The unprecedented 30-place jump made by India in the World Bank’s Ease of Doing Business (EODB) rankings, from 130 to 100, is an encouraging step in the right direction for businesses in India.
There is no doubt that there are tremendous opportunities for UK businesses of all sizes and complexions in India, both now and into the foreseeable future.
More than any other country, UK businesses are taking advantage of the investment opportunities in India.
The UK and its economy benefits considerably from India. UK companies engaged in India garner increased exposure and earnings, and generate direct benefits such as enhanced reverse innovation and technology flows and increased exports. They also improve the competitiveness of the wider UK corporate sector.
UK businesses can succeed in India right now. Our experience is that those UK companies that engage with India are likely to establish a presence there and increase investment, and that those companies that are already in India are likely to expand further within the subcontinent. Operationally, larger companies have the expertise and capacity to navigate the evolving operating environment, smaller businesses need targeted help and advice. It is therefore critical to give SMEs the support and guidance they need to navigate their way to the undoubted opportunities in India.
A few UK businesses, particularly those exposed to growing consumer sectors, described the difficulty they faced when importing goods into India, especially with respect to labelling issues, requirements to settle pricing early in the process, and payment of import duties. Products can be held in customs for lengthy periods and can then be rejected arbitrarily, forcing companies to absorb extra costs. This issue is often due to confusion around classification and a lack of understanding by customs officials of product categories.
The steps taken by the government to improve India’s business environment since taking office in 2014 have, according to our respondents, delivered steady improvement and created optimism for more. This report suggests that UK businesses appreciate the Government’s efforts to improve the ease of doing business and recognise that the effects of the economic policies and reforms will take time to translate into tangible benefits.
Given that the UK is the largest G20 investor in India, UK businesses are clearly enthusiastic about the opportunities in India and would consider investing more, and more quickly,
if government – both in States and at the Centre – delivered further reform.
More consistent bureaucratic processes, applied systematically across India, would enable UK businesses to embark on ventures in India with confidence. Expansion of e-governance schemes within India will create a simpler, faster bureaucracy with which UK companies can do business.
Finally, more flexibility with government procurement initiatives and contracts, and a more efficient application of single window clearance systems, would go a long way to increase confidence in India as an investment destination into the future.
To download the full report please go here