No Prima Facie Violation of Competition Act in Nickel Supply Arrangements | CCI Closes Case No. 30 of 2025 : CCI

The Competition Commission of India (CCI) has closed an investigation into alleged anti-competitive practices by Jindal Stainless Limited and related entities, finding no prima facie violation of the Competition Act, 2002. The case examined exclusive supply arrangements for nickel-rich stainless steel slabs and hot-rolled coils, as well as a downstream incentive programme, but the Commission concluded that the evidence did not establish foreclosure or abuse of dominance.

Background & Facts

The Genesis

The Informant, an Indian stainless steel market participant, filed an Information under Section 19(1)(a) of the Competition Act, 2002 against Jindal Stainless Limited (OP-1), Eternal Tsingshan Group Co. Ltd. (OP-2), PT Qing Feng Ferrochrome (OP-3), PT Indonesia Guang Ching Nickel & Stainless Steel Industry (OP-4), and PT Indonesia Ruipu and Chrome Alloy (OP-5). The Informant alleged contraventions of Sections 3 and 4 of the Act, including exclusive dealing, refusal to deal, and abuse of dominant position in the market for wide cold-rolled stainless steel (CRSS) products in India.

Key Facts

• Nickel dependency: India lacks indigenous nickel reserves, making domestic stainless steel manufacturers reliant on imports, particularly from Indonesia following its 2020 ban on unprocessed nickel ore exports.
• Supply chain structure: The stainless steel value chain is sequential: stainless steel slabs (SS Slabs) → hot rolling → hot-rolled stainless steel (HRSS, including SS HRC) → cold rolling → CRSS (sheets, coils, coated products).
• OP-1's operations: OP-1 is a major integrated stainless steel manufacturer with operations in India and globally. It acquired 100% stake in Chromeni Steels Private Limited, enhancing its cold-rolling capacity to approximately 375,000 tonnes per annum.
• Alleged restrictive arrangements:
  • OP-1 entered into exclusive supply agreements with OP-3 for SS Slabs and with OP-4 and OP-5 for SS HRC, allegedly refusing to supply these inputs to other Indian CRSS manufacturers.
  • OP-1's Jindal Saathi programme and associated Memorandum of Understanding (MoU) required participating dealers to procure maximum quantities directly from OP-1, with volume-based discounts and bonuses linked to procurement thresholds.
• Market delineation: The Informant proposed the relevant market as the market for wide CRSS products in India, while OP-1 argued for a broader market encompassing raw materials and intermediate inputs globally.

Procedural History

• 18.12.2025: CCI directed the Informant to furnish clarifications within four weeks and forwarded a non-confidential version of the Information to OP-1.
• 25.02.2026: CCI extended the time for OP-1 to file its reply until 23.03.2026 and directed the Informant to submit its response within the same period.
• 24.06.2026: CCI considered the Information and responses filed by the Informant and OP-1.
• 21.07.2026: CCI passed the order under Section 26(2) of the Competition Act, 2002, closing the case.

Relief Sought

The Informant prayed for:

• Initiation of an inquiry under Section 26(1) of the Act by directing the Director General (DG) to investigate.
• Cease and desist directions against the Opposite Parties.
• Imposition of a monetary penalty equivalent to 10% of the average turnover of the Opposite Parties for the three preceding financial years.
• Directions under Section 28 of the Act for divestment of OP-1's interest in Chromeni to ensure a level playing field.

The Legal Issue

The central question was whether the arrangements between OP-1 and OP-3/OP-4/OP-5 for the exclusive supply of SS Slabs and SS HRC, as well as OP-1's Jindal Saathi programme and associated MoUs, constituted:

• Exclusive dealing and refusal to deal in contravention of Sections 3(4)(b) and 3(4)(d) read with Section 3(1) of the Act.
• Abuse of dominant position in contravention of Sections 4(2)(a) and 4(2)(c) read with Section 4(1) of the Act in the market for wide CRSS products in India.

Arguments Presented

For the Informant

• The Informant relied on import data and strategic investments to argue that OP-1's arrangements with OP-3, OP-4, and OP-5 foreclosed access to critical upstream inputs (SS Slabs and SS HRC), denying market access to competing CRSS manufacturers.
• The Jindal Saathi programme and MoUs were alleged to create de facto exclusivity and lock-in effects, compelling downstream purchasers to source most of their requirements from OP-1.
• The Informant contended that the arrangements resulted in denial of market access, creation of entry barriers, reduction in consumer choice, and artificial elevation of prices.

For the Opposite Parties

• OP-1 argued that the relevant market should be broader, encompassing raw materials and intermediate inputs globally, and that the Informant's delineation of the market as wide CRSS was artificial.
• OP-1 submitted that the arrangements were efficiency-enhancing backward integration initiatives to secure long-term access to critical inputs and support expansion of production capacity.
• The Jindal Saathi programme and MoUs were described as voluntary, transparent, and efficiency-driven commercial arrangements that did not impose exclusivity obligations or minimum purchase commitments.
• OP-1 contended that nickel-rich raw materials, stainless-steel scrap, SS Slabs, SS HRC, and CRSS are available from multiple domestic and international sources, and that the Informant failed to establish any denial of access or foreclosure.

