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India has positioned itself as a desired destination for investment and trade
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SME Times News Bureau | 07 Apr, 2021
India has already positioned itself and continues to enhance its
attractiveness as a desired destination for investment and trade,
according to the Doing Business in India report.
Whilst its
expanding levels of intellectual capital and large English-speaking
population are likely to make it a global hub for services, high levels
of domestic consumption coupled with significant cost competitiveness,
along with a global demand of shift in supply chain outside of China,
makes India an ever attractive destination for investments in services
and manufacturing, the report said.
"Modi government's policies
of smart cities, Digital India, single window policy have given the
correct signals to all. Also the government's mantra of "ease of doing
business" has brought about many reforms which will work towards
changing the perception about doing business in India," it added.
The
testimony of which is an ever improving rank of India in the annual
World Bank's ease of doing business report. More and more ministries are
moving towards online access for granting licenses/ approvals/
registrations/ reporting etc. and single window clearance.
The
report said that while corruption still exists, the continued
enhancement and expansion of digitisation and computerisation of
numerous public bodies has led to an increased level of efficiency and
institutions such as the RBI and SEBI have become increasingly proactive
and professional in dealing with foreign investment into India.
Furthermore,
some state governments have taken proactive steps to improve efficiency
in public offices such as the RoC. "While caution exercised by them may
seem draconian; it has helped India tremendously in avoiding any major
internal impact of the ongoing financial crisis," it added.
India's
middle class, its prime consumer market and responsible for over half
of Indian economy's GDP in the form of private spending, is estimated to
cross 250 million in number. Furthermore, India's population remains
largely of working age and relatively young, unlike China, which with
its 'one-child' policy has resulted in a smaller working population
supporting a growing number of retirees.
The report identified
that some aspects of the legal system in India continued to be archaic.
For example, the labour laws until the enacted of consolidating codes
found their origin in the British laws of the early 20th century and
have since undergone only minor amendments, even though the same laws in
Britain have changed significantly.
"As a result, sectors such
as manufacturing have been dogged by strikes and lock-outs.
Additionally, it is very difficult to terminate the services of
blue-collared employees in India due to extensive protections under
various laws. India's import policies, despite the recent relaxations,
continue to remain unfriendly with very high import duties charged on
many imported goods. India's tax and corporate laws are complex," the
report said.
Nisha Biswal President of the US-India Business
Council and Senior Vice President for South Asia at the US Chamber of
Commerce said that as leaders around the globe reassess their approach
to global trade and investment and recover from disrupted supply chains,
both nations have the capacity to catalyse areas of growth to achieve
the shared goal of $500 billion in two-way trade.
This will
require a strategic look at market-based reforms, deeper cooperation in
research and development and a dynamic assessment of key sectors that
need a targeted boost within the bilateral economic relationship, she
added.
"I congratulate Nishith Desai Associates and Sannam S4
for taking the initiative to author the 'Doing Business in India'
report. Investment guides like the 'Doing Business in India' are
excellent resources for businesses that are evaluating India as a viable
option and are critical towards the achievement of the $500 billion
goal in two-way trade," she said.
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