India’s economic self-image is built on velocity—fast growth, rapid scaling, and spectacular headline numbers. Airports expand, data flows surge, platforms multiply, and balance sheets swell. Yet beneath this confident narrative lies a quieter, more unsettling transformation. Across sector after sector, competition is thinning, power is concentrating, and markets increasingly resemble narrow corridors controlled by a handful of gatekeepers. Scale, once a means to efficiency, is beginning to mutate into systemic vulnerability. When dominance crosses a certain threshold, the failure or inertia of one firm does not remain a corporate problem; it spills outward, disrupting millions of lives at once. At that point, efficiency turns fragile and growth subtly becomes exclusionary.

The aviation sector exposes this fragility with brutal clarity. IndiGo’s market share, hovering between 60 and 65 percent, does not by itself violate competition law. Indian jurisprudence is explicit: dominance is not illegal; abuse of dominance is. Yet December’s cascading flight disruptions revealed a deeper structural weakness that law often struggles to capture. When one airline stumbles operationally, the market fails to self-correct. Rival carriers lack spare capacity to step in “in a timely, likely, and sufficient manner.” Flights are cancelled en masse, prices spike, and passengers are stranded nationwide. This is not simply poor service; it is the lived experience of systemic risk created by excessive concentration. When one firm’s operational stress translates into nationwide paralysis, the issue transcends firm-level failure and enters the realm of public interest.

This is where the celebrated idea of Joseph Schumpeter’s “creative destruction” begins to falter in contemporary India. Competition is supposed to discipline firms, reward innovation, and continuously replace the inefficient with the superior. But creative destruction presumes the existence of credible challengers. In highly concentrated markets, destruction occurs without creation. Capacity disappears faster than alternatives can emerge. Innovation stagnates, not because firms are lazy, but because dominance dulls the pressure to improve. In aviation, innovation for ordinary consumers is not about marginal algorithmic tweaks or financial engineering; it is about reliability, redundancy, and resilience. When a single disruption collapses output across the country, the core competitive parameters of quality and reliability have already eroded.

Telecom tells a similar story, though with different origins. The sector has slid from a vibrant multi-player market into a fragile near-duopoly dominated by Reliance Jio and Bharti Airtel. Jio’s 2016 entry was disruptive in the best Schumpeterian sense: prices crashed, data consumption exploded, and digital inclusion surged. Consumers benefited enormously. But the consolidation that followed has left the market brittle. Vodafone Idea struggles to survive, BSNL lags technologically, and spectrum pricing frameworks increasingly favour deep-pocketed incumbents. The concern today is no longer cheap tariffs; it is future innovation, network resilience, and strategic dependence on a tiny set of firms controlling the nation’s digital bloodstream.

Digital payments offer a more nuanced case. Google Pay and PhonePe dominate transaction volumes, yet their power is partially constrained by the architecture of UPI as public digital infrastructure. Switching costs are low, and alternatives like BHIM theoretically have unlimited scale potential. Yet behavioural economics explains why theory diverges from reality. Status quo bias, branding embedded into QR codes, network effects, and passive governance all tilt user behaviour toward private platforms. Dominance here is not enforced by proprietary technology alone but reinforced by psychology and the state’s reluctance to actively shape outcomes.
Infrastructure and logistics raise even more consequential questions. Ports, airports, power, transmission, and logistics increasingly intersect within the same corporate ecosystems. Vertical integration may deliver efficiencies, but it also raises formidable entry barriers and enables leverage across markets. This is not merely a competition issue; it is a strategic one. Over-reliance on a few conglomerates heightens systemic risk and complicates questions of national resilience in sectors critical to trade, energy, and mobility.

India’s legal framework is not oblivious to these dangers. The Competition Act deliberately avoided rigid numerical thresholds after liberalisation, adopting instead a qualitative test of dominance: the ability to act independently of competitive forces. Parliament assumed expert regulators would apply this flexible standard intelligently. That assumption is now under strain. The Competition Commission of India and sectoral regulators—DGCA, TRAI, RBI, and others—often operate in silos, react late, and communicate cautiously. Press releases substitute for reasoned orders, and crises are addressed episodically rather than diagnostically.
The core failure is not the absence of regulation but the absence of anticipation. Competition law is meant to be preventive, not merely punitive. Price, output, and quality—the three consumer harms regulators are tasked to monitor—are often examined only after collapse occurs. When output falls sharply or quality deteriorates at scale, regulators appear compelled to “do something,” yet rarely explain clearly what structural vulnerabilities allowed the failure to propagate so widely.
The implications for India’s growth trajectory are profound. Concentrated markets dampen innovation, magnify systemic risk, and quietly tax consumers through higher prices, fewer choices, and poorer services. More dangerously, they entrench economic power in ways that distort policymaking and weaken democratic accountability. Growth built on narrow pillars may look impressive, but it is inherently fragile.

India does not need to fear scale; it needs to fear complacency. Strong firms are a national asset only when surrounded by credible competitors and vigilant regulators. The challenge ahead is not to dismantle success, but to restore balance—through proactive sectoral diagnostics, genuine inter-regulatory coordination, and an uncompromising focus on consumer welfare. Otherwise, India may discover too late that an economy dominated by a few powerful hands can soar for a while, but it has very few emergency exits when turbulence inevitably hits.
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