EASE OF DOING BUSINESS IN INDIA: OUTLOOK IN 2024

India is witnessing a remarkable transformation over the past decade, mainly driven by the government’s commitment to creating a conducive business environment. So, how does it look in 2024? A wide array of initiatives and reforms continue to streamline business operations, attract foreign investments, and foster domestic entrepreneurship. This blog further sheds light on key reforms, insights, and opportunities shaping the ease of doing business in India in 2024, offering a comprehensive outlook for businesses and investors worldwide.

The Evolution of Ease of Doing Business in India

India’s tryst with improving the ease of doing business began in earnest in 2014. Back then, the country ranked a dismal 142nd on the World Bank’s Ease of Doing Business Index. Over the years, reforms in starting a business, resolving insolvency, paying taxes, and trading across borders propelled India to the 63rd position by 2019.

However, with the World Bank discontinuing its Doing Business Report in 2021, India has shifted its focus to internal metrics and sector-specific reforms. The emphasis has been on creating a robust ecosystem that supports businesses across sectors, regardless of their scale or geographic location.

India’s Initiatives and Reforms in 2024

In 2024, India has doubled down on its efforts to enhance ease of doing business. Recognizing the need to address contemporary challenges and remain competitive in the global market, the government and various state agencies have rolled out several initiatives.

1. Business Reforms Action Plan (BRAP) 2024

The cornerstone of India’s ease-of-doing-business strategy is the Business Reforms Action Plan (BRAP) 2024. Spearheaded by the Department for Promotion of Industry and Internal Trade (DPIIT), this initiative introduces next-generation reforms designed to make the regulatory environment more transparent and efficient. BRAP 2024 focuses on:

• Streamlining compliance: Simplifying business processes and reducing the compliance burden on companies.
   
• Decriminalizing minor offenses: Shifting away from punitive measures to a more business-friendly regulatory framework.
   
• Integrating digital solutions: Leveraging technology for faster approvals, inspections, and grievance redressal.

Moreover, BRAP aligns with global best practices and includes elements from the World Bank’s B-READY program, ensuring Indian reforms remain globally competitive.

2. State-Level Reforms and Competition

States in India play a pivotal role in shaping the business ecosystem. Recognizing this, the government has encouraged healthy competition among states to implement pro-business policies. Maharashtra, for instance, leads in attracting Foreign Direct Investment (FDI), contributing 31% of the total FDI inflow in India in 2024. This success is attributed to:

• Investment-friendly policies
• Rapid digitization of land records
• Streamlined approval processes for construction and industrial projects

Other states like Gujarat, Karnataka, and Tamil Nadu have also adopted innovative measures to enhance the ease of doing business, making India a hub for both domestic and global enterprises.

3. Sector-Specific Reforms

To address the unique challenges faced by different industries, the government has introduced sector-specific reforms. For example:

• Telecommunications: In 2024, efforts to harmonize Right of Way (RoW) policies across states and streamline spectrum allocation have significantly reduced entry barriers for telecom players.
   
• Manufacturing: The Production Linked Incentive (PLI) schemes continue to attract investments in key sectors like electronics, pharmaceuticals, and textiles.
   
• Startups: India has maintained its position as a global startup hub, with initiatives like faster incorporation timelines, access to government funds, and simplified tax structures.

4. Reducing the Compliance Burden

Reducing bureaucratic hurdles has been a major priority in 2024. Over 39,000 compliance requirements have been removed or simplified since 2021, a trend that continues this year. Key achievements include:

• The digitization of tax filings and GST processes.
• Unified platforms for obtaining approvals, licenses, and certifications.
• Auto-renewals for various permits, reducing manual intervention.

These measures have significantly improved India’s business-friendly image, fostering an environment conducive to entrepreneurship.

Economic Outlook for 2024

The Indian economy is poised for robust growth in 2024. According to the Economic Survey 2023–24, India’s real GDP is projected to grow by 6.5–7%, driven by several factors:

Easing of global inflationary pressures with inflation moderating, businesses have greater access to cost-effective resources. Structural reforms like the Goods and Services Tax (GST) and the Insolvency and Bankruptcy Code (IBC) have laid a strong foundation for business operations. Export growth in sectors such as IT services, pharmaceuticals, and renewable energy continue to see an uptick in global demand. The private sector, too, is stepping up, with improved balance sheets and increased capital expenditure on innovation and expansion.

India’s Infrastructure Push

Infrastructure is a critical enabler of ease of doing business. In 2024, India is witnessing unprecedented investments in infrastructure development:

• Transport and Logistics: Projects like the National Infrastructure Pipeline (NIP) and the expansion of the Dedicated Freight Corridors (DFC) aim to reduce logistics costs and improve supply chain efficiency.
   
• Digital Infrastructure: India’s emphasis on digital transformation, including initiatives like 5G rollout and BharatNet, ensures seamless connectivity for businesses across urban and rural areas.

These infrastructure advancements are expected to lower costs, reduce delays, and improve productivity for businesses operating in India.
 

Startups and Innovation: India’s Success Story

India’s startup ecosystem is a major contributor to the ease of doing business. With over 100 unicorns as of 2024, the country ranks among the top three global startup hubs. Key drivers include:

Government programs like Startup India and state-level initiatives provide funding, mentorship, and tax benefits to budding entrepreneurs. India’s venture capital ecosystem remains robust, with significant investments in sectors like fintech, health tech, and edtech. India’s young and skilled workforce continues to attract global tech companies and startups alike.

Challenges to Address

Despite the progress, challenges remain in achieving seamless ease of doing business:

1. Regulatory Complexity

While reforms have streamlined many processes, businesses still face complexities in areas like land acquisition and labor laws. Continuous efforts are needed to harmonize policies across states.

2. Infrastructure Gaps

While significant progress has been made, gaps persist in areas like urban infrastructure and power supply, which can hinder business operations in some regions.

3. Workforce Readiness

India’s large population is a double-edged sword. While it offers an abundant labor pool, skill gaps in certain industries require urgent attention. Investment in education and vocational training is crucial to bridge this gap.

India’s Vision for the Future

The government’s vision of a “Viksit Bharat” (Developed India) by 2047 underpins the reforms being implemented today. This vision includes:

• Achieving a $5 trillion economy in the near term.
• Becoming a global manufacturing hub.
• Fostering sustainable and inclusive growth.

India’s proactive policies and emphasis on innovation make it a compelling destination for businesses seeking long-term growth.

India’s ease-of-doing-business journey is a testament to its commitment to fostering economic growth and resilience. The initiatives introduced in 2024 demonstrate a deep understanding of the challenges businesses face and a proactive approach to addressing them.

As the country positions itself as a global business powerhouse, collaboration between the government, industry stakeholders, and entrepreneurs will be crucial. By leveraging its demographic dividend, technological prowess, and policy reforms, India is poised to unlock its full economic potential, achieving the vision of a “Viksit Bharat” and becoming a preferred destination for global investments.

Whether you are a multinational corporation, a domestic entrepreneur, or a startup, India in 2024 offers immense opportunities for growth, innovation, and success. With the government’s continued focus on enhancing ease of doing business, the future of India’s business ecosystem looks brighter than ever.

If you are looking for comprehensive business solutions to achieve the India entry goal, contact our experts at Narayan Bhargava Group.