The paper evaluates the effects of deregulation on the performance and structure of the Indian cement industry. The implementation of the deregulation process is complex and varied. Therefore, the paper focuses on the impact of liberalization on the growth and structure of the cement industry, where structure is primarily being captured by concentration. The Herfindhal index and four firm concentration ratio both indicate that after liberalization concentration has been decreased indicating increased competitiveness. However, this trend was reversed later primarily due to acquisition of capacities by larger firms. A quartile-wise analysis revealed that while companies in the top two quartiles gained market share, the companies in the lower quartiles lost market share during the period under study. Chow and Cusumsq test confirms that there has been a structural break in the market share pattern for many companies. The models used to test the hypothesis extend beyond the previous research by including new datasets and by expanding the cross-section and time series dimensions of analysis.

Industrial organizations in the context of a developing nation, raise issues and concerns, which are frequently distinct from those in industrialized nations. In India, more emphasis was on models of oligopoly and comparative studies of firms paying little attention to the fact that what matters the most in the Indian context is not the strategic association between the firm, but strategic association between the firm and the government.

Few will dispute the statement that the economics of industry is an under researched area in India. There are not many comprehensive studies of major individual industries. Also, the existing published studies have not, in general, focused on the entire spectrum, i.e., from the period of total regulation to the period of total decontrol.The cement industry is selected for research due to several important reasons. Cement is a basic core product, essential for building our nation and its growth is intrinsically linked to the overall growth of the economy and more importantly to the growth of the infrastructure sector. For India to sustain its GDP growth rate, the infrastructure sector has to keep its growth momentum. The lack of adequate roads, ports, power, and other infrastructure could prove to be a big hindrance to the rapid growth of the country. As cement is a key ingredient for supporting any modern infrastructure, this research will have significant relevance for the infrastructure sector.

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