Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/308287 
Year of Publication: 
2024
Series/Report no.: 
IZA Discussion Papers No. 17428
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
We analyse changes in market structure in India between 2000 and 2020 using a rich dataset at high levels of disaggregation. We examine the extent to which business groups – notably family-owned groups – have maintained dominant market positions in the Indian economy. We focus on two key dimensions. The first is the extent of concentration in markets and market shares by industry. The second concerns the dynamics and the extent to which business groups have focussed on consolidating their position in specific, narrow sectors or, rather, entered new sectors and diversified. We find that while market concentration has been falling, a bloc of high concentration sectors remains. Further, diversification has been actively pursued across sectors by most business groups. While this points to greater competition among business groups, the ratio of revenues to variable costs – a measure of the markup – has shifted upwards, particularly after 2013. The weight and persistence of these large business groups in the economy, as measured by the ratio of their revenues to GDP, has also increased. Finally, we discuss possible policy options.
Subjects: 
market concentration
India
business groups
Hirschman Herfindahl Indices
diversification
JEL: 
D22
L1
L11
O14
O25
Document Type: 
Working Paper

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