The Raghavan Committee Report: Shaping India’s Competition Law

When India opened up its economy in 1991, the rules of the game changed overnight. Private investment surged, foreign players entered the market, and industries that were once shielded by state control suddenly had to compete. But the law meant to govern market conduct – the Monopolies and Restrictive Trade Practices (MRTP) Act, 1969 – was still operating on the logic of a controlled economy. It was designed to curb the concentration of wealth, not to foster healthy competition. By the late 1990s, this mismatch had become impossible to ignore. The Raghavan Committee was the government’s answer to that problem, and what it recommended would fundamentally reshape competition law in India.

Why the MRTP Act was no longer enough 🔗

The MRTP Act had served a particular purpose in its time – it was built around the idea of preventing monopolies in a heavily regulated, licence-driven economy. But as legal analysts have noted, the Act had critical structural limitations that made it ill-suited for a liberalised market. It did not apply uniformly to all sectors – public sector enterprises, government undertakings, banks, and insurance companies were largely exempt. This meant large state-backed entities could behave in anti-competitive ways without any regulatory consequences.

Beyond the exemptions, the MRTP framework focused on monopoly control rather than competition promotion – a fundamental conceptual difference. It also lacked provisions for modern anti-competitive conduct such as cartels, abuse of dominance, or merger review aligned with international standards. There were no provisions for unannounced searches and seizures, and the MRTP Commission had limited powers to impose meaningful penalties. In short, the law was built for a different era.

Formation of the Raghavan Committee 🔗

In October 1999, the Government of India constituted the High-Level Committee on Competition Policy and Law, chaired by S.V.S. Raghavan, a retired senior central government officer. The committee comprised experts in economics and law, and its mandate was clear: assess whether India needed an entirely new competition law or whether amending the MRTP Act would suffice, and recommend the way forward.

The committee engaged with stakeholders, studied global competition regimes, and examined how India’s economic realities had shifted since liberalisation. Its report was submitted in May 2000. The conclusion was unambiguous – piecemeal amendments to the MRTP Act would not work. India needed a new, comprehensive competition law.

Key recommendations of the Raghavan Committee 🔗

The report contained several far-reaching recommendations that became the blueprint for the Competition Act, 2002. Each recommendation addressed a specific gap in the existing framework.

Replacing the MRTP Act with new legislation 🔗

The committee’s primary recommendation was to repeal the MRTP Act entirely and replace it with a modern competition law. As the Competition Law Review Committee’s 2019 report confirms, the Raghavan Committee called for large-scale reforms to align Indian antitrust law with both domestic economic realities and global best practices. The new law was to focus not on limiting the size of companies but on regulating their conduct – specifically, conduct that harms competition.

Prohibition of anti-competitive agreements 🔗

The committee proposed a structured framework for dealing with anti-competitive agreements. It drew a clear distinction between two categories. Horizontal agreements – those between competitors at the same level of the supply chain, such as price-fixing or market-sharing cartels – were to be treated as per se violations, meaning they would be presumed harmful without needing to prove their actual effect on the market. Vertical agreements – those between firms at different levels, such as a manufacturer and a distributor – were to be evaluated under the rule of reason, examining their actual competitive impact before concluding they were harmful.

Addressing abuse of dominant position 🔗

Rather than targeting market size alone, the committee recommended that the new law penalise the abuse of a dominant position. This was a significant conceptual shift – a company could be large without breaking the law; it would only face scrutiny if it used its dominance to harm competition, such as by predatory pricing, denying market access, or imposing unfair conditions on trading partners. As analyses of the report highlight, this approach reflected a mature understanding of how market power actually operates.

Merger regulation 🔗

The MRTP Act had no robust mechanism for reviewing mergers and acquisitions before they were completed. The Raghavan Committee recommended introducing a pre-merger notification system – where combinations beyond a certain size threshold would require prior approval from the regulatory authority. This would allow the regulator to assess whether a proposed merger was likely to create or strengthen a dominant position that could harm competition, and either approve it, impose conditions, or block it entirely.

Uniform application across all enterprises 🔗

One of the committee’s most significant stances was recommending that the new competition law apply uniformly to all enterprises – including those owned or controlled by the government. This departed sharply from the MRTP Act’s approach of granting blanket exemptions to state-owned entities. The committee’s view was that market distortions can arise from any player regardless of ownership, and that no enterprise should escape scrutiny simply because the government holds a stake in it.

