Like honestly, I've been thinking about this for some time.
Mahi wants to take part in the competition and Kunj doesn't want Twinkle to. There is a very simple solution to this. Let Twinkle train Mahi.
This way Twinkle isn't directly taking part in the competition but she is still a part of it. Moreover, because she has been involved in these competitions before, she knows how they work inside and out. She has so many connections with the pageant and she can train Mahi so well!
And to be honest, Mahi is hella pretty! I truly feel that all Mahi needs is some confidence in herself in terms of her body. I feel that is the only area where she is insecure about. Especially after the whole acid attack. This will be the perfect way for her to gain some confidence and self-respect again.
We know she's determined and stubborn (like Twinkle) and she will do anything to win this competition. Moreover, Mahi will be doing this for Yuvi, which will make her want to win at any cost.
As for Twinkle, Kunj doesn't want her to participate. Fine, she won't. She wants Mahi to win though. By going against her as a competitor, that's not really going to fix things between them. The best way would be to guide her, like a trainer and a sister. They can bond really well over this.
Moreover, Kunj will be happy because he wouldn't have to deal with men ogling at Twinkle in a bad way. Plus, if the two sisters bond well over this event, then he won't have to deal with Twinkle constantly trying to hurt herself for Mahi.
Just.. CVs, please do something new and brilliant with this track.