In a significant development set to reshape India’s competitive landscape, the Competition Commission of India (CCI) has initiated a detailed investigation into paint giant Asian Paints Ltd. The probe, ordered on Tuesday, July 1, 2025, stems from a formal complaint filed by Grasim Industries Ltd.’s Birla Opus Paints, alleging that Asian Paints is abusing its dominant position in the country’s thriving decorative paints market.
This move by the antitrust regulator comes after a preliminary review by the CCI found a “prima facie” case of contravention of the provisions of Section 4(2) of the Competition Act, 2002. Specifically, the allegations against Asian Paints include imposing unfair conditions on dealers, restricting their ability to sell competing products, and creating barriers for new entrants in the industry.
Key Allegations and Market Impact
Grasim Industries, which recently entered the Indian paints market with its brand Birla Opus in February 2024, has accused Asian Paints of several anti-competitive practices. These include:
- Exclusive Dealerships and Incentives: Allegations suggest Asian Paints offered additional discounts and incentives, such as foreign travel, to dealers in exchange for sales exclusivity, thereby stifling competition from new players like Birla Opus.
- Restricting Supplier and Logistics Access: The complaint further claims that Asian Paints is restraining suppliers of essential raw materials and coercing landlords, Clearing and Forwarding (C&F) agents, and transporters from engaging with its competitors, effectively creating input foreclosure and hindering logistics for new entrants.
- Pressure Tactics on Dealers: Dealers dealing with rival products, particularly Birla Opus, reportedly faced reduced credit limits, increased sales targets, diminished service levels, and even the opening of competing dealerships nearby.
The CCI’s preliminary assessment indicates that these practices could lead to an appreciable adverse effect on competition in India by imposing unfair conditions and partially foreclosing the market. Asian Paints currently holds a significant share, reportedly over 50%, of India’s approximately ₹80,000-₹90,000 crore paint market, with a vast distribution network of over 74,000 dealers.
The CCI has directed its Director General (DG) to conduct a comprehensive investigation into the matter and submit a report within a strict timeline of 90 days. While the current order is based on a “prima facie” view and does not represent a final opinion on the merits of the case, it underscores the seriousness with which the regulator views the allegations. Asian Paints, in its official statement, has acknowledged the order, stating that it is reviewing it and will take appropriate legal recourse while committing to full cooperation with the CCI’s investigation.
This investigation carries significant implications for the highly competitive Indian paint industry. With new entrants like Birla Opus rapidly gaining market share (reportedly near 7% by March 2025 according to Elara Capital data), the CCI’s intervention aims to ensure fair competition and prevent any single player from leveraging dominant position to the detriment of market health and consumer choice. The outcome of this probe could set a precedent for market conduct in other sectors as well.
Key Highlights:
- The Competition Commission of India (CCI) has ordered a full investigation into Asian Paints over alleged abuse of its dominant position in the decorative paints market.
- The probe was initiated based on a complaint by Grasim Industries’ Birla Opus Paints, accusing Asian Paints of anti-competitive practices including exclusive dealer incentives, restriction of supplier access, and pressuring dealers.
- The CCI’s preliminary review found a “prima facie” case, indicating potential violations of Section 4(2) of the Competition Act, 2002, which prohibits abuse of dominant position.
- A Director General has been appointed to submit an investigation report within 90 days, with Asian Paints pledging cooperation while reviewing legal options.