By Pradeep S. Mehta
Summary
Well-contested markets deliver efficiency, innovation, consumer gains and faster GDP growth. While India envisions developed economy status by 2047, a key enabler is missing. For a big-bang reform, the government should dust off its 2011 draft competition policy and relieve markets of distortions.
India’s economy is at an inflection point. On one hand, we aspire to become a $5 trillion economy soon and project a bold vision of a Viksit Bharat by 2047.
On the other, our economic reality tells a humbling story—just as we did not achieve the $5 trillion mark in 2025, as originally envisaged, the vision of ‘developed’ status by 2047 will not be realized if our GDP grows at its current rate.
India is shying away from a key reform that can address distortions holding the economy back: a national competition policy (NCP). If implemented, it would be our second wave of big-bang economic reforms after 1991.
While the discourse around competition in India has become synonymous with antitrust enforcement and merger approvals, competition policy is a much broader, economy-wide discipline. Put simply, it is about shaping the rules of the game—not after the horses have bolted from their stables, but before distortions take hold.
Many policymakers argue that India already has a strong Competition Act and an active Competition Commission of India (CCI), so why add another layer? This reflects a basic misunderstanding. When the CCI was established in the 2000s, some people thought it was another market entry testing mechanism; such was the public ignorance.
It took time for them to understand that competition law is reactive. It intervenes after a company (private or public sector) indulges in anti-competitive behaviour—by abusing its market dominance, forming a cartel with others or trying to acquire such clout through a merger.
Competition policy, however, is preventive and also curative. It ensures that every regulation, government scheme, licensing requirement, procurement policy or sectoral reform is screened for its impact on competition and does not unnecessarily distort any market.
Although an NCP was drafted in 2011, it has been languishing on the ministry of corporate affairs’ website for over a decade, despite Niti Aayog’s recommendation of comprehensive competition-policy reform. But Niti Aayog’s management has changed since then and the fate of that initiative remains unclear.
As recently as August 2025, the 25th Parliamentary Standing Committee on Finance flagged this inaction, stressing that an NCP is long overdue to attain coherence, coordination and real competitive discipline across sectors.
Meanwhile, countries across the world have adopted competition policies. Australia’s NCP reforms, for example, not only opened its markets but generated an estimated 2.5% increase in GDP.
A well-designed NCP can change how India’s markets work because it would build competition principles into everyday policymaking, instead of treating them as an afterthought.
With this framework in place, the government would be required to examine every regulation or scheme through a competition lens, which would help spot and remove unnecessary entry barriers and distortions. This alone can make space for more firms, especially newer and smaller ones, to invest, innovate and compete fairly in better contested markets.
An NCP will also push ministries and regulators to transparently justify any preferential treatment given to incumbents or state-owned enterprises.
By promoting proportionate, risk-based regulation instead of blanket rules, the policy would ease compliance pressures on small businesses while holding large players accountable where needed. An NCP would also make governance more coherent and thus better.
The broad goal of such a policy is to institutionalize the principle of competitive neutrality, ensuring that similarly-situated entities are treated on an equal footing, whether they are state-owned, privately held, domestic or foreign.
Upholding this principle of economic democracy is critical for any economy that aims to foster fair rivalry for the sake of efficiency, growth and innovation.
Consumers also benefit directly through better prices, more choice and improved services, while the economy benefits from early detection of market distortions before they can turn into long-term drags on growth. In short, an NCP doesn’t just tidy up regulations, it strengthens the entire economic environment.
Enthusiasm for an NCP, unfortunately, has been weak in India. The Competition Act’s existence has been cited at least on one occasion to justify not having a policy dedicated to competition, though the Act also recommends adoption of an NCP.
The Centre’s approach seems incoherent. We have various laws for intellectual property rights (IPR), for example, and also a national IPR policy. Likewise, we have various environmental protection laws apart from an environment protection policy.
A formally laid-down policy gives the relevant laws more teeth. Since we have put frameworks in place for those two, why not do the same for competition? It would aid investment, innovation, efficiency, consumer welfare and economic growth.
Competition policy is not a bureaucratic exercise but an economic necessity. Fortunately, two significant reforms (among many) took place over the past decade or so: the GST rollout to create a single market and the enactment of the Insolvency and Bankruptcy Code to enable the swift exit of sick units.
The government must revive the draft NCP of 2011. India cannot achieve developed status through slogans. We need competitive, efficient and innovation-led markets.
The author is secretary general of CUTS International. Vidhi Maharishi of CUTS contributed to this article.
This article can also be viewed at:
https://www.livemint.com/