Narendra Modi govt eases red tape but foreign firms still struggle


India ranks 130 out of 189 on the World Bank’s Ease of Doing Business index—the worst of all G20 countries. Photo: Reuters

New Delhi: Narendra Modi was elected two years ago this week promising to ease India’s notorious red tape and unpack regulatory tangles, but for foreign firms, doing business in the world’s fastest-growing large economy can still be a costly headache.

With a billion consumers and rising middle class, India holds dazzling potential—yet despite signs of change on the ground, high-profile corporate tussles continue to bamboozle investors.

British firms Cairn Energy and Vodafone have this year been hit with fresh bills for billions of dollars in backdated tax and threats of asset seizure linked to long-running disputes.

Agribusiness giant Monsanto in March threatened to pull out of India over government plans to slash cotton seed royalties paid by local firms by about 70% to help farmers.

And two major American business bodies this month voiced disappointment with the glacial pace of market reforms.

In a submission to the US commerce secretary, the National Association of Manufacturers urged Washington to press for change during a visit by Modi in June.

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