The Vietnamese government gave the company a “proper red-carpet treatment”, making it easy to establish operations and move things forward, Srishant Challa, Managing Director of CCL Products, told BW Businessworld in July 2025. “At the time we evaluated setting up in Vietnam, there were only small players with capacities of around 3,000 to 3,500 tonne. We went in with a 10,000-tonne plant from day one. The Vietnamese government’s incentives further helped smooth the process," he added.
The government went a step further. After showing them several industrial zones that did not align with CCL’s preference for remote locations, officials identified a district and created an industrial zone exclusively for the company. “Because we were investing in a backward region, they also offered tax holidays and multiple other incentives,” Challa noted.
However, the experience contrasts with what many businesses report in India, where regulatory red tape, procedural delays and market concentration are often cited as barriers to starting and scaling small businesses, particularly when compared with several overseas markets. Recent disruption following the IndiGo crisis has also renewed scrutiny of how monopoly or duopoly structures can squeeze smaller players, restrict competition and make market entry more difficult.
Asked if such a level of facilitation could happen in India today, Challa is cautiously optimistic. “It is possible. The governments here are becoming more investor-friendly and understand the benefits of industries coming in, from jobs to overall economic growth. The change is slow, but it is happening.” Yet, he pointed out structural differences. “In Vietnam, everything is centralised. The government is clear about what the centre and states can do. As a country, they have a unified vision to attract investment.”
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A view of CCL Products’ manufacturing facility in Vietnam.
An analysis of listed companies indicated that the average Herfindahl-Hirschman Index (HHI) across major sectors rose to about 2,532 in FY25, crossing the threshold for a highly concentrated market for the first time in over a decade, led by sectors such as telecom, aviation, steel and cement.
At the same time, profit concentration has intensified, with the top 10 per cent of listed firms accounting for over 90 per cent of net profits in 2024-25, while smaller firms’ share continued to shrink. These trends have coincided with stepped-up scrutiny by the Competition Commission of India (CCI), including probes in steel, paints and other concentrated industries, signalling regulatory concern as India enters FY26.
“Telecom has effectively settled into a duopoly-plus-one after years of price wars. It’s now largely a Jio–Airtel market, with Vodafone Idea struggling. Digital commerce, food delivery, and payments show strong platform dominance driven by network effects and deep capital. Capital-intensive sectors naturally consolidate, but in India, this is accelerated by access to funding, preferential partnerships, and scale-driven regulatory navigation," stated Jaspreet Singh, Partner and Chief Revenue Officer, Grant Thornton Bharat.
Smaller players exist, but they increasingly operate as niche specialists or suppliers to large ecosystems rather than independent challengers. These outcomes aren’t accidental; they are driven by capital intensity, network effects and the ability to absorb losses-advantages smaller players simply don’t have, Singh added.
Experts noted that monopolies often arise when a single firm pulls ahead through innovation or control over critical resources, creating entry barriers for rivals, and while such dominance can sometimes enable scale and services that fragmented markets cannot support, economists largely caution against their spread.
Beyond prices, monopolies also choke entrepreneurship by controlling infrastructure, data or supply chains, allowing incumbents to favour themselves and shut out new entrants, ultimately leading to fewer jobs, slower innovation and wider wealth inequality, while in sectors such as social media, concentrated power can even suppress independent reporting, dissenting views and political alternatives.
“India’s competitive landscape today is uneven rather than uniformly concentrated. However, in several core infrastructure sectors such as ports, airports, telecom, power transmission, the market has effectively narrowed to monopolies, duopolies, or a very small set of dominant players. This concentration is largely driven by capital intensity, long gestation periods, regulatory complexity, and the ability to absorb extended periods of low or volatile returns," stated Srinath Sridharan, Corporate Advisor and Independent Director on Corporate Boards.
Sridharan added that while scale brings efficiency, it also introduces systemic risk. If any major player in these sectors were to face financial or operational stress in the future, the consequences would extend beyond markets to citizens, given how deeply these services are embedded in daily life. That concentration risk deserves more attention in policy discussions.
Building a Small Business Across Borders
Grishma Satpathy, 28, an Indian entrepreneur from Odisha, and her co-founder Alex Jerry, originally from Kerala, started Kallu & Co. in Paris in June 2025, blending Kerala’s culinary heritage with a contemporary cultural experience. Speaking to BW Businessworld, Satpathy explained how the concept emerged from lived experience rather than a sudden idea.
“When I moved to Paris in 2023 for my master’s, I realised that India was still seen through a very dated lens. We wanted people to experience India, not just learn about it," she said. Before opening their own space, Satpathy spent a year working with another Indian restaurant in Paris, learning the intricacies of operations, staffing, sourcing, legal compliance, and daily management.
She described the process of starting a business in France as structured but detailed.
"Compared to India, the key advantage here is predictability. In France, even if approvals take time, the requirements are transparent and consistent, which allowed us to plan strategically for staffing, licensing, and operations. In India, processes can vary widely across states and cities, and local interpretation often affects timelines. For a small business like Kallu & Co., operating in a structured environment gave us confidence to invest in quality, design, and operational systems without surprises," she stated.
