CCI Orders Probe into Asian Paints Over Alleged Abuse of Market Dominance

The Competition Commission of India (CCI) has initiated a formal investigation into Asian Paints, the country’s largest decorative paints manufacturer, for allegedly abusing its dominant market position and engaging in anti-competitive practices.

The probe follows a complaint filed by Grasim Industries, part of the Aditya Birla Group, which recently entered the paints market under the Birla Opus brand. In its 16-page order issued Tuesday, the CCI said it found prima facie evidence suggesting Asian Paints may have violated several provisions of the Competition Act, including unfair trade practices, denial of market access, and coercive dealer conditions.

The commission has directed its investigative arm, the Director General, to submit a report within 90 days. It clarified that this directive does not reflect a final conclusion and Asian Paints has not yet been formally heard on the matter.

Grasim’s complaint accuses Asian Paints of pressuring dealers to avoid stocking Birla Opus products by threatening to reduce credit facilities, incentives, and logistical support. The company also alleged that Asian Paints coerced partners to return tinting machines, blocked access to key suppliers, and used arbitrary benefits such as foreign trips and rebates to gain exclusive dealer loyalty.

Despite being a new entrant, Grasim has rapidly captured a 10% revenue market share and claims to have already become India’s third-largest player in the decorative paints segment. It reported revenues of ₹2,600–2,700 crore in FY25.

In response, Asian Paints said it is reviewing the CCI order and will consider appropriate legal options. “The company remains committed to fully cooperating with the investigation,” it said in a filing.

Asian Paints argued that the Indian paint market is competitive, with numerous players and low entry barriers, noting that Grasim itself has quickly scaled operations and onboarded over 50,000 dealers.

However, the CCI observed that Asian Paints’ control of over 74,000 dealers and a market share exceeding 50% grants it significant dominance. The commission said such dominance, combined with alleged coercive tactics, could distort market competition and limit consumer choice.

(Source: PTI)