CCI orders investigation into market abuse charges against Asian Paints after Birla Paints complaint

By Admin

02 Jul, 2025

In a significant development in the Indian decorative paints industry, the Competition Commission of India (CCI) has ordered an investigation into allegations of market abuse against Asian Paints. The probe was triggered by a formal complaint from Grasim Industries, which operates in the decorative paints segment through its Birla Paints division.

The Allegations

Grasim Industries has alleged that Asian Paints, a dominant player in the Indian decorative paints market, has been indulging in exclusionary practices aimed at blocking Birla Paints’ entry and expansion. According to the complaint, Asian Paints has been allegedly misusing its market position by offering lucrative discounts and foreign travel incentives to dealers on the condition that they refrain from associating with Birla Paints.

CCI's Observations

In its preliminary assessment, the CCI observed that Asian Paints was actively engaging in anti-competitive behavior. The Commission noted that Asian Paints appeared to be placing unfair conditions on its dealers, effectively restraining them from dealing with Birla Paints. In addition to dealer restrictions, CCI found that Asian Paints was allegedly influencing suppliers to withhold essential raw materials from Birla Paints, further undermining its operational capabilities.

Formal Investigation Initiated

After hearing arguments from both Asian Paints and Birla Paints, the CCI concluded that there exists a prima facie case of violation under various provisions of the Competition Act, specifically sections 4(2)(a)(i), 4(2)(c), and 4(2)(d). These provisions pertain to the abuse of dominant market position through unfair trade practices, limiting market access, and imposing unfair conditions.

In light of these observations, the CCI has directed the Director General to conduct a detailed investigation into the matter. The report is expected to be submitted within 90 days. However, the Commission clarified that the current findings are only preliminary and should not influence the investigative process.

Industry Impact

The investigation marks a crucial moment in the competitive landscape of India’s decorative paints sector, especially as new players like Birla Paints attempt to enter a market long dominated by established brands. The outcome of this probe could set an important precedent in addressing market monopolies and ensuring a level playing field for all competitors.