Despite gradual improvements, women entrepreneurs in India, particularly in tier 2 and 3 cities, continue to face significant challenges due to limited financial literacy and bureaucratic obstacles. A 2024 white paper by the Reserve Bank Innovation Hub found that only 3 per cent of women entrepreneurs in these regions have access to external funding such as bank loans or equity investments.
On accessibility, she said clarity, rather than convenience, defined the French system. “Alex and I had to translate, interpret, and cross-check every requirement ourselves,” Satpathy said. She added that local authorities were professional and process-driven, treating small businesses seriously without reliance on connections. This transparency, she said, allowed Kallu & Co. to meet compliance requirements without delaying the launch.
 A view of Kallu & Co in Paris
Back in India, compliance complexity continues to weigh heavily on small businesses. Experts told BW Businessworld that GST filings, labour law interpretations, state-level licences, and frequent government notices consume a disproportionate share of time and capital for MSMEs. While larger companies manage these requirements through in-house teams, small manufacturers often rely on external consultants.
Experts noted that although India’s ease of doing business has improved, day-to-day operational friction for small entrants remains significant. An example is the 2022 bribery case against a senior government official of India's drug regulatory agency, the Central Drugs Standard Control Organisation (CDSCO). Five individuals, including the Joint Drug Controller of CDSCO and the consultants, were arrested after an investigation for allowing waiver of phase III clinical trials to a private pharmaceutical company in return for bribes.
Despite the presence of large hospitality groups in Paris, Satpathy noted that the city thrives on independent, owner-led restaurants. Institutional safeguards, such as regulated rents, standardised labour laws and uniform taxation, prevent large players from dominating purely through scale. “If you offer quality, originality, and storytelling, small, experience-driven concepts can compete successfully,” she said.
Turning to India, Satpathy observed that the market is both exciting and challenging. “India’s startup scene is full of energy, and people genuinely appreciate culturally authentic, story-driven concepts. For Kallu & Co., we would approach India with preparation, patience, and strong local partners. The upside is huge, consumers are curious, and there’s a thriving entrepreneurial network," she said.
For Indian startups, industry trends point to sustained cross‑sector growth shaped by technology adoption, policy support and shifting consumer demand. Investors and startups are likely to focus on sectors where scalability, digital leverage and long‑term revenue visibility intersect amid structural headwinds.
Market Concentration, Compliance, and the Survival Challenge
While founders like Grishma Satpathy navigate operational realities and cultural storytelling, experts caution that the broader Indian business ecosystem continues to favour large players, often leaving small and emerging businesses to negotiate structural headwinds.
Competition in India, she added, can be structurally tilted toward larger players with scale advantages, such as pricing power, established supply chains, and faster regulatory navigation. Smaller entrants, by contrast, must operate on tighter margins and carefully plan their strategy. Still, Satpathy sees niche opportunities, culturally rich brands. “A founder-driven concept that showcases regional cuisine and authentic ingredients can carve a niche,” she said. “It requires patience, operational discipline, and a clear identity to compete effectively.”
A recent JR Compliance industry survey also found that prolonged certification timelines are disrupting business planning across FMCG and electronics companies, with approvals that once took weeks now stretching into several months, leading to missed sales cycles, higher working capital requirements and inventory pile-ups at ports and warehouses. The delays have forced repeated rescheduling of imports, manufacturing and product launches, with smaller and mid-sized enterprises facing greater strain due to limited compliance capacity and rising logistics and storage costs.
Looking ahead, the founders of Kallu & Co. plan to expand to India, initially targeting regions like the North and East, where Kerala cuisine is less familiar. Every aspect of Kallu & Co., from recipes to décor, reflects the brand’s ambition to create culturally immersive experiences. “Our journey is about building bridges between cultures, generations, and the world and India’s rich culinary heritage. It is not just about food; it’s about presenting India in a contemporary, confident, and globally relevant way," Satpathy said.
According to experts, the consequences of these structural realities extend beyond margins. In a market as large and diverse as India, pricing power, supply chain control, and access to capital often determine competitive outcomes more than product quality. They stressed that uniform policy reforms cannot fully address these challenges.
“India isn’t one economy, it is many,” Singh said. “A SaaS startup, a textile MSME, and a food processor face entirely different risks. Differentiated policies would improve competition without weakening regulation.” Sridharan added that sector-specific and size-based compliance frameworks would reduce unintended disadvantages while preserving regulatory intent.
The challenge, as both experts note, is not a lack of entrepreneurship but the structural environment in which it must operate. Singh warned that “the bigger question isn’t whether India has monopolies, it is whether small firms can scale without being forced into dependence. Competition policy, MSME reform, and ease of doing business must converge. Otherwise, India risks becoming a nation of startups but a market of few winners.”
Sridharan reinforced this, highlighting the practical hurdles of daily operations: “Regulatory compliance is frequent, fragmented, and often inconsistently applied. Infrastructure gaps, congestion, unpredictable service delivery, and local-level administrative friction continue to affect productivity. Ease of doing business cannot be credibly assessed without acknowledging these frictions.”
Meanwhile, India’s small businesses and startups face a landscape that is at once promising and demanding. With targeted reforms, differentiated compliance, better access to credit, and transparent market practices, the country could shift from being a place where small firms survive to one where they thrive and scale, both domestically and on the global stage. Until then, entrepreneurs must navigate a system that rewards preparation, patience, and persistence as much as product innovation. |
