Foreign Direct Investment, Private Equity Consolidation, And Cartelization In Indian Healthcare: A Study On Competition Law Gaps And Policy Imperatives
- IJLLR Journal
- Feb 18
- 1 min read
Mahesh K, Degree M Labs
Sreenidhi M, SASTRA Deemed University
ABSTRACT
Foreign direct investment (FDI) has transformed India’s hospital sector from mission-driven care providers into vertically integrated, investor-controlled healthcare conglomerates, generating unprecedented consolidation across hospitals, pharmaceuticals, devices, diagnostics, and insurance. This paper argues that the resulting private equity (PE)–driven ecosystems pose a distinct cartelization risk, as coordinated pricing and tacit collusion are engineered across the healthcare value chain through information signalling, standardized high-priced packages, talent-market practices, and insurance– hospital nexuses that existing Indian competition law is structurally ill- equipped to detect or deter. Crucially, many of these foreign PE firms maintain minimal or zero hospital ownership in their own home markets, preferentially channelling capital into India’s more liberal and less tightly regulated healthcare environment, thereby externalising risks that domestic regulators in their jurisdictions would not permit. Using sectoral FDI data, global cartel precedents, and recent Competition Commission of India (CCI) actions, the paper demonstrates how conventional tools focused on explicit agreements, narrow relevant market definitions, and single-sector scrutiny systematically miss ecosystem-level price-fixing and “killer acquisitions” in healthcare. It then proposes a regulatory roadmap including service-line– based merger guidelines, a tacit collusion detection framework, vertical integration audits, lowered merger thresholds, inter-regulatory coordination, FDI caps in critical care, data localization mandates, and enhanced transparency and public sector capacity, to restore competition and affordability while preserving beneficial foreign investment.
