Ease of doing business for MSMEs: India’s competition watchdog Competition Commission of India (CCI) has now directed kraft paper manufacturers to cease and desist from indulging in anti-competitive practices, a day after it issued cease and desist order against eight MSMEs found guilty of bid rigging and cartelization in tender floated by Eastern Railway. The latest order issued on Wednesday was against four regional associations of kraft paper manufacturers and their 115 members, many of which were MSMEs, for contravening the provisions of the Competition Act, 2002 by indulging in anti-competitive practices, CCI said in a statement.
The case initiated based on the information filed by three federations or associations of corrugated box manufacturers alleged that kraft paper manufacturer associations directed their members – kraft paper mills — to increase the price of the paper to be sold to the buyers — corrugated box manufacturers and also to create a condition of shortage to enforce the unjust price increase and shut the operation of the paper mills in a region collectively, the order statement noted.
The four associations included Gujarat Paper Mills Association and its 61 members, Northern India Paper Mills Association and its 16 members, Hyderabad Kraft Paper Mills Association and its 26 members, and South Indian Kraft Paper Mills Association and its 12 members, PTI reported. Of the 119 entities (four associations and 115 members) 31 kraft paper mills were lesser penalty applicants before the CCI. Under Section 46 of the Act, a cartel member may approach the CCI seeking a lesser penalty, in return for providing full, true and vital disclosures in respect of the alleged cartel to the Commission, the competition regulator said.
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Since many of the members of the cartel were MSMEs facing economic and financial crisis post-Covid, CCI said it refrained from imposing any monetary penalty on the infringing associations and manufacturers. Several kraft paper manufacturers even admitted their wrongdoings and adopted a cooperative and non-adversarial approach due to which CCI refrained from slapping monetary penalties.
Meanwhile, the eight MSMEs asked to cease and desist from unfair business practices on October 11 were involved in cartelization in the supply of axle bearings to Eastern Railway through directly or indirectly determining prices, allocating tenders, coordinating bid prices and manipulating the bidding process.
The eight MSMEs, as per a PTI report, were Krishna Engineering Works, Chandra Brothers, Rama Engineering Works, Sriguru Melters & Engineers, Chandra Udyog, Janardan Engineering Industries, Jai Bharat Industries and V K Engineering.
