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Monday, April 22, 2024

Notwithstanding Ease of Doing Business ranking, Bharat must quickly resolve issues that plague investors

Even as Bharat improved its ranking on the World Banks Ease of Doing Business list and put in place the Production Linked Incentive (PLI) Scheme, it needs to focus on removing ground level bottlenecks as several foreign investors and companies look for diversification and de-risking exercise amid the changing geopolitics.

While Bharat’s overall rank improved significantly from 142 in 2014 to 63 in 2020, doing business in Bharat still is still fraught with handicaps that need to be addressed jointly by the Centre and states

Consider this. There are about 750 Korean companies operating in Bharat. But the number is about 7000 in Vietnam.

South Korea’s Ambassador to Bharat Shin Bongkil last year said that Korean companies are keen to invest in Bharat but problems need to be resolved further.

Bongkil said that carrying out economic activities in Vietnam is far easier compared to Bharat. The country has also been offering a host of incentives to companies with a view to woo investors.

Amid changing geopolitical and geo-economic contours, several other Asian countries including Vietnam have started offering huge incentives to companies wishing to set up factories.

“Doing business or even setting up one is cumbersome on the ground level. Issues relating to customs clearances in case of imported raw material or even finished products remain. The situation has become more tedious in recent times as the mandatory requirement of certificates of country of origin are scrutinised with a fine tooth comb and even if there are no gaps, most businessmen find it difficult to navigate through the process,” a person familiar with the process told India Narrative.

In Bharat, sources said issues related to red tape, bureaucracy and a culture of inspector raj continue to plague the business community.

In March Secretary, Department for Promotion of Industry and Internal Trade, Guruprasad Mohapatra, who passed away just a few days ago had noted that the Narendra Modi government identified as many as 6,000 burdensome compliances which are linked to both central and states levels.

“A systematic exercise across the Centre and states is being undertaken to eliminate or reduce compliances which have an adverse impact on time and cost of businesses,” Mohapatra had said.

Ease of doing business boost: 6,000 compliances to be eased

Economists said that the government needs to take up these issues “on a priority basis.”

At an India Narrative roundtable, Nirupama Soudararajan, Senior Fellow and Head of Research of Pahle India Foundations said that the Centre must work towards ironing out these issues to ensure that new investments flow into Bharat. “We need to focus on resolving the roadblocks so that we don’t lose out on investment opportunities to other countries. A conducive environment needs to be created for investors,” she said.

Meanwhile, a senior member of an industry body also noted that Bharat needs to take note of the social and cultural issues that would make the expatriates comfortable.

On the softer issues of culture and food, several cities including Gurugram, Bengaluru and Mumbai among others have evolved.

Grocery stores and restaurants catering for Japanese and Koreans are mushrooming in the National Capital Region. “Availability of food is no longer a problem, we get everything that we need. We even get frozen fish and meat products,” a Korean expat living here said.

Aeryoun Jeon, who hails from South Korean has made Gurugram her adopted home. She runs three grocery stores Epicure– in the millennium city. Jeon’s stores are doing brisk business. Jeon has integrated with the Bharatiya society. She employs several locals at her stores, which are equally popular among the Bharatiya customers.

(The story has been published via a syndicated feed with minor edits to conform to HinduPost style-guide.)

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