In today’s Finshots, we tell you why Grasim Industries has dragged Asian Paints to the Competition Commission of India (CCI) and why, despite investigating a similar case earlier, the CCI has decided to investigate it again.

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The Story

Asian Paints is in hot water again. This time, it’s Aditya Birla Group’s new paint brand, Birla Opus, under Grasim Industries, that’s turned up the heat.

Just a few days ago, Grasim knocked on the door of the Competition Commission of India (CCI) and accused Asian Paints of abusing its dominant position in the decorative paints market. And the allegations are pretty serious.

Grasim says that Asian Paints isn’t just comfortably leading the paints market. It’s misusing its power to keep new players out. How?

Well, Grasim claims that Asian Paints is handing out extra discounts and perks like foreign trips to dealers if they promise to stick only with Asian Paints. In simple terms, these perks aren’t tied to how well a dealer performs. They’re all about staying loyal to Asian Paints. If any dealer dares to stock Birla Opus paints, Grasim says Asian Paints hits back. They cut credit limits, increase sales targets, pull back those fancy perks, reduce customer leads and sometimes even open rival dealerships right next door to squeeze them out.

It doesn’t stop there. Grasim also alleges that Asian Paints also restricts suppliers of raw materials from working with them, and even influences landlords, agents and transporters to avoid doing business with Birla Opus. To top it all off, there’s talk of a fake smear campaign to ruin their reputation.

So all of these allegations felt serious enough for the CCI to order a formal investigation into the matter.

But hold on… doesn’t this feel like an open and shut case already?

After all, just about three years ago, another player, JSW Paints came to the CCI with pretty much the same complaint. Back then, the CCI didn’t find any clear misuse of power by Asian Paints.

The Director General (DG) even pointed out that JSW Paints was working with around 1,591 dealers at the time. And interestingly, 86% of those dealers were also stocking Asian Paints. So if Asian Paints really was bullying them, wouldn’t more dealers have ditched JSW instead? The numbers told an interesting story too. JSW added more net new dealers than Asian Paints’ 1,217 new dealers during 2019–21. And only about 1% of their common dealers actually came forward with any allegations. Plus, sure, some credit limits were cut, but the evidence showed that it was because of genuine payment delays, not some kind of retaliation plot by Asian Paints.

And then there’s another thing that Asian Paints highlighted this time around. 

The decorative paints industry, despite all the noise, isn’t exactly a fortress. Entry barriers are pretty low. Just look at how easily and quickly new players have jumped in and grown over the past few years. Paints don’t just sell through fancy showrooms either. They reach buyers through a huge network of multi-brand dealers. Think electrical shops, hardware stores, sanitary outlets, PVC pipe sellers and even cement shops. And these dealers usually carry multiple paint brands, and they almost always sell regional brands too.

But even with so much competition no other brand has scaled up the way Grasim has since launching Birla Opus in March 2024. Asian Paints says that Grasim has been pouring in big bucks to build factories and a massive distribution network. They’ve also hired some of the best people in the industry — even from Asian Paints itself!

The proof is in the pudding. In its first year, Birla Opus pulled in revenues of around ₹2,600–₹2,700 crores and Grasim became India’s third-largest decorative paint brand within just six months of going nationwide. In the last quarter of FY25, it grabbed a healthy single-digit market share and built up the country’s second-largest depot network. With 50,000 dealers and as many tinting machines, its reach is ahead of many older players. And thanks to its existing cement business, Grasim can tap into over 2,00,000 dealers across India, giving it an even longer runway to grow.

So all this points to one thing. There’s plenty of counter evidence to Grasim’s claims. And this could very well end up like the earlier JSW Paints case — with Asian Paints getting a clean chit.

Which brings us back to the question: if the CCI already looked into this once, why has it decided to spend time and energy digging into Asian Paints all over again to figure out if it’s really playing the bully?

Well, it seems like a lot has changed in the last three years. Or should we say… a lot hasn’t.

Because Asian Paints started way back in 1942 when the British banned paint imports and India ran short on supply. Four friends set up shop in a garage with just five basic colours. And look at them now. Over 80 years later, they’re still the undisputed king of the paints business.

Sure, new brands have popped up but there haven’t been any disruptors. Asian Paints still holds over 50% of the paints and varnish space, while its next biggest rivals, Berger Paints and Kansai Nerolac, trail far behind at about 14% and 7% respectively. That’s more than twice the gap. Its factories churn out more than half the industry’s total capacity, and its 74,000-plus dealers and 1.6 lakh retail touchpoints nearly double Berger’s reach. Add to that a current market capitalisation of ₹2.6 lakh crores that has compounded at 15% annual growth rate over nearly two decades, and you’ll see why it’s so hard to knock it off its throne.

So while the entry barriers are low, the numbers tell that capturing a substantial share in the industry isn’t as easy after all. If it were straightforward, there wouldn’t be such a fight for market share in paints. 

Besides, even though the earlier JSW Paints case went in Asian Paints’ favour, the door was never fully shut. The CCI did hint that stronger proof could swing things differently next time. And this time, there’s more evidence.

For context, a market survey Grasim did through a third party shows dealers claiming Asian Paints wasn’t so subtle about keeping them loyal. Some said they were pushed to send back the new Birla Opus tinting machines under pressure. Asian Paints allegedly dangled extra incentives like an extra 1–2% discount, if dealers ditched other brands’ machines. Territory Sales Officers would even slow down credit note approvals (a refund slip for returned or damaged items or purchase adjustments) or drop hints that life would be smoother if they stuck to Asian Paints’ machines.

And here’s something you should know. Tinting machines are an important part of expanding any paints business. Dealers keep basic paints and colours, and these machines mix them to create any shade a customer wants. So it’s like the final link between the paint company and the customer.

And Grasim says that its new tinting machine is better because it’s 40% smaller, can be operated using a tablet, has internet connectivity and can also show dealers useful data to manage stock. But if Asian Paints forces dealers to send these machines back or not use them, it essentially stops new technology from reaching customers. Grasim even gave a list of over 100 dealers who returned their tinting machines because of Asian Paints’ pressure.

So yeah, the CCI does seem more convinced this time that there’s enough to dig deeper into whether Asian Paints is throwing its weight around. There’s not just more evidence on the table, there’s also a whole new company stepping up with pretty much the same complaint. But this is just the opening chapter. The real verdict will come once the final findings come in about three months.

And if there’s something new in there, well… that’s a story for another day.

Until then…

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