation of the new regulator in India, that is, the Competition Commission of India (hereinafter “Commission”) has been focusing on internal capacity building, networking with competition regulators from other countries, and advocacy initiatives within India along with speedy processing of cases. So far, the Commission has received more than 740