Establishment of the Competition Commission of India 🔗

Perhaps the most consequential institutional recommendation in the report was the creation of an entirely new regulatory body – the Competition Commission of India (CCI) – to replace the MRTP Commission. The committee envisioned the CCI as an independent, expert body with both regulatory and quasi-judicial functions.

The committee also recommended a structural separation between investigation and adjudication. Under this design, a Director General (DG) would serve as the investigative arm, responsible for probing anti-competitive conduct, while the CCI itself would adjudicate and pass orders. This separation was meant to ensure procedural fairness and prevent the same body from both investigating and deciding a case.

The CCI, as envisioned by the committee and later established under Section 7 of the Competition Act, was vested with wide-ranging powers: the authority to investigate anti-competitive agreements and abuse of dominance, impose penalties of up to 10% of average turnover, review combinations, issue cease-and-desist orders, and engage in competition advocacy – including advising the government and promoting a culture of competition awareness across sectors.

From report to law: the legislative journey 🔗

Following the submission of the Raghavan Committee Report, the government introduced the Competition Bill in Parliament in 2001. After deliberations and modifications – including a reference to the Parliamentary Standing Committee – it was enacted as the Competition Act, 2002, receiving presidential assent on 13 January 2003.

Implementation, however, was not immediate. The Act faced constitutional challenges, particularly regarding the composition and powers of the CCI, which were litigated before the Madras High Court and later the Supreme Court. The Supreme Court disposed of the writ petition in January 2005, after which Parliament approved government-recommended amendments in 2007 and 2009. As a result, provisions relating to anti-competitive agreements and abuse of dominance came into force only in May 2009, and merger control provisions became effective in 2011.

Despite the delayed rollout, the Competition Commission of India has since emerged as one of India’s most consequential regulatory bodies, exercising jurisdiction across virtually every sector of the economy – from telecom and pharmaceuticals to digital markets and infrastructure.

The paradigm shift: from controlling monopolies to promoting competition 🔗

The most enduring contribution of the Raghavan Committee Report is the philosophical reorientation it initiated. The MRTP regime was built on suspicion of size – large companies were presumed dangerous and subject to prior approval for expansion. The competition law framework the committee proposed flipped this logic entirely. Size alone is not the problem; harmful conduct is.

This shift – from monopoly control to competition promotion – is not merely semantic. It reflects a fundamentally different theory of how markets work and how regulation should intervene. In a liberalised economy integrated with global supply chains, the goal of law is not to keep firms small but to ensure that markets remain contestable, consumers have genuine choices, and no firm can entrench its dominance by undermining rivals through anti-competitive means.

The Competition Act, 2002 has since been further refined through the Competition Law Review Committee’s recommendations in 2019 and the Competition (Amendment) Act, 2023, which introduced deal value thresholds for digital markets, a green channel for automatic merger approvals, and a settlement and commitment mechanism. These developments are direct extensions of the framework the Raghavan Committee conceived over two decades ago.

Legacy and continuing relevance 🔗

The Raghavan Committee Report is not just a historical document. It is the conceptual foundation on which India’s entire competition law edifice rests. Every enforcement action by the CCI – whether against a cartel in the pharma sector, abuse of dominance by a big tech platform, or a problematic merger – traces its legal basis to statutory provisions that the Raghavan Committee first recommended.

For law students and practitioners, understanding the report means understanding why the law is structured the way it is – why horizontal agreements attract stricter treatment than vertical ones, why dominance alone is not an offence, why the DG and the CCI are separate, and why government enterprises are not exempt. These are not arbitrary legislative choices; they are deliberate design decisions rooted in the committee’s analysis of India’s economic needs and international best practices.

What do you think? The Raghavan Committee recommended that competition law apply equally to government-owned enterprises – but in practice, do public sector undertakings face the same competitive scrutiny as private firms in India? And given the rise of digital markets, do you think the framework the committee envisioned in 2000 still holds up, or does it need a more fundamental rethink?

References

1. https://blog.ipleaders.in/competition-law-india/
2. https://www.indiacode.nic.in/handle/123456789/2010
3. https://www.ies.gov.in/pdfs/Report-Competition-CLRC.pdf
4. https://www.studocu.com/in/document/swami-vivekanand-institute-of-engineering-and-technology/indian-penal-court/raghavan-committee-report-analysis-competition-act-ipr-insights/136284277
5. https://www.cci.gov.in/legal-references/detail/competition-act-2002
6. https://www.cci.gov.in
7. https://prsindia.org/policy/report-summaries/report-competition-law-review-committee