Why it’s easier doing business in India

India has been one of the fastest growing economies for decades and has been a favoured business destination for large multinational corporations. Many of these, even after having set up their businesses in India, have often complained about the difficulty of doing business here due to the statutory and regulatory set-up.

The demand for reforming statute and regulation to ease doing business has been growing since the very beginning of globalization in India. Up until 2015, India was ranked 142 out of a total of 190 nations. In the past five years, India has worked on easing its regulatory infrastructure, reducing unnecessary compliance, digitalization, and reducing human interfaces and processes. As reported in the 2019 edition of the World Bank study on ease of doing business, India is now ranked 77 out of 190 nations.

India’s government has taken various steps to ease doing business. There were several major amendments to the Companies Act, 2013, and Insolvency and Bankruptcy Code, 2016, which resulted in faster and more convenient incorporations and better contract enforcement, respectively. Further liberalization in foreign direct investment (FDI) policy, and allowing 100% foreign investment in many sectors through an automatic route, were key for such growth, while for some sectors there is still a cap and investment limits under the automatic and the approval routes.

Ravi Singhania is the managing partner and Rudra Srivastava is an associate partner at Singhania & Partners