Top 10 Challenges of Doing Business in India

India is going through an unprecedented period of economic liberation, opening its huge consumer base to international companies.

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India is going through an unprecedented period of economic liberation, opening its huge consumer base to international companies. However, it is a particularly difficult place to do business, so having the appropriate local help is the key to unlocking the country’s enormous economic potential.

India is a huge country with a vast economic potential. However, going through the complicated and varied corporate landscape can be a challenge if you do not have the right help.

India is not only one of the fastest growing countries in the world, but is also going through a period of unprecedented economic liberation. Today, more than ever, it gives foreign investors access to their vast and varied market. A young and numerous population, together with a solid export sector, are those that await the companies in expansion, with a base of potential consumption that, by far, surpasses most of the rest of the nations of the world, both developed and process of development.

Political stability and broad consensus regarding reforms is also a great stimulus for companies to expand. The highly developed banking system and the vibrant capital market highlight the maturity of the financial system. Still, doing business in India can still be a problematic task. Therefore, having the right local help can make the difference for your company to achieve success.

Start a company

In India, the costs of starting a business are astronomical, and the required procedures can be a challenge if you do not have the appropriate local knowledge. 12 are the procedures of the initial stage when establishing a company, which represent 49.8% of the per capita income. Carrying out the tasks demands, on average, almost one month (27 days), considerably more than the average of 12 days of the OECD.

Take care of building permits

Building permits are also an expensive management that requires compliance with 34 procedures and takes 196 days. Obtain the Intimidation of disapproval of the office of proposal of construction (Building Proposal Office, in English) and pay rates delay around a month. Certificates of No Objection (NOC) must be managed with the Tree Directorate, the Stormwater Directorate, the Water and Sewer Department, the Electricity Department, the Department of the Environment, the Department of Transit and Coordination and the CFO.

Obtaining electricity

The cost of obtaining electricity is relatively low compared to the rest of South Asia, but the number of procedures can be daunting. In addition, each procedure takes too much time, since receiving an on-site inspection takes eight days, and it takes three weeks to obtain the external connection, install a meter and carry out the test installation.

Property registration

Registering a property requires a lot of fieldwork and can lead to significant expenses. The stamp of 5% of the property and the charge of 1% on the market value of the property that is paid in the Undersecretary of Guarantees are the two fees that must be paid, although fees and expenses of lawyers may also arise. the Department of Land Inspection.

Obtaining credits

India has the best of South Asian economies in terms of the ease of obtaining credit, and ranks 23rd in the world according to the World Bank and the IFC. This was reported in 2013 when a “unified collateral registry, which is geographically centralized, became operational in India and thus strengthened access to credit and the guaranteed transactions regime”.

Protection of investors and compliance with contracts

The concept of investor protection has gained much attention lately and, for this purpose, the Securities and Exchange Board of India (SEBI) has been formed. The fulfillment of contracts will also be an area to observe: India is among the worst countries in the world regarding its ability to enforce a contract, which takes an average of 1420 days.

Tax payment

Companies that operate in India must make 33 tax payments per year, and this requires 243 hours of their time. The base rate of corporate tax is 30% but companies can also incur charges such as central sales tax, dividend tax, property tax, fuel tax, vehicles, VAT and excise tax. special.

Marketing in other countries

While India opens its borders to international trade, there are many difficulties to overcome when importing and exporting goods. Many levels of bureaucracy make it a challenge to market goods effectively, and companies must submit a long list of documents before they can cross borders.

Insolvency resolution

Resolving a case of insolvency in India takes 4.3 years, much more than in South Asia and the OECD countries. The cumbersome judicial system often delays business relationships.


India is a cultural hotbed, and doing business is more about generating relationships than presenting figures and results. Foreigners may find it difficult to adapt to the polychrome culture, so it is important to familiarize yourself with the destination before traveling.