Insight – India on the rise in latest ease of doing business rankings
India has moved up 14 places to be 63rd among 190 nations for ease of doing business, in the World Bank’s Doing Business 2020 report, released on 24 October.
The country was 77th among 190 countries in the previous year’s rankings.
The World Bank report assesses improvement in the ease of doing business
environment in Delhi and Mumbai.
‘It is encouraging to see the steady implementation of reforms in South
Asia,’ says Rita Ramalho, Senior Manager of the World Bank’s Global
Indicators Group, which produces the study. ‘Continued and sustained
progress is key to improving the domestic business climate and enabling
Major improvements were registered in the areas of Starting a Business,
Dealing with Construction Permits, Trading Across Borders and Resolving
Importantly for Australian business, importing and exporting has become
easier for the fourth consecutive year. India now ranks 68th globally on
this indicator and performs significantly better than the regional average:
for example, documentary compliance hours for imports averages 22 versus
93.7 hours for the region.
India joins an eclectic group of countries with the most notable
improvement in doing business: Saudi Arabia, Jordan, Togo, Bahrain,
Tajikistan, Pakistan, Kuwait, China and Nigeria.
Effective and efficient insolvency laws are vital to stability in financial
systems and fundamental to economic growth. Entrepreneurship, by nature,
involves risk taking. Some businesses will fail. A sound insolvency and
bankruptcy process enables rapid resolutions of such problems.
The establishment of a uniform insolvency code in 2016 as part of wider
corporate law reform has led to a gradual increase in the number of
reorganisations. As a result, the overall recovery rate for creditors has
jumped from 26.5 to 71.6 cents on the dollar (for Mumbai), which is above
the OECD benchmark of 70.2.
While there has been progress, India still lags in areas such as contract
enforcement (163rd) and property registration (154th), rankings for which
did not move and slightly deteriorated respectively.
for example, it takes 68 days and costs on average 7.4% of a property’s
value to register it, longer and at greater cost than among OECD
high-income economies. And it takes 1,445 days for a company to resolve a
commercial dispute in the same city, almost three times the average time in
OECD high-income economies.
To strengthen Australia’s profile and deepen strategic relationships with
India, Australian Prime Minister Scott Morrison will visit in January 2020.
Australian businesses seeking to engage with India can register with Austrade.
Dr Matthew Durban is Australia’s Senior Trade & Investment
Commissioner in India with responsibility for Austrade Posts in Mumbai,
Bengaluru, Hyderabad and the in-market Resources & Energy Industry
Team. He has almost thirty years commercial experience across five