Government Policies and Business Regulatory Environment

Government Agencies supporting Business Growth

With an aim to provide ease of access to business providers and clear paths for setting up businesses in India, the Government of India has improved many departments and created bodies to handhold business growth in India. The Department for Promotion of Industry and Internal Trade (DPIIT) is responsible for determining the Industrial Policy at a Central Government level. The role and functions of the DPIIT include:

  • Productivity in Indian industry
  • Industrial Management
  • Matters related to e-commerce and start-ups
  • Facilitating Ease of Doing Business (EoDB)
  • Promotion of internal trade, including retail trade, the welfare of traders and their employees
  • Administration of Industries (Development and Regulation) Act, 1951, grant of Industrial Licenses (IL), and acknowledging Industrial Entrepreneurs Memorandum (IEM).

The DPIIT handles matters related to the protection of Intellectual Property Rights (IPR) in the fields of Patents, Trademarks, Copyrights, Industrial Designs and Geographical Indications of Goods and administers Acts, Regulations, and Rules made under them. The department also handles matters related to Foreign Direct Investment (FDI) and investment by NRIs, as well as undertakes the promotion of investment for the country's industrial development.

In addition, the DPIIT is also responsible for the promotion and development of sectors related to Cables, Light Engineering Industries, Light Industries, Light Electrical Engineering Industries, Paper & Newsprint, Tyres & Tubes, Salt, Cement, Ceramics, Tiles & Glass, Leather Goods, Soaps & Detergents and industries not covered by other Ministries/ Departments.7

InvestIndia is the country's official Investment Promotion and Facilitation Agency, serving as the first point of reference for potential investors. Their domain and functional experts provide sector- and state-specific inputs and hand-holding support to investors through the entire investment cycle, from pre-investment decision-making to policy impact analysis and expansion advisory. They assist with location identification, expediting regulatory approvals, facilitating meetings with relevant government/ corporate officials, and also provide after-care services that include initiating remedial action on problems faced by investors.

InvestIndia is a non-profit venture functioning under the DPIIT that works together with the various State Governments and the Federation of Indian Chambers of Commerce & Industry (FICCI).8

With a focus on building and improving infrastructure in the country, the government set up a National Investment and Infrastructure Fund (NIIF) to attract domestic and international investment into infrastructure development projects. The NIIF acts as a fund manager to become a key channel of investment into Indian infrastructure with a focus on transportation (roads, ports, and airports), energy, urban planning, and other infrastructure and allied segments through Alternate Investment Funds (AIFs), each with a unique investment strategy.9 The initial corpus is approximately USD 6 billion, with the government holding a 49% share.

To realize the government's dream of India becoming a USD 5 trillion economy by FY 2024-25, the Union Cabinet has set up two independent committees, namely the 'Empowered Group of Secretaries' (EGoS) and the 'Project Development Cells' (PDCs) for investor

Additionally, the Government of India promotes thrust sectors and formulates policies in each sector through their think-tank, the National Institution for Transforming India (also known as NITI Aayog) in conjunction with the bodies mentioned above for sustainable and progressive growth.

  • The EGoS comprises of the Cabinet Secretary, the CEO of NITI Aayog and the Secretaries of the DPIIT, the Department of Commerce, the Department of Revenue, and the Department of Economic Affairs
  • The EGoS committee is responsible for clearances from ministries. They must also evaluate investments and facilitate them while bringing synergy to ensure collaboration of all departments
  • The PDC is accountable for the development of investible projects in coordination between the Central Government, State Governments, and the FDI pipeline
  • The PDC aims to create projects with all approvals along with detailed schematics. It also aims to bridge gaps and identify issues in the system to resolve investment decisions and remove lags

Other government agencies include state industrial corporations, investor facilitation centers, and bilateral chambers of commerce, which assist with industryand state-specific incentives.

  • 7.Role and Functions of the Department for Promotion of Industry and Internal Trade, DPIIT, https://dipp.gov.in/about-us/role-and-functions-department-promotion-industry-and-internal-trade, accessed on 30 August 2020
  • 8.About Us, InvestIndia, https://www.investindia.gov.in/about-us, accessed on 30 August 2020
  • 9.National Investment and Infrastructure Fund, https://niifindia.in/, accessed on 30 August 2020
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Rajiv Rajendran
Executive Director
Corporate Services

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