Cement industry consolidation tests competition law: India’s cement industry is becoming more concentrated, raising concerns about pricing power in a material essential to housing and infrastructure. A Business Standard analysis published on November 4 puts the combined revenue share of UltraTech Cement and Adani-controlled Ambuja Cements at 51.2% in FY26, up from 38.7% a decade earlier. That warrants scrutiny, though it does not establish a duopoly or prove that competition has weakened. National revenue shares cannot show how much choice buyers have in individual markets. The regulatory task is to assess whether successive acquisitions are removing effective competitors, and whether the resulting efficiencies reach consumers.
The distinction matters because cement competition depends heavily on geography. A producer’s ability to discipline a rival’s prices rests partly on whether it can supply the same customers at a competitive delivered cost. A national industry can retain several sizeable companies while particular markets offer buyers fewer practical alternatives.
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Cement is also relatively standardised, although brands differ in product mix, distribution and service. Fewer independent suppliers can make coordinated conduct easier or reduce the pressure to compete. Neither outcome follows automatically from consolidation.
Cement competition is regional
Acquisitions have enlarged both groups. UltraTech’s purchase of India Cements received Competition Commission of India approval in December 2024. Ambuja’s expansion has included Sanghi Industries, Penna Cement and Orient Cement. The Adani group completed its acquisition of Ambuja and ACC in September 2022, rather than 2023 as sometimes reported. The acquisition announcement establishes that starting point.
These transactions can change competition beyond the capacity transferred. An independent producer makes its own decisions about expansion, dealer relationships and pricing. After acquisition, those decisions become part of a larger group’s commercial strategy. Whether that harms buyers depends on the strength of the remaining suppliers and the prospects for entry.
The CCI therefore needs to examine regional capacity, freight costs and access to alternative suppliers. Spare capacity elsewhere offers limited protection if transport makes its cement too expensive. Equally, a regional supplier with efficient plants and reliable distribution may exert more competitive pressure than its national share suggests.
The regulator has already recognised the issue. In its November 2023 announcement of a cement market study, the CCI cited structural features that make the industry susceptible to collusion. Its proposed examination covered regional concentration and consolidation, alongside prices, costs and capacity utilisation. The announcement identified grounds for investigation; it was not a finding of misconduct by particular companies.
Cement industry consolidation: Scale can lower costs
There is a substantial economic case for consolidation. Large manufacturers can spread fixed costs across greater production, improve plant utilisation and negotiate better terms for fuel and equipment. A wider plant network may allow orders to be served from closer locations. Buying a financially weak business can also preserve productive assets that might otherwise deteriorate.
Consumers can benefit from these changes. Acquisitions should therefore be assessed against a credible alternative, including the target’s ability to remain competitive independently. Protecting every existing producer would give inefficient businesses a claim on buyers’ money.
But faster revenue growth does not itself demonstrate efficiency. Acquisitions add the target’s sales to the buyer’s accounts. Changes in prices and product mix also affect revenue. Establishing gains requires evidence on costs, productivity and investment.
The same care is needed when assessing consumer benefits. Higher profits may reflect lower costs, stronger demand or greater market power. The regulator must examine whether buyers retain enough alternatives to secure competitive terms. A company’s decision to retain some savings as profit is not, by itself, a competition-law violation.
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Dominance and collusion require different evidence
The Competition Act, 2002 does not prohibit a company from becoming large. Section 3 addresses anticompetitive agreements; Section 4 prohibits abuse of a dominant position. The CCI’s explanation of its antitrust powers distinguishes these forms of conduct from merger review.
Combining the shares of two unrelated corporate groups does not establish dominance under Section 4. Nor does concentration alone prove an agreement to coordinate prices. Each concern requires evidence appropriate to the alleged violation.
India’s cement cartel proceedings show why that distinction needs care. In June 2012, the CCI imposed penalties exceeding ₹6,300 crore in a case involving cement manufacturers and their association. Those were findings in specific proceedings, rather than a permanent verdict on the industry’s conduct.
The litigation also continued through subsequent orders and appeals. UltraTech’s FY25 financial disclosures recorded appeals against the CCI’s August 2016 order and a Supreme Court stay granted in October 2018. Historical penalties should therefore be described with their procedural qualifications.
Similar price movements can warrant investigation, but common fuel costs or seasonal demand can also produce similar commercial responses. Enforcement must distinguish independent decisions from coordination. Otherwise, legitimate competition risks being treated as evidence against the companies practising it.
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Merger review must assess the next acquisition
Merger control allows the CCI to assess likely harm before a transaction changes the market. It need not wait for evidence of subsequent abuse. The commission can modify or prohibit a combination likely to cause an appreciable adverse effect on competition.
The deal-value threshold introduced through the 2023 amendments broadens the transactions requiring scrutiny. Deals exceeding ₹2,000 crore require prior approval where the target has substantial business operations in India, even when the usual asset or turnover thresholds would not bring them within review. The value threshold alone does not determine whether a transaction harms competition.
Successive acquisitions make the existing market structure especially important. A transaction that might have little effect in a crowded market could remove a significant competitive constraint in one already concentrated. Section 20(4) expressly allows the CCI to consider concentration, entry barriers and the removal of an effective competitor.
For cement, that assessment should include whether competing producers can obtain limestone, expand capacity and reach dealers on viable terms. Access to rail transport and other logistics deserves scrutiny where it materially affects the ability to supply customers. Any claimed efficiency should be tested against the loss of competitive pressure in the affected market.
India needs investment in cement capacity, and efficient large producers can supply it. The harder judgment concerns the next takeover: whether its benefits justify removing a supplier that still gives buyers a credible alternative. Once that independent business has been absorbed, restoring the lost competitive pressure may be considerably harder.