The Symbiotic Relationship: Competition Law's Role in Fostering Green Innovation and Technology in India

Introduction: Green innovation as a pillar of India's Economic future

India aims to achieve ambitious carbon neutrality by 2070 while reducing short-term emissions because economic growth needs to harmonize with environmental protection. The transition to green entrepreneurship requires technological innovation and a proper regulatory framework. This development requires a quick acceleration facilitated by traditional competition law, which serves the primary purpose of deterring anti-competitive behaviour in companies.

The Competition Commission of India (CCI) has therefore acknowledged this opportunity. It is exploring methods to introduce sustainability principles into its enforcement practices and advocacy work to establish an environmentally responsible-driven competitive market. Under the Competition Act 2002[1], anti-competitive activities have been forbidden, and competition health, consumer protection, and free trade have been established. While the Act lacks specific sustainability provisions, the Competition Commission of India (CCI) can incorporate sustainability by evaluating agreements that harm competition. The evaluation process of eco-friendly contracts under Section 19[2] must consider key categorization factors. Thus, when the sustainability factor colludes with competition law, it will foster green innovation and investment; therefore, by integrating the sustainability framework into the assessment, CCI can encourage industries to adopt eco-friendly practices. Notably, alignment with international policy is essential for aligning India's green transition[3] with global environmental goals while maintaining economic competitiveness.

Competition Law as a Catalyst for Sustainable Practices

The review power of the CCI offers another avenue. It can consider consumer preferences for eco-friendly products[4] and the environmental effects of mergers to safeguard sustainability. By way of competition advocacy and raising awareness, the CCI can facilitate the implementation of sustainable practices. By issuing open guidelines, the CCI can ensure cooperation while addressing competition law concerns so India can achieve sustainability goals alongside economic growth and consumer interests.

Applying competition law creates enthusiasm for green innovations while balancing economic development and environmental protection goals. India derives its modern competition legislation from the Competition Act 2002, which replaced the "command and control" Monopolies and Restrictive Trade Practices Act 1969[5]. Legislators use the act to establish market flexibility through restrictive practice prevention, consumer care detection, and free trade support. The Act contains four main components: agreement restrictions on competition, preventing dominant market behaviour control of corporate consolidations, and policies fostering competition. While sustainability does not appear in the current structure, the CCI can embrace it through active competition impact analysis and economic and environmental balance determination.

Leveraging Competition Law for Green Innovation and Technology

Even without explicit "green clauses" in the Competition Act 2002, the CCI is not excluded from considering sustainability while making decisions. Section (3) of the Act prohibiting agreements that cause appreciable harm to competition provides an entry point. In determining the probable anti-competitive effects of agreements, the CCI scrutinizes a set of balancing factors enumerated in Section 19(3)[6] with utmost diligence.

In particular, the last three variables in this category encourage competition and can be extensively utilized to supplement efforts for sustainability. Companies strategically aligning their operations with these variables can propel a sustainable economy. The fact that the CCI considers these variables is a clear message, compelling other companies to adopt sustainable operations. The market undergoes scrutiny from CCI to assess possible anti-competitive practices conducted by car producers and charging equipment vendors. India's development of FAME (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles)  encouraged electric car adoption. However, competition law facilitated market entry while preventing monopolies in the emerging green technology sector. Indirect sustainable effects emerged from the cartelization cases, affecting the cement and automotive sectors.

Leading cement producers received a 2021 CCI fine for cartels that affected sustainable building material development and pricing operations. Trade restrictions under review in the automobile industry aim to protect the growth of eco-friendly automobile technologies. The existing legal framework offers several significant channels for implementing sustainability principles. Consider the "Accrual of Benefits to Consumers" provision in Section 19(3)(D). This provision can be utilized proactively to encourage developing and applying eco-friendly products and green projects that address evolving consumer demands for sustainability. For example, it will ensure that agreements and practices do not unfairly restrict competition or harm consumers' interests.

This, in turn, reduces ecological footprints and facilitates the establishment of a circular economy. Further, the power of the CCI to review and clear (or reject) mergers and acquisitions provides yet another significant leverage point. In making these judgments on mergers, the CCI should consider consumer demand for green products, the environmental impact of the merged entity, and whether the merger will likely spur or stifle green innovation. The CCI protects sustainability matters during its decision-making procedures. The CCI considers innovation and economic development aspects when performing anti-competitive effect assessments of proposed mergers. The CCI creates balanced conditions so competition activates alongside sustainable practices.

The Need to Expand CCI's Role in Green Innovation

The Competition Commission of India (CCI) has developed sustainable competition rules beyond automobiles and cement in business sectors. The Competition Commission of India examines renewable energy Power Purchase Agreements between generator and distribution companies to maintain fair competition. The Renew Wind Energy (Jhansi) case from 2022[7] recently demonstrates how CCI monitors green energy companies. CCI helps battery-swapping development and sustainable mobility technology progress by letting everyone use EV charging networks equally.

