Policy adoption


On 13 January 2003, the Competition Act 2002 (the Act) superseded the Monopolies and Restrictive Practices Act 1969 (the MRTP Act),(1) but became operational only from 20 May 2009(2) due to a series of constitutional challenges that were brought first before the High Court of Madras and later before the Supreme Court.(3) Following the Supreme Court's disposal of the writ petition on 20 January 2005, substantial government-recommended amendments to the Act were considered and approved by both houses of Parliament.(4)

The MRTP Act was enacted in 1969 and its substantive provisions continued to be implemented until September 2009 due to constitutional challenges that remained sub judice until January 2005 and resultant amendments of the Act that were under Parliament's consideration. Despite several Supreme Court decisions,(5) the jurisprudence that evolved under the old law was not effective. For example, the office of the director general of investigation and registration (the DGIR) operated as, among other things, the investigating wing of the Monopolies and Restrictive Practices Commission (MRTPC) and enjoyed significant power under the MRTP Act. Section 11(2) of the MRTP Act in particular empowered the DGIR to initiate and conclude preliminary investigations independently, without the MRTPC's involvement. Although the enactment of this provision may have had good intentions, industries felt that such concurrent power was often overused or used unreasonably at times.

Section 37 of the MRTP Act empowered the MRTPC to inquire into prohibited trade practices and, if it concluded that such practices were prejudicial to public interest, pass a cease-and-desist order or require that the agreement associated with such practices be modified or made void. However, the MRTPC's orders were necessarily subject to certain gateways provided for in section 38 of the MRTP Act. These gateways, which were numerous and wide in scope, imposed a heavy obligation upon the MRTPC to consider several aspects before passing a simple cease-and-desist order. This burden, combined with a lack of power to impose pecuniary penalties on infringing entities for prohibited trade practices, rendered the MRTPC ineffective and subject to scrutiny by the Supreme Court through one-stage appeals. In fact, the Supreme Court has, on several occasions, overturned MRTPC orders on the grounds that the MRTPC has insufficiently considered the section 38 gateways.(6)

In addition, there were no international best-practice provisions in the MRTP Act; therefore, it failed to provide for:

  • unannounced searches and seizures (ie, dawn raids);
  • regulation of merger control;
  • leniency regime benefits;
  • competition advocacy;
  • international cooperation among competition agencies; or
  • an effects doctrine.

Policy adoption

The government deliberated upon such omissions, especially after the adoption of economic liberalisation in July 1991, and decided to set up a high-powered committee to assess the market realities in the new economic scenario and suggest a way forward. SV Raghavan was appointed as the chairman of this committee (the Raghavan Committee), which was formed of a few experts in economics and law. The Raghavan Committee had early issues as regards whether a new legislation was required to meet the newer challenges of free trade in a liberalised economy or whether a comprehensive amendment of the MRTP Act would be sufficient. An extract the committee's report shows this predicament:

The question that is very often asked is that whether we need a new Competition Law at all. The present Monopolies and Restrictive Trade Practices Act, 1969 (MRTP Act) and Consumer Protection Act, 1986 (CPA) should be sufficient to deal with anti-competitive practices. So, the argument goes. The present MRTP Act is limited in its sweep and hence fails to fulfil the need of a competition law in an age of growing liberalisation and globalisation. It should not be forgotten that by April 2001, all quantitative restrictions (QRs) would have been completely phased out and with low level tariffs already negotiated during WTO rounds, India will be facing severe competition from abroad. Practically, the entire range of consumer goods will bear the brunt of open imports, combined with a lowering of tariff walls in the coming years. Lots of other sectors too will have to be shaped up to face competition. From toy-makers, plastic processors and urea manufacturers to giants of industry like automobile makers, steel producers and textile mills, all will have to face competition from the world over.

In addition, a few other issues drew the Raghavan Committee's attention:

Finally, with the promulgation of a new competition policy and the proposal of a new competition law, it is necessary to consider the relevance of the existing institutions like MRTP Commission and BIFR in the revised context or whether they are a superfluity to be traded in for a competition law. Along the path to a competitive system, there are several traps that need to be avoided such as the facile substitution of laws on competition for genuine competition. In the absence of a proper competitive environment, we may find ourselves with a first class competition law but no competition. We may also end up by protecting the competitor and not the competitive system. Hence, the Committee decided that it must at the outset record the need for a Competition Policy and the necessary prerequisites to create a competitive environment before spelling out the competition policy and law.

