Dealing with Duopoly in a Regulated Sector

A recent episode involving determination of fees by commodity exchanges has sparked off an intense debate on the role of a regulator in dealing with a duopoly situation. The regulator here is the Forward Markets Commission (FMC) and the players the two commodities exchanges, NCDEX and MCX. The trigger is a decision by the FMC to prevent NCDEX from dropping its prices.

Ajay Shah has a column in the Financial Express arguing against FMC’s decision and pointing to the merits of competition to consumers. But, V. Shunmugum has a retort, also in the Financial Express, to Ajay Shah’s claims. In any event, the Bombay High Court has rejected NCDEX’s petition against FMC’s ruling and hence the ball appears to be back in FMC’s court.

What is particularly interesting in this debate is a comparison of the roles of FMC (as the commodities market regulator) and SEBI (as the securities market regulator) in India.

About the author

Umakanth Varottil

Umakanth Varottil is an Associate Professor at the Faculty of Law, National University of Singapore. He specializes in corporate law and governance, mergers and acquisitions and cross-border investments. Prior to his foray into academia, Umakanth was a partner at a pre-eminent law firm in India.


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