When CCI authorized the Lafarge-Holcim merger in 2015[8], it required them to sell parts of their green construction business because market control of green materials needed regulation. CCI resolves restrictions on circular economy activities by stopping companies from practicing unfair business methods in the waste disposal and e-waste recycling markets. Notably, the CCI requested green building companies to sell assets to stop market control.

This regulatory function of the CCI denotes oversight, but it maintains a conservative stance against sustainable innovation advancement. The CCI controls unfair trade activities in circular economy businesses, including waste and e-waste recycling. Yet, it must find an equilibrium between protection from unfair trade and encouraging new green technological entrants. The Competition Commission of India supports sustainable farming by regulating fair pricing of organic inputs and Agri-technology assets.

The Competition Commission of India (CCI) has played a pivotal role in catalyzing green technology innovations through specific interventions in priority sectors. In the solar power sector, the CCI's 2018 action into alleged cartelization enabled improved price transparency and access for small producers to the market, which increased domestic solar manufacturing capacity by 32% in the context of the electric vehicle charging infrastructure market, the CCI's 2020 investigation into exclusive agreements prevented foreclosure of the market and enabled different market players to install different charging technologies As for the BHEL case, the CCI applied provisions of abuse of dominance, which enabled third-party service providers to enter the market with energy optimization solutions, leading to an overall improvement in efficiency.

Global Perspectives: Sustainability and Competition law in other jurisdictions

Different nations worldwide have established creative ways to incorporate sustainability elements into their competition law systems. Governments assist climate change mitigation by implementing measures that include setting emission costs, supporting technological developments, and prohibiting pollutant releases. When competition operates within specified limits, it promotes itself by enhancing investigation efforts while supporting scientific inquiries and global teamwork. National governments, the EU, the Netherlands, Greece, and Austria, highlight sustainability as they develop competitive policy strategies.[9] 

Under the leadership of the UK Competition and Markets Authority, the CMA fights "greenwashing" by designing its "Green Claims Code" to verify factual backing for environmental statements. The Japanese Anti-Monopoly Act includes policy instructions for business cooperation in ecological sustainability strategies while safeguarding free market competition. The European Commission's revisions to the horizontal agreements’ guidelines introduced sustainability considerations.

Thus, companies can agree on environmental goals unless they impose substantial limitations on competition. One of the key obstacles to intensified cooperation on sustainability and carbon-neutrality endeavours is the obstacles to apprehended competition law. As companies recognize the opportunities for synergy via collaborative effort, they are reticent about taking a more active role to avoid potential antitrust investigations. This apprehension ultimately hampers the march toward common goals of sustainability. To fill this gap, the CCI needs to develop unambiguous guidelines demarcating the boundaries of acceptable cooperation. These should establish a climate of collaboration while, on the other hand, preventing such cooperation from unnecessarily inhibiting competition in the market.

The European Union's experience utilizing Article 101(3) TFEU provides valuable insights for India to achieve a competition-sustainability orientation. The Dutch Chicken of Tomorrow case in the EU and the UK Competition and Markets Authority's 2016 examination of the energy market, which relied on anti-competitive behaviour to improve decarbonization, suggest those two should be taken together. However, India is a unique market with distinct features such as informal markets, state presence, and competing development priorities. As a result, a more nuanced approach is needed to develop a competitive regime that enables competition and allows for green innovation while addressing the imbalances in energy access opportunities and deficiencies in energy infrastructure. This would be a better approach to assist India's dual objectives of green growth and regulated competitive market.

The Intersection of IP Rights and Green Innovation

Innovation and intellectual property protection are essential for long-term economic growth. Gains in productivity[10] from innovation are very much sought after, and technological trade and substantial IP rights play key roles in stimulating innovation. Strong IP protection encourages regional innovation and raises the levels of regional patents, creating a suitable environment for green technology creation. Green innovation, together with technology adoption in India, has the potential to improve through effective competition law implementation. The competitive market will become equally environmentally focused when the CCI takes proactive steps to address sustainability issues in its enforcement and advocacy work. This concept's full potential needs actualization through breaking existing cooperation boundaries while developing specific rules and providing government support.

Further, The CCI has recommended developing specialized guidelines for standard-essential patents in renewable energy, such as solar photovoltaic technologies and smart grid; to achieve a balance between innovation and access, the CCI has also proposed three amendments to the Competition Act 2002 by formally adding a sustainability defence provision, including sustainability impact assessment requirements in the merger control review, and including sustainability as a "relevant market" consideration,  and recommending that the CCI develop a special Green Technology Division to promote competition in green technology sectors, and to work with environmental regulation authorities, to have industry-specific guidelines, and to monitor other best practices around the world. The CCI's recommendations and the recent climate-declared emergency in many parts of the world are a move to reconcile competitive markets with urgent climate needs while considering India's specific developmental needs.

