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 April 29 , 2024

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Navigating the Indian Business Landscape: A Roadmap to Success

Doing business in India used to be challenging due to repetitive tasks, multiple touchpoints, strict capital ceilings, and harsh tax regulations, among other hurdles. However, with the introduction of EoDB 2.0 and significant business-friendly reforms that have broken through department silos and eased compliance, the situation has drastically improved. Now, the nation and its young entrepreneurs are well-positioned at the table to take advantage of these changes.

Key Initiatives Driving India’s Remarkable Progress

According to the World Bank’s Doing Business Report (DBR), India enhanced the regulatory landscape to support businesses’ launch and operation. As per the International Monetary Fund, India is the world’s 5th largest economy, with a Gross Domestic Product (GDP) of $4.1 Tn – driven by transformational business reforms, technological innovation, and entrepreneurship.

Efforts to Enhance the Ease of Doing Business in India

A fundamental aspect of India’s journey of reform has been the reduction of the compliance burden to foster a business-friendly environment. These reforms continue to benefit all entities, including startups, across various industries and sectors.

The key focus areas of these initiatives include:

  1. Simplifying procedures related to applications, renewals, inspections, filing records, etc.
  2. Rationalisation through the repeal, amendment, or consolidation of redundant laws.
  3. Promoting digitisation by creating online interfaces to replace manual forms and records.
  4. Decriminalising minor technical or procedural defaults.

With a specific emphasis on transparency and accountability, the government has introduced several significant initiatives:

  • The PAN (Permanent Account Number) as the common identifier for all regulatory clearances.
  • The decriminalisation of 3,400 legal provisions and reduction of 39,000 compliances to enhance the ease of doing business in India.
  • The registration of a business as a startup for 10 years since its inception, making it eligible for tax reductions for the entire tenure of the 10 years. This includes a 100% deduction on profits for startups incorporated before 1st April 2023, for three consecutive years within the 10-year period.
  • Inclusion of investments from non-residents within the ambit of taxation for startups, thereby enabling capital up to INR 10 Cr to benefit from tax remissions.

Promoting Innovation and Entrepreneurship

India’s innovation ecosystem has witnessed significant growth, as reflected in its rise to the 40th position in the Global Innovation Index 2023. Initiatives like the National Initiative for Developing and Harnessing Innovations (NIDHI) and the Technology Incubation and Development of Entrepreneurs (TIDE) scheme have provided vital support to startups and innovators, fostering a culture of innovation and entrepreneurship.

India’s Tax Reforms and Global Engagement

India’s tax reforms have focused on modernizing domestic tax practices and enhancing cross-border tax administration. Initiatives like the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme and Project Insight have supported exporters and improved tax administration, promoting exports, global trade, and foreign investments. India’s participation in international frameworks and agreements further demonstrates its commitment to global engagement and ESG compliance.

Simplification of Taxation through GST

The implementation of the Goods and Services Tax (GST) in July 2017 has been a game-changer, unifying various indirect taxes into a single streamlined tax system. This has not only reduced compliance costs for businesses but has also simplified the tax framework, enabling companies to invest more in their business development. The success of GST is evident from the substantial increase in GST collections, which stood at INR 1,68,337 crore in February 2024.

Startup India, Self-reliant India

India’s startup ecosystem has flourished, with 113 unicorns valued at $350 billion. Various schemes and initiatives, such as the Startup India Initiative and the Credit Guarantee Scheme for Startups, have provided crucial support to budding entrepreneurs. These reforms, coupled with tax exemptions and simplified compliance procedures, have created a conducive environment for startups to thrive.

India’s Growth Trajectory

In recent years, the Indian economy has seen remarkable growth. The influx of government policies for businesses in India has helped establish the nation’s macroeconomic stability in the global market. Reforms and investments aimed at unified growth from the grassroots to the upper echelons of financial institutions have democratized the business landscape. Easing restrictions on FDI by raising the foreign equity ceilings for defense and insurance has helped notch India’s ease of doing business rankings amidst global businesses.

Furthermore, in a recent amendment to the FDI policy, India has relaxed the regulations, allowing 100% FDI in manufacturing and procuring satellite systems. The reform is set to attract FDI, enhance the nation’s EoDB, and expand income and employment in the space sector. 

With enhanced governance, business-friendly policies, and empowered entrepreneurs, the stage is set for an exciting growth-fueled future.

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