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India – CCI Dismisses Allegations Of Abuse Of Dominance By Narcotics Bureau.

22 October, 2013

 


In its order of September 16, 2013, CCI dismissed a complaint filed against the Central Bureau of Narcotics (‘CBN’) and the Narcotics Control Bureau (‘NCB’). A complaint filed by a farmer of poppy seeds alleged that CBN, the sole regulator of import and export of poppy seeds into India, had abused its monopoly position by flouting the policy norms in relation to import of poppy seeds. By failing to verify whether the imports were legally cultivated in the export country, CBN purportedly facilitated the import of illegally cultivated poppy seeds in significant quantities, resulting in harm to the domestic industry.


In its order, CCI referred to the United Nations Single Convention on Narcotic Drugs, 1961, which required its signatory countries to establish a National Opium Agency (‘Agency’) to designate areas in which opium may be grown, grant licenses to cultivators and deliver physical possession of opium grown to the Agency. CCI also noted that prior to the year 2000, there existed certain restrictions on the quantity of import of poppy seeds, but these were now freely importable under the existing Exim Policy, subject to certain conditions. It was noted that in India, there existed a demand-supply gap for poppy seeds, currently being met through imports.


While examining the complainant’s allegations, CCI stated that before delineating the relevant market, assessing dominance, and determining the existence of abuse, it was first required to examine whether CBN or NCB would qualify as an ‘enterprise’ under the Act. On this basis, CCI noted that both CBN and NCB were Government-appointed agencies required to regulate the import of poppy seeds into India. Since neither CBN nor NCB could be compared to a commercial organization, they each failed to qualify as an ‘enterprise’ within the meaning of Section 2(h) of the Act. Consequently, the provisions of Section 4 of the Act relating to abuse of dominance could not be applied to CBN or NCB.

 

AZB

 

For further information, please contact:

 

Zia Mody, AZB & Partners
[email protected]

 

Abhijit Joshi, AZB & Partners 
[email protected]


Shuva Mandal, AZB & Partners 
[email protected]

 

Samir Gandhi, AZB & Partners
[email protected]


Percy Billimoria, AZB & Partners 
[email protected]

 

Aditya Bhat, AZB & Partners 
[email protected]

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