How Easy or Difficult it is to Start a Business in India?

India has improved drastically in the World Bank’s ‘Ease of Doing Business’ 2020 international ranking by moving up to 63 out of 190 countries in the list. India was at rank 130 in a list of 189 countries in 2016. A sudden jump in rank from 130 to 63 is definitely remarkable and shows true business potentials of new India. Although this sounds good there is a lot more to be done for India to continue rising up. Hrishikesh Datar, Founder and CEO of Vakilsearch, a technology driven company empowering Indians with access to trustworthy legal solutions for entrepreneurs, gives his insights into what more can be done to push India further up the ranking.

The World Bank has said “In the year of 2015, India eliminated the paid-in minimum capital requirement and streamlined the process for starting a business. More reforms are ongoing—in starting a business and other areas measured by Doing Business—though the full effects are yet to be felt”.

Doing business in India – a country which the economic pundits say will be the world’s second-largest economy by 2030 (with China top and the USA pushed into third place). Going back a decade or so this assertion might have seemed nothing more than a fantasy, but everybody now seems to agree that India is finally going places. With a rapidly growing population of 1.3 million which boasts a vibrant middle class and a demographic which is heavily weighted towards youth, the potential of India seems almost limitless.

In the past, many developed economies saw India as a destination for the low-cost outsourcing of back-office or R&D-type functions and, whilst this area of the economy continues to thrive, India needs to be viewed in a very different light these days. India is, quite simply, the world’s largest potential market for goods and services. Where China has already developed much of its infrastructure and service economy, India still has enormous work to do. Look around on the streets of Delhi, Bangalore or Chennai and the need for development is obvious – move into the second or third tier cities and this need becomes even more acute.

What does all of this point to? Opportunities. India is a land of endless possibility where the people are aspirational, energetic, open and eager for progress.


The biggest mistake organisations make when looking at India as a market is that they fail to do adequate research. To say that India is enormous would be a massive understatement. A country with 1.3 billion people, multiple languages, ethnicities, climates and geographies cannot be approached as a homogenous unit. You can’t really have an ‘India strategy’ – you probably need multiple India strategies.

The first question has got to be is: ‘Is India the right market for your products or services at this stage of your development, taking into consideration the current needs of India?’ This is not an easy question to answer. So many factors come into play when addressing this – what is your price point, and how does that sit against the competitive landscape in India? Who are your major competitors and how are they faring? Can you afford to invest in India knowing that the returns might not accrue for a number of years? Which city or region would be a good starting point?

All of these questions need answers, but good quality information is not always easy to come by in India. You will need to engage people on the ground in India who can really get under the skin of the local market and get back to you with honest, trustworthy answers to key strategic questions. Don’t convince yourselves you can do all your research via a laptop back in your office or home– you quite simply can’t.

Finding Manpower

India is full of really great potential employees. On the whole, Indians are well-educated, ambitious, enthusiastic and motivated. Lack of local talent definitely isn’t the issue; finding and retaining good people though can be very difficult.

The Indian employment market is very fast-moving. Indians are always on the lookout for ways of improving their career prospects, job titles and income. How are you going to convince good people that you offer them a bright future? Why should they join your company when there is a myriad of opportunities for the type of people you are looking for?

Culture in India

The underlying factors which drive Indian business culture are deeply rooted in the country’s religious, societal and ethnic past. People are often fooled into thinking that because Indian’s often speak good English and because the country has a western-influenced history, that the cultural challenges they might face will be minimal. Nothing could be further from the truth.

You simply cannot hope to succeed in India unless you gain a very good understanding of the local cultural landscape.

Though with huge efforts of Indian government like launching a start-up India portal, Mudra Loan scheme for MSME (medium small & micro enterprises), there’s a lot to be done in collaborate efforts of Indian citizens and Indian government to get into top economic powers of the world.