Competition regulator dismisses case against Jindal Stainless over deals with Indonesian suppliers

New Delhi: The Competition Commission of India (CCI) on Tuesday dismissed a case against Jindal Stainless (JSL), finding no prima facie evidence of the company’s procurement arrangements with Indonesian suppliers violating antitrust rules.

The complaint, filed by an anonymous entity engaged in the downstream production and trade of stainless steel products, had accused JSL, Indonesia-based Eternal Tsingshan Group and others of indulging in anti-competitive conduct. The informant’s name has been kept confidential for now.

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The complainant alleged that Jindal Stainless had got into exclusive arrangements with the Indonesian suppliers for stainless-steel slabs and hot-rolled coil rich in nickel, depriving its Indian competitors of a crucial input.

The domestic stainless-steel industry is dependent on imports, as India does not possess indigenous nickel reserves, it claimed.

The informant also claimed that JSL’s dealership programme "Jindal Saathi" and the memorandum of understanding associated with the programme were anti-competitive in nature. The terms of the MoU and the programme require participating dealers to procure the maximum possible quantity of material directly from JSL, thereby “creating a de facto exclusivity arrangement and lock-in effect in the downstream market”, the complainant alleged.

CCI observations

In its order, the CCI, however, observed that the complainant didn’t produce any evidence to show that it, or any other competing manufacturer, sought access to stainless-steel slabs and stainless-steel hot rolled coils or other critical inputs but was denied such access.

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“Likewise, no evidence has been adduced to show that any competing manufacturer suffered production constraints, reduced output, market exit or any other competitive disadvantage attributable to restricted access to such inputs,” the order said.

On the upstream market, the Commission held that JSL does not appear to hold a dominant position, although the regulator acknowledged that JSL appeared, prima facie, to occupy a dominant position in the downstream market for cold-rolled stainless steel. However, the CCI found no evidence of abuse of such a position by JSL.

As for the “Jindal Saathi” dealership programme and the associated MoUs, the order said the participation in it is voluntary and not a precondition for buying material from the company.