Today that voice has died down. IndiGo and Air India together control about 90% of the domestic aviation market. Something fundamental has changed in India’s markets and not for the better.
Let me be straight about what worries me the most. It is not market volatility. It’s not even global headwinds. Indian markets are slowly, silently consolidating into what economists call duopolies—structures where only two players control everything that matters.
After navigating multiple market cycles, I learned one enduring truth: competition creates wealth; Concentration destroys it. And today, one sector after another in India’s economy is quietly becoming bilateral where the two giants hold 70-90% market share. This is no longer a theoretical risk. It is now embedded in the structure of modern Indian markets.
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Think about your daily life. When you order food, it’s Zomato or Swiggy—together handling about 95% of delivery. When you book a cab, be it Ola or Uber. When you pay digitally, it’s PhonePe or Google Pay with over 80% share. Your mobile connection? Jio and Airtel have effectively erased meaningful competition.
different fields. Same pattern.
In theory, competition protects consumers. The price goes down. Quality improves. Innovation thrives. But when the market narrows down to two dominant players, competition becomes demonstrative. Prices cannot rise overnight. Service does not degrade immediately. But incentives change quietly.
When there are only two players left in the game, they stop fighting for customers—and start managing the market.
We have seen this movie before. In sectors like Telecom, Cement, Stock Exchange. A brutal price war wipes out weaker players. Capital burns. Balance sheets crack. The exit follows. And suddenly, the choice disappears.
What follows is not chaos.
What follows is control.
Source: DGCA Report
Duopolies do not require overt collusion. They don’t need backroom agreements. They just observe each other. They calibrate responses. They avoid aggressiveness that disrupts profits. Economists call it Clear coordination. Consumers perceive it as high rents, convenience fees, deterioration in quality and slow innovation – a tacit understanding that benefits incumbents at the expense of everyone else.
ETMarkets.comAviation provides a clear example. When one airline controls about 65% of the market and the combined duopoly reaches 90%, the question is no longer one of efficiency – it’s one of market power. The recent regulatory scrutiny surrounding Indigo is no accident. He expresses a deep discomfort with how concentrated the industry has become.
And this is where the real danger lies.
When market power is concentrated, the market ceases to be a level playing field. It becomes a gated community. And regulators are starting to take notice. In a quiet but meaningful shift, the government recently approved new airline entrants Al Hind Air and FlyExpress while Shankh Air is poised for take-off, in an apparent attempt to slow down the aviation duel dominated by IndiGo and Air India. These approvals are not regular. They reflect the growing recognition that when two players control nearly 90% of the market, the risk is no longer competitive—it’s structural.
Whether these new airlines will succeed is a different question. Aviation is unforgiving, capital is scarce, margins are slim but the objective matters. It signals that policymakers understand a fundamental truth: markets don’t self-correct once concentration hardens—they need intervention before dominance becomes inevitable.
Let me be clear: this is not an argument against big companies. India needs a champion. It needs global leaders with scale and ambition. But leadership must coexist with competition—the constant threat that a smaller, sharper competitor can disrupt you.
Without that threat, markets stop serving consumers. They start serving themselves.
Investors—especially retail investors—demand maturity at this point. Duopolises can look attractive in the short term. Cash flow stabilizes. Margins expand. Volatility is reduced. But long-term value creation depends on healthy ecosystems, not fragile concentrations.
As shareholders, we must ask the tough questions.
As citizens, we must demand smarter regulations.
As marketers, we must remember why there is competition in the first place.
India’s growth story is strongest when opportunity is wide, not narrow. When markets are deep, not shallow. When power circulates – rather than accumulates.
The drift towards duels is not inevitable. But ignoring it makes it so. Markets always reward those who see patterns before they become apparent. A duopoly pattern is now evident.
The only question remains: What are we going to do about it?
(Writer Jimeet Modi is founder and CEO of SAMCO Group. Views are his own)
(disclaimer: Recommendations, suggestions, opinions and views given by experts are their own. (These do not represent the views of The Economic Times)
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