Predation, Protection and the 'Public Interest'

A comprehensive examination of predatory pricing in the Indian context is urgently required. The opening up of the economy provides greater scope for foreign firms to engage in aggressive price competition and for Indian firms to utilise laws against predatory pricing. The terms of such a confrontation will be set by a new competition policy which is now on the anvil. This article examines the law and economics of predatory pricing, especially in cases involving imports, and tries to draw lessons from theory and experience for the proposed new competition policy.