Firms always look for related lines of business, and profitable partnerships. This leads to a bundling of products and exclusive contracts. Sometimes, this raises concerns about unfair trade practices. Improving competitive conditions in the markets is a key objective for the government. There are a few situations where forcing a separation between two industries is the cleanest way to achieve more competition. This is the economic principle underlying net neutrality, where the government seeks to keep the content business separate from the pipes business.Economies of scope are about utilising a customer relationship to sell an adjacent product, and about the reduced cost of producing an adjacent product. As an example, IndiGo has a deal with Business Standard through which a tabloid version of the newspaper is provided to each passenger; this contract benefits both.When governments prevent a firm from doing adjacent things, they are generally in the wrong. As an example, the Indian fi

Ajay Shah: Forced unbundling for greater competition

Business Standard

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Ajay Shah: Prioritise banking reforms

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The spectacle of young men and women imbued with a get-rich-quick ethos and dreams of laziness is disturbing

Ajay Shah: India's start-ups are lazy businesses

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The Budget has failed to build an atmosphere of tangible optimism

Ajay Shah: Nothing exceptional at all

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While the Indian stock market processes information about individual firms well, it struggles with macro-level forecasting

Stopping India's economic landscape from being littered with zombie firms is essential for recovery

Ajay Shah: Preventing a zombie economy

Low nominal growth exacerbates the debt dynamics for public finance and for private firms

Ajay Shah