Market coupling: A premature reform hijacked by pvt interests

THE CENTRAL ELECTRICITY Regulatory | Commission's (CERC) order to push ahead with market coupling from Jan 2026 isnot just ill-timed — itis deeply questionable.

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A series of recent regulatory actions suggests that private interests are steering policy away from public welfare.

The proposed PMR amendments tilt the market toward opaque OTC trading by relaxing prudential norms and enabling quasi-exchange operations without equivalent oversight. More troubling, the recent SEBI’s interim order dated 15th Oct 2025 exposing insider trading worth %173 crore stemming from leaks within CERC’s Economics Division to OTC platform promoters has gravely undermined confidence in regulatory integrity.

These developments are compounded by CERC’s own procedural deviations in issuing the Suo-moto coupling order without stakeholder consultation despite many submissions, not disclosing Grid-India’s shadow pilot report,and relying on a cherry-picked short-duration dataset while disregarding a comprehensive long-duration analysis. Most concerning is CERC’s policy reversal—after declaring that coupling offered no material benefit, it abruptly approved the same mechanism without any structural market change. The timing of this reversal, coinciding with the insider-trading scandal and around 30% fall in one of the power exchange’s share prices, strongly indicates that market coupling is being driven by private gain rather than public purpose and all three actions are aligned to serve the overarching objectives of OTC platform operators.

Therefore, the proposal of market coupling demands immediate scrutiny and accountability before implementation due to the following reasons:

Substantive issues:

Weak economic case and technical fragility

Limited market depth and negligible welfare gains