The Court's Analysis

The CCI examined the allegations under Sections 3(4) and 4 of the Competition Act, 2002 in the context of the stainless steel value chain and the specific arrangements alleged.

Relevant Market and Dominance

• The CCI noted that the Informant's proposed market for wide CRSS in India was unduly narrow, while OP-1's proposed market for procurement and supply of raw materials and intermediate inputs globally was excessively broad.
• The CCI determined that the issues were more appropriately examined within vertically related markets: (i) the upstream market for the supply of SS Slabs and SS HRC used in the manufacture of CRSS in India, and (ii) the downstream market for CRSS in India.
• The CCI found that OP-1 did not hold a dominant position in the upstream market, given the presence of multiple domestic and international suppliers.
• However, the CCI prima facie found that OP-1 enjoyed a position of strength in the downstream market for CRSS in India, particularly in the wide CRSS segment, based on its scale of operations, economic strength, and degree of vertical integration.

Analysis of Allegations under Section 3(4)

• The CCI observed that the Informant did not furnish any direct evidence demonstrating that it or any other competing manufacturer sought procurement of SS Slabs or SS HRC from OP-3, OP-4, or OP-5 and was refused supply.
• The allegations were based largely on circumstantial indicators such as import patterns and strategic investments.
• The CCI noted that OP-1 is not the only entity procuring such inputs from Indonesia, and that SS HRC is routinely imported into India from several countries.
• The CCI also noted that OP-1 supplies billets sourced from Indonesia to various domestic manufacturers, and that multiple domestic suppliers of SS Slabs, SS HRC, and other intermediate products exist.
• The CCI found that the impugned arrangements did not result in the creation of barriers to entry, input foreclosure, or adverse impact on consumers. The joint venture between OP-1 and the ET Group was presented as a backward integration initiative to secure long-term access to critical inputs and support expansion of production capacity.
• The CCI concluded that the allegations of exclusive dealing and refusal to deal leading to foreclosure of access to SS Slabs and SS HRC appeared unfounded, and that there was no prima facie violation of Sections 3(4)(b) and 3(4)(d) of the Act.

Analysis of Allegations under Section 4(2)(c)

• The CCI found that the Informant did not place any evidence on record to demonstrate that it or any other competing manufacturer sought access to SS Slabs, SS HRC, or other critical inputs and was denied such access.
• OP-1 submitted that SS Slabs, SS HRC, and other intermediate stainless-steel products are available from multiple domestic and international sources, and that it manufactures and supplies a range of stainless-steel products to downstream processors and manufacturers.
• The CCI noted the presence of several domestic manufacturers of SS Slabs, SS HRC, and other intermediate stainless-steel products, as well as independent re-rollers and processors.
• The CCI concluded that the allegation that the impugned arrangements resulted in denial of market access to competing manufacturers in the downstream market for CRSS in India was not substantiated, and that there was no prima facie violation of Section 4(2)(c) of the Act.

Analysis of OP-1's Conduct under the Jindal Saathi Arrangement and MoU

• The CCI noted that the Jindal Saathi programme was introduced in July 2019 as a co-branding initiative for pipe and tube manufacturers to curb counterfeiting and ensure traceability.
• The CCI found that the MoU was a voluntary, non-binding, and incentive-based commercial arrangement that did not constitute a purchase or supply agreement or impose any minimum purchase obligation, exclusivity requirement, or penalty for procuring material from competing suppliers.
• The CCI observed that participation in the programme was optional and not a precondition for purchasing material from OP-1, and that a substantial number of pipe and tube manufacturers either procure from suppliers other than OP-1 or continue to purchase from OP-1 without participating in the MoU or the programme.
• The CCI concluded that the impugned arrangements did not result in customer lock-in, exclusivity, denial of market access, loss of customers, or foreclosure of competing manufacturers, and that there was no material to conclude that the arrangements resulted in an abuse of dominant position under Sections 4(2)(a) or 4(2)(c) of the Act.

The Verdict

The CCI closed the case under Section 26(2) of the Competition Act, 2002, finding no prima facie case of contravention of the provisions of the Act against the Opposite Parties. The Commission:

• Directed the information to be closed.
• Granted confidentiality to the Informant's identity and certain documents/information submitted by the parties for a period of three years from the passing of the order.

What This Means For Similar Cases

Exclusive Dealing and Refusal to Deal Require Concrete Evidence of Foreclosure

• Practitioners must ensure that allegations of exclusive dealing or refusal to deal are supported by direct evidence of denied access or foreclosure, rather than relying solely on circumstantial indicators.
• The CCI emphasized that the mere existence of exclusive arrangements does not prima facie establish foreclosure if alternative sources of supply are available.

Dominance Must Be Established in the Relevant Market

• The CCI clarified that dominance must be assessed in the relevant market, which requires careful delineation based on substitutability and competitive constraints.
• A broad market definition that encompasses multiple distinct products may dilute the assessment of dominance.

Voluntary Commercial Arrangements Are Not Presumptively Anti-Competitive

• The CCI recognized that commercial arrangements such as the Jindal Saathi programme and MoUs, which are voluntary, transparent, and incentive-based, do not constitute abuse of dominance if they do not impose exclusivity obligations or restrict customer choice.
• Practitioners should ensure that such arrangements are structured to avoid lock-in effects or coercive elements that could foreclose competition.