Market Share Caps: India's Solution to Systemic Risk in Key Sectors

• India's aviation, telecom, and power transmission sectors face systemic risks due to excessive market concentration by dominant players like IndiGo and Power Grid Corporation of India Ltd.
• IndiGo's dominance (65% market share) led to widespread flight cancellations and regulatory intervention, highlighting the lack of alternatives when a single entity falters.
• Power Grid Corporation's control of over 50% of inter-state transmission projects has resulted in significant delays (18-30 months) in crucial clean energy projects, impacting states like Rajasthan and Gujarat.
• The telecom sector previously experienced market consolidation, leading to higher prices and reduced consumer choice, prompting TRAI to implement spectrum caps to ensure competition.
• Implementing market share caps, similar to those in telecom, for sectors like power transmission can de-risk critical infrastructure, ensure competition, and accelerate India's clean energy transition.

Why It Matters: Capping market share for dominant players is crucial to mitigate systemic risks and foster competition across India's key sectors.