Competition Commission of India Finds Bid Rigging in Defence Textile Procurement; Issues Cease-and-Desist

On 2 January 2026, the Competition Commission of India (CCI) passed a final order[1] pursuant to a complaint filed by the Directorate General of Ordnance Services (DGOS) concerning procurement of woolen underpants for defence purposes. The CCI found M/s KKK Mills and M/s Sankeshwar Synthetics Pvt. Ltd. (collectively, OPs) to have engaged in bid rigging in contravention of Section 3 of the Competition Act, 2002 (Competition Act).

The proceedings were initiated after it was observed that both OPs had quoted identical rates and submitted bids within close proximity of time in two separate tenders. The bids reflected parallel pricing patterns, raising concerns of collusive conduct. The CCI reiterated that price parallelism alone is not sufficient to establish collusive bidding. However, where such parallel conduct is accompanied by surrounding circumstances or “plus factors” indicating coordination or a meeting of minds, an inference of anti-competitive agreement may be drawn. On the facts of the case, the CCI concluded that the identical pricing and surrounding circumstances demonstrated coordination between the OPs.

In addition to holding the entities liable, the CCI found the partner of M/s KKK Mills and the director of M/s Sankeshwar Synthetics Pvt. Ltd. responsible for their active involvement in the contravention, thereby attracting individual liability under Section 48. The OPs contended that since the procurement related to a government defence department, their conduct was exempt from scrutiny under the Competition Act. The CCI rejected this argument, clarifying that enterprises operating in a competitive market environment cannot claim immunity merely because the buyer is a government department. However, considering the merits of the OPs’ plea that the imposition of monetary penalties would cause financial distress and potential bankruptcy, the CCI refrained from imposing such penalties. Instead, it issued a cease-and-desist order, cautioning that any recurrence would be treated as a repeat contravention, attracting stricter consequences.

This approach is consistent with a broader trend in the CCI’s recent orders,[2] where the status of enterprises as micro, small, and medium enterprises (MSMEs), coupled with evidence of financial distress, has been treated as a mitigating factor in determining penalties. This reflects a balanced enforcement approach that upholds competition law while also recognising practical commercial realities.

Business Takeaway: The decision highlights the risk of personal liability for directors and key managerial personnel involved in anti-competitive conduct.The order also clarifies that participation in government procurement does not provide blanket immunity from competition law scrutiny.

[1] CCI: In Re: CP Cell, Master General of Ordnance Service and M/s KKK Mills & Anr., Case No. 01 of 2021, order dated 2 January 2026.

[2] CCI: In Re: Food Corporation of India and Shivalik Agro Poly Products Ltd. & Ors., Ref. Case No. 07 of 2018, order dated 29 October 2021; CCI: In Re: Chief Materials Manager, South Eastern Railway and Hindustan Composites Limited & Ors., Ref. Case No. 03 of 2016, order dated 10 July 2020; CCI: In Re: Mr. Rakesh Khare and Krishna Engineering Works & Ors., Ref. Case No. 02 of 2020, order dated 11 October 2022; CCI: In Re: Mr. Rizwanul Haq Khan and Mersen (India) Pvt. Ltd. & Ors., Ref. Case No. 02 of 2016, order dated 1 November 2021.