Way of doing business in Indian states: Regional guide to business in India

The Government has made a lot of initiatives to ease foreign investment in India and make it simpler for international companies to enter the Indian market as can be seen in this year’s “Ease of doing business” rankings by World Bank. The Ease of doing business in India has jumped 23 places to 77the position in the 2019 survey. India is the only country to have made it to the list of top 10 improvers for the second consecutive year which proves the remarkable efforts to support foreign investment in the country.

Across the country, the way of doing business in Indian states vary due to the large size of the country, different customs & traditions, economic growth, demographics, differing governance and many other factors. Interestingly, the improvement in the ease of doing business in India is seen across all the regions. Proven by the 2018 World Bank survey, among the top states for ease of doing business in India, the southern state of Andhra Pradesh ranked first followed by neighbouring Telangana. The third position was however held by the northern state Haryana followed by eastern state Jharkhand and then the western state of Gujarat. The ranking continues with the central states of Chhattisgarh and Madhya Pradesh. So however different the way of doing business in India is across the regions, we see positive initiatives to reduce bureaucracy across the country.

Interestingly, the ease of doing business in Indian states rankings by World Bank do not match the investment potential in Indian states by India’s National Council of Applied Economic Research (NCAER) 2018 report. The Investment Potential Index report used a different set of criteria and records Delhi as having the most investment potential in India – specifically for infrastructure and economic conditions. The index started in 2016 to provide a trustworthy guide to investments and doing business in Indian states and regions in terms of competitiveness, growth opportunities and economic governance. Tamil Nadu stood second, whereas Gujarat dropped from 1st place (in 2017) to 3rd place. Haryana is the only state to show the similar placing and potential on both the World Bank and NCAER coming 4th in the investment potential in India ranking.

Taken together the two rankings reflect a positive trend in India as an investment destination: doing business in India is becoming easier and data is becoming more available and more comparable. There is still a long way to go as many business experts report that this wider improved governance and government reforms is yet to reflect on the ground.

Maier+Vidorno is an expert in doing business in India and has assisted more than 1500 companies enter the Indian market and successfully sell in India. Our pragmatic solutions are designed so that your team can focus of selling while M+V takes care of all your bureaucratic needs.

M+V’s India experts have developed a simple guide for investors looking at investment in different states of India. The detailed guide could be downloaded here.

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