Delay in regulatory clearances can lead to uncertainty, says Sitharaman
Delays in regulatory clearances can lead to uncertainty and disrupt commercial timelines, said Finance Minister Nirmala Sitharaman as India negotiates trade deals with various countries, including the US. She said it was imperative that regulatory frameworks also facilitate swift and seamless approvals for combinations that pose no harm to competition.
At the function to mark the 16th Annual Day of the Competition Commission of India (CCI) on Tuesday, Sitharaman said the regulator had emerged as a key institution in safeguarding the spirit of liberalisation, while checking its excesses and stressed that competition drives efficiency, nurtures innovation and benefits consumers.
The minister said not only business conduct, but also government policies, laws and regulations should not influence competition as she mentioned that entry barriers, licensing norms or procurement rules can also create distortion. The Green Channel mechanism, which is a trust-based, risk-calibrated approach, allows for automated approval of combinations that are deemed to have no appreciable adverse effect on competition to reduce transaction costs and timelines for benign mergers and acquisitions, she added.
Meanwhile, CCI chief Ravneet Kaur said the new cost of production norms will help in having more accurate and objective assessment for easier enforcement outcomes. She said digital markets see rapid change and the first mover advantage gets concretised very quickly. “We have the possibility of algorithmic decision-making and self-preferencing by those having the first mover advantage,” she said.
She added there was a need to have a balance in looking at such conduct, where the approach is “evidence-based, proportionate and anchored in rigorous economic analysis”.
