Why IndiGo is just the tip of India’s monopoly iceberg | Talking Sense With Srini

The nationwide chaos triggered by IndiGo’s mass flight disruptions has revived long-standing concerns about monopolistic tendencies across Indian industries. In the latest episode of Talking Sense With Srini, The Federal’s Editor-in-Chief S Srinivasan unpacked why the aviation crisis is a symptom of a deeper structural imbalance in the Indian economy.

Srinivasan noted that while warnings about market concentration have circulated for years, this is the first time consumers have experienced the fallout so directly. Tens of thousands of passengers stranded for hours across airports is the clearest signal yet that unchecked dominance can quickly morph into systemic risk, he argued.

Toothless regulator

India once attempted to curb such concentration through the MRTP Act, which capped market share at an unrealistic 25 per cent. Post-1991 reforms scrapped those limits, replacing them with a more modern framework, the Competition Commission of India (CCI). But Srinivasan pointed out that unlike its US counterpart, the Federal Trade Commission, India’s regulator has remained largely reactive and toothless.

Also read: IndiGo offers Rs-10,000 vouchers to ‘severely impacted passengers’, plus compensation

The aviation sector offers the starkest example. IndiGo’s market share has doubled from 32 per cent in 2014 to nearly 65 per cent in 2024, creating a near-duopoly with Air India. Under such concentration, when a single airline falters, the entire system collapses. “Consumers are left without alternatives,” Srinivasan said, adding that India’s Herfindahl-Hirschman Index for aviation stands at an “ultra-concentrated” 4,900, compared to roughly 1,600 in the United States.

A wake-up call

While IndiGo’s rise stemmed from operational efficiency, superior on-time performance, quicker turnaround times and a young fleet, that success now poses regulatory challenges. Srinivasan highlighted that the recent crisis emerged after IndiGo failed to comply with new Flight Duty Time Limitations designed to reduce pilot fatigue. Instead of enforcing rules, the DGCA extended the deadline, a move he described as a “policeman giving more time to the violator”.

For India’s startup ecosystem, such imbalances have larger implications. Without a level playing field, smaller players struggle to scale in sectors dominated by a few giants. Srinivasan argued that regulators must prevent market distortion, ensure equal access and resist granting concessions to large incumbents.

Also read: Indigo flight chaos: Is DGCA working efficiently? | Capital Beat

As India pushes for global competitiveness and scale, the challenge is clear: build national champions without allowing them to become untouchable monopolies. The IndiGo episode, Srinivasan warned, should be treated not as a one-off failure, but as a wake-up call for India’s regulatory architecture.