The Raghavan Committee recommended, among other things, to repeal the MRTP Act and dissolve the MRTPC, and replace them with a modernised competition act and the Competition Commission of India (CCI), respectively. The Competition Act was proposed to include all the features of modern competition law – namely:

  • the prohibition of anti-competitive horizontal and vertical business agreements;
  • the prohibition of abuse of dominance;
  • the regulation of combinations (merger control);
  • an independent investigating mechanism for assisting the CCI in investigation of disputes;
  • competition advocacy;
  • international cooperation and application of effects doctrine;
  • an appeals procedure; and
  • the exclusive jurisdiction of the CCI and the first appellate tribunal.

The separation of adjudicatory and investigation functions was a crucial change that the Raghavan Committee recommended. Accordingly, while the CCI would be the adjudicatory authority, the director general (DG) would be responsible for investigations. The Raghavan Committee notably stated that the DG would not have suo motu investigation powers and would only investigate complaints received from the CCI. The preparation of a manual on the nature, scope and manner of the DG's investigations was also suggested.


The CCI began its enforcement mandate on 20 May 2009 and its regulatory mandate on 1 June 2011. So far, the CCI's work has been appreciated by stakeholders, although there is scope for further improvement. Markets are dynamic and this is reflected in the principles of the Act; therefore, the development of the CCI will continue to be considered a "work in progress". In its first decade, numerous CCI decisions have reached the Supreme Court, which clearly indicates an improvement from the previous regime.(7)

In terms of merger control, the CCI has been particularly successful. Out of approximately 900 merger control transactions, approximately 98% of these have been approved unconditionally; the remaining 2% have been modified, but none have been blocked. Several "dawn raids" have been conducted by the DG under the CCI's directions, which have exposed cartels and bid-rigging by infringing enterprises. Moreover, there has been an increase in cartel members filing leniency applications, which was unheard of during the previous regime.

The CCI is an active member of, and in a leadership position in, some of the working groups of the International Competition Network (ICN) and the Brazil, Russia, India, China and South Africa (BRICS) competition law group. Further, the CCI's non-governmental advisors (NGAs), who are mostly private lawyers with CCI approval, are permitted to participate regularly in ICN and BRICS events. The CCI has entered into several international cooperation agreements, which include:

  • the Australian Competition and Consumer Commission;
  • BRICS;
  • Canada's Competition Bureau;
  • the European Union;
  • the Japan Fair Trade Commission;
  • Russia's Federal Antimonopoly Service; and
  • the United States' Department of Justice and Federal Trade Commission.

Such agreements have substantially changed the paradigm for the evolution of India's competition regime. Even during the covid-19 pandemic, the CCI has explored the possibility of virtual hearings for antitrust matters, including merger control transactions, which have been successful. As part of competition advocacy, a rise in important market studies has also been significant. There is much evidence for the clear improvement of competition regulation since the CCI replaced the MRTPC.

For further information on this topic please contact Manas Kumar Chaudhuri or Armaan Gupta at Khaitan & Co by telephone (+91 120 479 1000) or email ([email protected] or [email protected]). The Khaitan & Co website can be accessed at


(1) Assent of the president of India obtained on 13 January 2003.

(2) Sections 3 and 4 of the Act were notified.

(3) Writ Petition 490 of 2003 Brahm Dutt v Union of India.

(4) 25 September 2007 – the original Act stood amended.

(5) Tata Engineering & Locomotive Co Ltd, Bombay v The Registrar of the Restrictive Trade Agreement, New Delhi (AIR 1977 SC 973) and Mahindra and Mahindra Ltd v Union of India and Anr (1979 2 SCC 529).

(6) Voltas Ltd Bombay v Union of India and Others (AIR 1995 SC 1881).

(7) Excel Crop Care Limited v Competition Commission of India (AIR 2017 SC 2734), Competition Commission of India v Co-ordination Committee of Artists and Technicians of WB Film and Television and Ors (AIR 2017 SC 1449) and Rajasthan Cylinders and Containers Ltd v Union of India (Civil Appeal 3546 of 2014 and other connected appeals).