Aligning regulation with ease of doing business | India

This, the first of a series examining the tension between the ease of doing business and the necessity for regulation, looks at the hurdles to setting up enterprises in India and attracting foreign investment. Stakeholders are worried about regulatory and legal obstacles to investing. The time to obtain approvals as well as a lack of clarity and support from the government have been challenging. The government has therefore introduced a number of initiatives in 2024 and 2025. These key regulatory reforms take advantage of advancements in technology.

Government portals have been upgraded to advance economic progress and grant approvals seamlessly. In November 2024, the government, together with the Confederation of Indian Industry, launched the Ease of Doing Business and Regulatory Affairs portal to introduce India’s business environment and invite suggestions for improvement. Users can track their submissions, ensuring transparency, accountability and the timely resolution of difficulties.

The Jan Vishwas 2.0 Bill decriminalises a number of corporate activities. This will assuage worries about foreign companies and directors being prosecuted when investing and taking up key positions in Indian businesses.

To simplify cross-border share swaps under exchange control regulations, the government in August 2024 permitted the issue or transfers of Indian company equity instruments in exchange for foreign company equity instruments, including swap arrangements. Indian companies can now better expand globally through, among other routes, mergers and acquisitions. Acknowledging the current trend of reverse flip structures, the government issued rules in September 2024 to fast-track inbound cross-border mergers of foreign holding companies with their wholly owned Indian subsidiaries.

The Ministry of Corporate Affairs in April 2025 proposed further amendments to all these rules, inviting public comment. Changes will further streamline restructuring, enhance the ease of doing business and increase the number of fast-track mergers. Easing and simplifying foreign exchange regulations will encourage greater investment in India.

In November 2024, the Securities and Exchange Board of India (SEBI) amended several provisions in the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, to ease doing business. Integrated filing will make filing and compliance by listed entities easier. This includes financial and governance requirements, such as periodic filings reporting investor grievance redress and compliance, related party transactions, statements of deviation and variation and financial results.

The Digital Personal Data Protection Act, 2023 (DPDP act), will balance the right to protect personal data with the need to process such personal data for commercial purposes. The Ministry of Electronics and Information Technology circulated draft rules in January 2025, inviting public comment. When the rules are finalised, the DPDP act will likely come into force. The DPDP act is keenly awaited because it will have a significant impact on business operations.

The Ministry of Labour and Employment has proposed the phased implementation of key reforms to the Code of Wages 2019, the Occupational Safety, Health and Working Conditions Code 2020, the Code on Social Safety 2020 and the Industrial Relations Code, 2020. These will modernise industrial work culture.

The government tabled the Income Tax Bill, 2025, before parliament in February 2025, a milestone in simplifying the structure and provisions of the Income Tax Act, 1961. Three core principles guided the drafting of the legislation. These were textual and structural simplification, improving clarity and coherence, the absence of major policy changes to ensure continuity and certainty, and no changes in tax rates, retaining predictability. This reflects the government’s commitment to improve the ease of doing business through a simple and clear tax framework.

The resolve of the government to achieve a simplified, yet robust, regulatory framework will enable these regulatory reforms and initiatives to reduce bureaucratic hurdles and promote transparency. Businesses will see sustained strategic growth. The government’s initiatives prove its focus on promoting India as an investment destination and ensuring the ease of doing business.

Vivek K Chandy is the joint managing partner and Raj Ramachandran is a partner at JSA Advocates & Solicitors