India’s largest paint manufacturer, Asian Paints, is under the scanner after the Competition Commission of India (CCI) initiated an investigation into allegations of anti-competitive practices. The complaint, filed by Birla Opus, accuses Asian Paints of abusing its dominant position to restrict competition in the fast-growing paints market.
The complaint
Birla Opus, which entered the paints sector in 2023 under the Aditya Birla Group, claims that Asian Paints has engaged in practices that limit dealer freedom. The allegations include exclusive supply agreements, preferential pricing, and restrictive dealer incentive schemes. According to Birla, these tactics have made it difficult for new entrants to establish a foothold in India’s highly competitive paints market.
CCI’s response
Taking cognizance of the complaint, the CCI has ordered a detailed probe to examine whether Asian Paints’ conduct violates the provisions of India’s competition law. While the commission has not yet passed judgment, the investigation is expected to be closely monitored by industry stakeholders, given Asian Paints’ market share of over 50%.
Industry dynamics
The timing of the probe is critical. The Indian paints sector is witnessing unprecedented competition, with JSW Paints acquiring Akzo Nobel India earlier this year and Birla Opus aggressively expanding its product line and distribution network. Industry experts suggest that if the CCI finds evidence of wrongdoing, it could result in penalties, restrictions, and new regulatory frameworks to ensure fair play.
Impact on dealers and consumers
Dealers are at the heart of India’s paints ecosystem, often enjoying long-standing relationships with manufacturers. If the allegations hold true, the case could lead to greater freedom for dealers to stock multiple brands, thereby increasing consumer choice and possibly improving pricing competition.
Asian Paints’ stance
The company has denied wrongdoing, stating that its business practices comply with all regulatory norms and that its dealer agreements are built on mutual trust and market-driven factors. “We remain confident that our practices are in line with the law and have always worked in the best interests of consumers and partners,” Asian Paints said in a statement.
What lies ahead
The CCI’s probe could take months, but the very initiation of an investigation is seen as a major development in India’s paints sector. Analysts believe the case could reshape competitive practices, leveling the playing field for newer entrants like Birla Opus and JSW.
If proven, the outcome may not only affect Asian Paints’ dominance but also set a precedent for fair competition in India’s wider FMCG and building materials sectors. For now, the industry is watching closely, as the outcome could redefine how paints are marketed and sold across the country.