Proponents of market concentration contend that concentration enables economies of scale, where large firms spread fixed costs over massive output and potentially lowering prices for consumers

In a recent television discussion, experts dissected the massive operational crisis at IndiGo, India's largest airline with over 65% market share, which led to thousands of flight cancellations in December 2025. The disruptions, triggered by the airline's failure to adequately prepare for revised Flight Duty Time Limitation (FDTL) rules aimed at reducing pilot fatigue, stranded passengers nationwide, missing critical events like weddings, funerals, and job interviews. Parallels were drawn to the past, recalling how Vijay Mallya's Kingfisher Airlines once made passengers feel valued through personal video messages, an illusion shattered as the sector consolidated into a near-duopoly dominated by IndiGo and Air India.

The crisis highlighted the vulnerabilities of market concentration. Passengers faced cramped seating, overpriced services, and poor treatment in a market with limited choices, a situation exacerbated when IndiGo grounded over half its fleet due to crew shortages under the new FDTL norms, implemented fully on November 1, 2025. 

Despite ample notice, IndiGo misjudged pilot requirements, leading to widespread chaos. The Directorate General of Civil Aviation (DGCA) eventually granted the airline a temporary one-time exemption from certain night-duty restrictions until February 10, 2026, allowing operations to stabilize while drawing criticism for potentially compromising safety. 

The discussion extended beyond aviation to broader concerns about concentration in sectors like UPI payments and e-commerce. While experts agreed high market shares aren't inherently problematic, the IndiGo episode underscored the risks when dominant players exploit limited competition, eroding consumer choice and accountability. Strong, independent regulation—modelled on SEBI's success in mutual funds—was proposed as a solution to harness scale benefits without allowing abuse.

An investment expert emphasized reducing barriers to entry, even in essential sectors, to foster competition. He noted existing government mechanisms, like price caps imposed during the IndiGo disruptions, effectively controlled exploitative pricing. An author specialising in business and economy argued that while past laws like the MRTP Act capped market shares to prevent concentration, the current focus under the Competition Commission of India should be on prohibiting abuse of dominance rather than dominance itself.

Proponents of market concentration contend that concentration enables economies of scale, where large firms spread fixed costs over massive output, reducing per-unit expenses and potentially lowering prices for consumers. In natural monopolies—sectors like utilities where duplicating infrastructure (e.g., water pipes or power grids) is inefficient—a single provider can deliver services more affordably than fragmented competitors. 

This efficiency can spur innovation, as high profits fund R&D, and foster productivity gains that boost wages and GDP. For instance, in regulated environments, monopolies like public utilities have historically provided stable, low-cost services without wasteful duplication. Historical examples include AT&T's mid-20th-century dominance in U.S. telecom, where strict rate-of-return regulation ensured affordable access while enabling nationwide network expansion. 

Similarly, South Korea's chaebols (family-run conglomerates) control vast swaths of the economy yet have propelled rapid industrialization through scale-driven exports. In the U.S., rising concentration in retail via superstores and e-commerce has lowered prices and improved efficiency, benefiting consumers despite fewer players. Opponents highlight how concentration erodes competition, leading to higher prices, inferior quality, and reduced choice—hallmarks of the IndiGo crisis. 

Without rivals, firms can impose markups (prices above costs), creating "deadweight loss" where output falls below efficient levels, stifling innovation as incumbents face less pressure to improve. This dynamic exacerbates inequality by suppressing wages (via monopsony power over labor) and limiting entry for startups, dampening overall growth.

In India, oligopolies in cement and telecom have been criticized for inefficiencies and tacit collusion, where firms shadow each other's pricing to maintain supra-competitive profits, harming allocative efficiency. Economist Nouriel Roubini warned in 2023 that India's crony capitalism and oligopolistic corporate sector could curb growth, erode institutional trust, and deter foreign investment.

A middle ground advocates neither unchecked concentration nor forced fragmentation but targeted regulation to curb abuse while preserving efficiencies. Under frameworks like India's Competition Act, the focus shifts from market share caps (as in the outdated MRTP Act) to prohibiting "abuse of dominance"—e.g., predatory pricing or exclusionary tactics—allowing beneficial scale without exploitation. 

Price-cap regulation, where authorities set maximum rates periodically, has succeeded in utilities by incentivizing cost reductions beyond caps. Behavioral remedies, such as mandating data-sharing in digital oligopolies or easing entry barriers, can foster "collective dominance" scrutiny in interdependent markets like Indian telecom duopolies. 

Experts like those in the IndiGo panel echo this: Reduce invisible barriers (e.g., licensing) while empowering regulators like the CCI to issue "yellow cards" for minor infractions and enforce entry in essentials. This approach, modeled on SEBI's mutual fund oversight, balances innovation with consumer protection.