On 21 August 2026, the Competition Commission of India (CCI) penalised two dealer associations and their office-bearers for orchestrating a boycott of online agri-input platforms. In Ulink Agritech Private Limited v. Agro Input Dealers Association, Case No. 06 of 2023, the CCI found that Agro Input Dealers Association (AIDA) and Agro Input Welfare Association (AIWA), along with four individuals, had contravened Section 3(3)(b) read with Section 3(1) of the Competition Act, 2002. AIDA was fined ₹80,889 and AIWA ₹3,92,269; the individual penalties were ₹4,98,903, ₹74,717, ₹9,177 and ₹8,622. The combined penalties, therefore, amount to ₹10,64,577. The CCI also directed the associations to conduct competition-compliance training and submit compliance reports.
The order exposes a structural gap in India's penalty framework. When the wrongdoer is a trade association, a penalty calculated on the association's own income may remain largely disconnected from the economic value protected by the conduct and the gains enjoyed by members who benefit from restricting a competing distribution channel.
Ulink Agritech operates AgroStar, supplying agricultural inputs and advisory services through a mobile application, a call centre and a network of Saathi stores. In 2022, the Insecticides (Second Amendment) Rules inserted Rule 10E into the Insecticides Rules, 1971, expressly permitting licensees to sell insecticides through e-commerce entities. Despite this, AIDA issued a communication dated 5 August 2022 asking agri-input companies to stop sales through online platforms. The CCI's order records that AIDA and AIWA pressured dealers and other market participants not to deal with online platforms and that the boycott campaign affected AgroStar's ability to obtain supplies and expand its business.
The investigation also identified an important conflict of interest. The CCI recorded the Director General's finding that Manmohan C. Kalantri and Arvindbhai Jerambhai Patel had substantial business interests in the sale of agri-input products, while online agri-input businesses could emerge as competitors to their businesses. The Director General concluded that the associations' conduct limited the channel of supply and distribution and hindered the growth of technology-based players such as AgroStar.
The legal prohibition is relatively clear. Section 3(3) applies to a practice carried on, or decision taken, by an association of enterprises engaged in identical or similar trade where the conduct falls within the categories specified in the provision. A collective restriction on a distribution channel can therefore attract the presumption under Section 3(3). The Supreme Court in Competition Commission of India v. Coordination Committee of Artists and Technicians of West Bengal Film and Television, recognised that collective decisions of associations that restrict market access can fall within competition law, notwithstanding the association's stated objectives.
The more difficult issue is deterrence. Section 27(b) permits the CCI to impose a monetary penalty on the enterprise or person in accordance with the statutory framework. The CCI's 2024 Monetary Penalty Guidelines prescribe a methodology under which the Commission considers an amount up to 30 per cent of the average relevant turnover or average income, subject to the statutory maximum, and then adjusts the amount by reference to mitigating and aggravating factors. Those factors include the nature and gravity of the contravention, the duration, the role in orchestrating the conduct, coercive or retaliatory measures, and repeated contravention. The Guidelines, therefore, already give the CCI tools to calibrate penalties to the seriousness of the conduct.
The difficulty lies in the financial base itself. In the AgroStar case, the CCI calculated the penalty at 5 per cent of each association's average income: ₹16,17,773 for AIDA and ₹78,45,375 for AIWA. Even a serious percentage applied to a modest association income can produce a modest absolute penalty. The problem is not that the CCI ignored gravity; rather, the association's own income may bear little relationship to the economic value protected by the boycott. Where the benefits of excluding an online rival accrue primarily to member dealers, a penalty imposed only by reference to association income may fail to alter the members' incentives.
The individual liability provisions partly address this problem, but they do not eliminate it. The CCI imposed penalties on the office-bearers whom it found liable under Section 48. The wider concern is whether members who actively implement an association boycott can themselves be proceeded against, if evidence available to prove participation in the prohibited agreement or practice. The distinction matters because the economic beneficiaries of collective restrictions may not always be the same persons who formally issue the association's directions.
European Union law provides one possible legislative response. Article 23(2) of Regulation 1/2003 permits a fine on an association of undertakings by reference, in specified circumstances, to up to 10 per cent of the aggregate turnover of each member active in the market affected by the infringement. Article 23(4) further addresses payment by members where the association cannot meet the fine. The EU model demonstrates that association-led conduct can be penalised by reference to the economic scale of the member activity affected by the infringement. It does not, however, mean that the same mechanism can be introduced in India through CCI guidelines alone.
A legislative amendment would therefore be the cleaner solution if Parliament considers member-level economic exposure necessary for association-led infringements. Section 27(b) could expressly address penalties for associations whose anti-competitive conduct is implemented or economically benefited from by members, with safeguards to prevent disproportionate penalties on small associations or members who neither participated in nor benefited from the conduct. Until then, the CCI can make fuller use of the existing framework by treating orchestration, coercion, duration and repeated association conduct as aggravating factors where the evidence supports them, and by pursuing members or office-bearers individually when their participation is established.
The issue is likely to become more important as offline and digital distribution channels compete in sectors such as agricultural inputs, pharmaceuticals and consumer goods. The AgroStar case is not merely about whether an association can oppose technological change. Trade associations may legitimately raise concerns about counterfeit or spurious products and regulatory compliance, particularly where small traders are involved. But those concerns must be pursued through lawful regulatory channels. The Insecticides Rules had already permitted licensed online sales; private collective enforcement through a boycott cannot substitute for statutory enforcement. In this case, the market entrant affected by the boycott was itself a technology start-up.
The CCI's direction under Section 27(g) requiring competition-compliance training is also significant. Such training can have preventive value, but its effectiveness should not depend on attendance alone. Where the Commission considers compliance training appropriate, it should require meaningful reporting on the programme, the persons covered and the measures adopted to prevent recurrence. The compliance report ordered in the AgroStar case provides a starting point for that approach.
The AgroStar order, therefore, gets the central legal principle right: trade associations cannot use collective pressure to wall off lawful distribution channels from new competitors. The harder question is whether the financial consequence is sufficiently connected to the restriction's economic scale. A penalty framework that treats association income as the only meaningful financial base may struggle to deter conduct where the association's members, rather than the association itself, capture the benefit.
As digital distribution expands, India will need a penalty framework that preserves proportionality while ensuring that association-led restrictions carry consequences commensurate with their competitive impact. The answer need not be to penalise every member whenever an association infringes competition law. It should instead ensure that those who organise, implement, or materially benefit from an anti-competitive collective restriction cannot structure the conduct so that the economic gain accrues to members while the financial risk remains with an association whose income is too small to matter.
Author is an Advocate based in Delhi. Views are personal.