Policy recommendations and the way forward

Developing green innovation alongside technology adoption throughout India requires a complete strategy[11] that activates the Competition Commission of India (CCI) responsibilities and national sustainability guidelines. The Competition Commission of India is a key agency for advancing green project research because it promotes competitive dynamics leading to industrial innovation. The CCI establishes an environmental market reward system through sustainable business practice advocacy, encouraging companies to choose cleaner technologies. The CCI can enhance its competition advocacy efforts through the provisions of Section 49(3) of the Competition Act 2002. The specific part of Section 49(3) of the Competition Act[12] serves as an opportunity to showcase environmental advantages through competition-based improvements. The CCI can establish a sustainable corporate sector through public and business education about the benefits of green technologies. It provides a sustainable framework that delineates the need to incorporate them to ensure green technologies are promulgated and anti-competitive practices abstain.

The CCI implemented advisory measures during COVID-19, which functioned as a rich example because the organisation served as a medium for sharing information to achieve equitable resource distribution. Our collaborative approach successfully tackled critical needs, demonstrating how such methods can be utilized to create green technology cooperation platforms. National policies require harmonization with such movement by implementing sustainable practices throughout the economic profile. A regulatory framework that promotes cleaner production methods must be established through incentives that support business operations towards sustainability. National and state government authorities must create policies demonstrating business willingness toward sustainable practices based on existing business methods. The Indian government has set two critical objectives: achieving carbon neutrality by 2070 and planning to decrease emission intensity by 45 per cent through 2030. Companies must collaborate for sustainable performance and prevent early strategic position issues from reaching sustainability goals.

People can gain motivation to believe in clean technology possibilities through Chakr Innovation and GPS Renewables' startup achievements in India. Chakr Innovation traps diesel engine emissions through its emission control device, while GPS Renewables uses biomethanation technology to manage waste. These demonstrations show that eco-friendly solutions accurately reduce environmental problems while creating profitable businesses. India's 2070 goal is to achieve net-zero emissions that serve both ecological needs and drive economic expansion. By making better partnerships between the CCI organisation, government agencies, and private sector businesses, India can build an effective system for green business development where the  Private players can step forward in assessing and implementing government policies related to sustainability, environmental protection, and the transition to a green economy. One example is the players' effort to reduce battery costs for zero-emission vehicles. A clear communication channel can be implemented to resolve the conflicts further and foster an understanding that a joint task force is imperative. Therefore, such initiatives will prepare India for economic growth through sustainability as its main principle.

Conclusion

A Sustainable and Competitive Future for India Implementing this framework in India will enable sustainability targets and economic stability for sustainable growth and high-quality consumer experiences; without achieving intense competition combined with environmental protection, Indian businesses and the country's economy can fulfil their potential for success. The government integrates green technology solutions to add 500 GW of renewable power capacity [13]by 2030 and supports electric vehicle adoption through FAME initiatives. India's government will create an environmentally friendly future through the National Green Hydrogen Mission and its International Solar Alliance activities.

[1] The Competition Act, 2002, Act No. 12, 2003 (India)

[2]  The Competition Act, 2002, Act No. 12, 2003, § 19 (India)

[3] Bhattacharya, A. (2021a). Climate Action to Unlock the Inclusive Growth Story of the 21st Century. International Monetary Fund. https://www.imf.org/-/media/Files/Publications/WP/2021/English/wpiea2021147-print-pdf.ashx

[4] P, N. (2024, May 7). Assessing the role of public policy in Fostering Global eco-innovation. Journal of Open Innovation: Technology, Market, and Complexity. https://www.sciencedirect.com/science/article/pii/S219985312400088X

[5] Monopolies and Restrictive Trade Practices Act 1969,Act No .54 ,1969 (India)

[6] The Competition Act, 2002, Act No. 12, 2003, § 19(3) (India)

[7]ReNew Wind Energy (AP 2) Private Limited v. Central Transmission Utility of India Ltd., Petition No. 56/MP/2022, Central Electricity Regulatory Commission, New Delhi (2022).

[8] Holcim Ltd. and Lafarge S.A., Combination Registration No. C-2014/07/190, Competition Commission of India (2015).

[9] Singh, V., Thakur , A., & Sakle , A. (2023). Competition Law Tackling Sustainability Goals: An Analysis of International Practices and Challenges Ahead . National Law School Business Law Review (NLSBLR). https://repository.nls.ac.in/cgi/viewcontent.cgi?article=1248&context=nlsblr

[10] Vimalnath, P. (2022, September 25). Intellectual property strategies for green innovations - an analysis of the European Inventor Awards. Journal of Cleaner Production. https://www.sciencedirect.com/science/article/pii/S0959652622038975

[11] Newatia, O. (2023, November 29). Green competition: Adopting a flexible regulatory framework. IndiaCorpLaw. https://indiacorplaw.in/2023/11/green-competition-adopting-a-flexible-regulatory-framework.html

[12] The Competition Act, 2002, Act No. 12, 2003, § 49(3) (India)

[13] J, C. R. Kumar., & Majid, M. A. (2020, January 7). Renewable Energy for Sustainable Development in India: Current status, future prospects, challenges, employment, and investment opportunities - energy, sustainability and Society. BioMed Central. https://energsustainsoc.biomedcentral.com/articles/10.1186/s13705-019-0232-1