A concentration problem: Policymakers should support markets, not champions

India's conscious decision to return to industrial policy and state-guided investment has had the inevitable consequence of empowering the largest conglomerates

It has long been understood that one of the malign consequences of tariff walls, combined with domestic subsidies for industry through focused “industrial policy,” is the growth of entrenched industrial conglomerates. Indian policymakers should have understood this better than most, given that this was part of the country’s economic history after independence. It was not until the 1990s that liberalisation created some churning in the economy. There are worrying signs, however, that in the most recent phase of the Indian economy, aspects of this post-liberalisation trend have begun to be reversed. As economist Ajay Chhibber has pointed out in these