Abstract Competition is a situation in the market in which firms or sellers independently strive for the buyers patronage in order to achieve a particular business objective, for example, profits, sales or market share. It is an open market rivalry in which every seller tries to get what other sellers are seeking at the same time - sales, profit, and market share by offering the best practicable combination of price, quality, and service. Corporate governance is important, which empower corporate to accommodate to the intensified pace of competition thrown by the rapid moment of globalization, survive and grow in a systematic and sustained manner. Corporate governance is not only about regulatory frame work, but creates and charges with a task of constituting conducive environment of trust and confidence among various stakeholders. Thus, this paper would make a deep study with the help of various cases throughout the world to learn how the perspective of corporate governance should be inherent while framing competition laws. To promote healthy market competition, the public policy has to evoke two things: competition law and corporate governance. Competition policy and corporate governance are introduced as a necessary step to take en route to developed nation status. While such policy changes have been brought about cautiously, there has also been a fair degree of disciplining imposed given the tough reality of the economic circumstance being currently faced. This paper will analyze the current competition law of India and also make various recommendations to it that will enhance the fair market status through the principles of corporate governance. The aim is show that how the competition in the product market can act as an externality to the corporate governance, and act as a check on the exercise Manager's discretionary power. There is no doubt that there is a perfect linkage between the internal governance mechanism and the performance of a corporation. But it has to be remembered at the same time that the external governance mechanisms including competition, as also of vital importance, though there has been a very little attention given to the interaction between internal and external governance mechanism in emerging market economies. Here the paper has tried to show the independent and interaction effect of ownership and competition variable on firm level productivity.