Asian Paints’ anti-competitive allegations raise questions on brand trust, open doors for competitors

Asian Paints, the undisputed leader in India’s Rs 70,000 crore decorative paints industry, finds itself at the center of a reputational storm, with fresh allegations of anti-competitive practices under investigation by the Competition Commission of India (CCI). While the probe has yet to reach a conclusion, industry voices are divided on whether the controversy could dent the legacy brand’s image, or if its deep-rooted trust and distribution strength will shield it from lasting damage.

Asian Paints commands nearly 50% of the decorative paint market. It enjoys near-universal brand recognition, strong recall, and robust goodwill built over decades of innovation, consistent quality, and wide distribution.

Yet, as Rituparna Basu, Professor of Marketing at IMI Kolkata, points out, “Brand trust, while built over time, can be fragile. A single act perceived as anti-competitive, especially one that contradicts modern expectations of corporate responsibility and fair play, can sow doubt—particularly among B2B stakeholders.”

Read more: Birla Opus vs. Asian Paints: Paint wars intensify as CCI set to probe market practices

The allegations—of restricting dealers from stocking rival brands—mirror similar concerns raised earlier in a dismissed case filed by JSW Paints in 2022. This time, however, the scrutiny is sharper amid Asian Paints’ recent softening financials and the rise of serious contenders like Birla Opus.

With over 53% of the country’s installed paint manufacturing capacity and a distribution muscle spanning more than 74,000 dealers and 1.6 lakh touchpoints, Asian Paints is alleged to have threatened to reduce dealer credit limits and cancel contracts if they stocked or sold Birla Opus products.

Despite the media attention, experts agree the average consumer may remain largely unaffected in the short term. “End-users still associate Asian Paints with quality and home transformation,” says Samit Sinha of Alchemist Brand Consulting. “In this category, decisions are often guided by painters, contractors, and designers—many of whom are deeply tied to the Asian Paints ecosystem.”

However, that very ecosystem—dealers, influencers, and institutional clients—could feel the heat if the CCI rules against the company. “Restricting trade partners from fair market access strikes at the foundation of trust,” says Harsh Pamnani, brand storyteller and consultant. “In today’s environment, legacy alone won’t suffice. Brands need humility, transparency, and action.”

Risk of Market Share Churn

Despite short-term turbulence, India’s decorative paint market continues to grow at a CAGR of 10–12%, driven by rising disposable incomes, housing demand, rural penetration, and premiumization.

Many dealers continue to rely heavily on Asian Paints for credit support, promotional backing, and consistent sales volume. While some may begin to diversify their inventory, most are likely to adopt a wait-and-watch approach before making major shifts.

While an overnight shift in market leadership is unlikely, the current controversy creates room for competitors like JSW Paints and Birla Opus to gain ground. Birla Opus, backed by the Aditya Birla Group, has already captured over 7% of the market by 2025—a remarkable feat for a new entrant.

Read more: Asian Paints trims ad spend by 0.68% to Rs 1,297 crore in FY25, amid market challenges

Dealers, though historically loyal to Asian Paints for credit support, sales consistency, and promotional backing, may gradually diversify inventories if confidence dips. Real estate developers, procurement agencies, and institutional buyers could also explore alternatives in a bid to mitigate risk, say experts.

“Unless proven, these are allegations. But competitors could leverage the uncertainty to reposition themselves as ethical, transparent, and dealer-friendly,” notes Reena Mehta of K J Somaiya Institute of Management. “Still, the scale, infrastructure, and dealer loyalty Asian Paints commands is not easily replicated.”

To manage this reputational flashpoint, Asian Paints must act on multiple fronts, say industry observers, including launch a transparent communication campaign led by senior leadership that reiterates its commitment to ethical governance and legal compliance. Acknowledge concerns, show accountability, and position the company as a responsible leader.

"Rather than projecting market dominance, the brand should lean into its legacy of partnerships. For over 75 years, Asian Paints has grown alongside thousands of dealers, painters, contractors, and homeowners. It's time to make them the heroes of the story. A national campaign that highlights these voices: how a painter built a career, how a small-town dealer became a community hub, how families made homes beautiful, can help reframe the brand from a giant to a trusted enabler," sums up Pamnani.

In terms of financial performance, Asian Paints reported a significant decline in both revenue and profit for FY25. Consolidated net sales were down 4.5% to ₹33,797 crore, while net profit (excluding exceptional items) saw a 26.7% drop. The Q4 results were particularly impacted, with a 45% year-on-year decline in net profit.

While the recent financial position in the last quarter has shown a decrease in the sales and profitability of Asian Paints, the company should continue focusing on its strengths: its legacy, consumer satisfaction, and innovation, suggests Mehta.

"The strong foundation and trust it enjoys among customers and dealers will support its brand positioning. By reinforcing its proven track record, market leadership, and product quality in its messaging, Asian Paints can effectively manage these challenges."

According to a brand manager in the same industry, it is the quality of the product and the distribution network that Asian Paints has built which drives brand loyalty. As of now, distributors’ loyalty remains with Asian Paints.

If CCI moves ahead with a formal investigation, it would mark a significant moment in India’s paints sector, spotlighting long-standing concerns around distribution control, channel exclusivity, and dominance in traditional industries facing disruption from new players.