What are the Reasons for Doing Business in India?

What are the Reasons for Doing Business in India?

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What are the Reasons for Doing Business in India?
What are the Reasons for Doing Business in India?


According to economic historian Angus Maddison in his book ‘The World Economy: A Millennial Perspective’ India was the richest country in the world and the world’s largest economy until 16th century A.D.

The history of business starts from the Indus valley civilisation, the ancient and medieval Era, the Mughal empire and the British rule. The economic historians have blamed the Colonial rule for poor state of India’s economy and investment in Indian industries was Limited since it was a Colony. After independence the socialist reforms, liberalization and the present reforms of BJP government has led to the change in the scenario.

Whatever the political war maybe but things have changed since the stable government from 2014 and will be justified by looking at the foreign investors’ confidence in Indian economy and influx of FDI into India. Some key stats show-

  • The IMF Expectations of economy to extend up to 7.6 % in 2016 to 2017 from its projection of 7. 4% the economy growth of 7.6% in 2015 to 2016 is a big achievement for India says IMF
  • The FDI is showing a big turnaround in business it was 4612 USD million in September 2016 while until 2016 it was just averaging 120 3.96 USD million.
  • India advanced to GDP of 7.3 %. Expectations to reach 7.5 % in the year 2016.

The ease of doing business can be analysed through EDBI (ease of doing business index).It is a ranking system established by World Bank Group. 189 countries are ranked on the basis of 10 areas which are starting a business, construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contractsand resolving insolvency.

INDIA’s rank standsas 131 in 2016 from 134 in 2015 and expected to be 130 in 2017. The ranks for individual areas are as follows in the year 2016 and the actions which make it better for doing business.

Starting a business

The rank is 151. The new action is elimination of common seal and establishment of Form 29 which clubs the Name availability, incorporation of company and DIN no. This makes the registration of company in 1 to 2 days. The digitalisation ofPAN and TAN. The online working ofESIC and EPFO.

Construction permits

The rank is 184 which is poor but some actions have been taken like fast track approval system by Municipal Corporation and common application forms for construction permit. The digitalized and online scrutiny makes it better for businesses.

Trading across borders

The rank is 144 the valuable action is making of single window for Excise and Customs. The documents have been reduced to just 3 which makes it a little quick. It involves bill of landing invoice and import declaration.

Enforcing contracts

The rank is 178 which is poor and needs upgradation. Commercial division and appellate division has been made for quick disposal of cases and enforcing them. National judicial data grid has been prepared. Public contract dispute resolution tribunals have been made.

Getting electricity

India ranks 51 in this list which is quite high than the other parameters. It takes 15 days to get proper connection and with online application it is quite easy and fast now.

Paying taxes

It stands 172 in the list but after ESIC paying taxes is easy now. Electronic returns can be made with key verification system the field of tax becomes easy.

Registering property

India ranks 140 in the list and with registration offices being digitalized it is quite easy now to register property with this the transparency also increases which is better for the business environment

Getting credit

The rank stands 42 which is quite impressive in comparison to the economic condition of the country. The make in India and digital India encourages and eases getting credit for various entrepreneur setups. The Mudra Yojana by the government for small scale industries shows the strategies and policies for getting credit.

Protecting minority investors

The rank shows the situation that India is far better in the parameter with the rank 10.

Resolving insolvency

The rank stands at 135 but with the new code of insolvency and bankruptcy in 2016 will lift the rank up.

Some other points.

– The BCG ranked India 2nd most cost competent country.

– India is World’s largest democracy inhabiting 1.2 billion people across its length and breadth

– Large area with great opportunities: It has a total Land Area of 3.288 million km² and a large size and is ranked 7 in terms of land area in the world.

-Land of abundant natural resources and diverse climatic conditions. It has major reserves of a. Natural Gas –1,437 billion cubic metres (50.7×1012 cu ft.) b. Oil – 125 Million metric tonne c. Copper Ore – 1.56 billion tonnes of Copper ore d. Iron Ore – 27 billion tonnes e. Chromite – 200 million tonnes of resource f. Nuclear Reserves:  Thorium – 11.93 million tonnes ii. Uranium – Upcoming mine in Tumalapalli has close to 49,000 tonne of uranium reserves

-India has a Total labour force of nearly 530 million. India is having a competent educated population with different knowledge and know how.

-India is having a good mobile and internet connectivity. The transport connectivity has also improved with flawless roads and air and water connectivity too.

-India is having a population with more percentage of people between 18 to 50 which is the working age. For business trading techniques and tricks, checkout engulfing candlestick strategy.

Some of the related articles:

  1. How To Start Business?
  4. Registration of Sole proprietorship
  5. Registration process of LLP
  6. One Person Company (OPC)

Author: This blog is written by Mr. Abhiroop Chakravarty, a passionate blogger of Aapka Consultant.


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