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Fine-print of India’s improved EoDB ranking is disturbing, Start Ups faltering

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Fine-print of India’s improved EoDB ranking is disturbing, Start Ups faltering

[vc_row][vc_column][vc_column_text]Despite PM Narendra Modi’s Start Up India initiative, World Bank’s Ease of Doing Business rankings show starting new business in India is becoming difficult

As India finished at the 100th spot – improving from last year’s 130 – in the World Bank’s Ease of Doing Business rankings for 190 countries that were surveyed, it was only natural for Prime Minister Narendra Modi and finance minister Arun Jaitley to pat their backs on the supposed endorsement of their handling of the country’s economy.

Access the World Bank’s EoDB rankings report here:

http://www.doingbusiness.org/rankings

The EoDB rankings declared on Tuesday are no doubt a shot in the arm for a government that, for a better part of the past year, has been struggling to justify its economic policies and counter growing criticism over a perceived slump in investor sentiment and job creation. Yet, they also portray another reality; one which doesn’t bode well for the Modi government nor justify the premature celebrations over what the Prime Minister termed as a “historic jump”.

For starters, the survey factors in the ease of doing business only in Mumbai and Delhi while Tier I and Tier II cities which are proposed to emerge as the new business centres of India have not been surveyed in the ‘Doing Business 2018: Reforming to Create Jobs’ report that was released on Tuesday by Annexte Dixon, World Bank vice president for the South Asia region. Considering that the national and financial capital are already choked with existing industries and businesses, the exclusion of Tier I and Tier II cities from across the country should in itself be reason enough to not see India’s improved ranking as a comprehensive endorsement of the overall EoDB scenario across the country.

Dixon attributes the “significant jump” in India’s ranking to “the Indian government’s consistent efforts over the past few years and India’s endeavor to strengthen its position as a preferred place to do business”. The report acknowledges improvements in indicators such as resolving insolvency, paying taxes, protecting minority investors and getting credit as the reasons behind the improvement in India’s ranking.

However, the report skips factoring in disruptions caused in businesses and the overall Indian economy due to two of the biggest and most controversial ‘reforms’ rolled out in the country by the Modi government – demonetisation and implementation of the Goods and Services Tax (GST).

While demonetisation, which flushed out 86 per cent of the cash in circulation from the economic in one single stroke and paralysed the economy, especially in the informal sector, for months, was a decision unique to India and so found no mention in the World Bank report, the EoDB survey was completed a month prior to the GST rollout and hence disruptions caused by the new tax regime were also not factored in while deciding India’s ranking.

Economists within India and abroad, as also Opposition leaders, have hit out at the Modi government over the negative impact of demonetisation and the hasty implementation of the GST regime. However, with the two contentious ‘reforms’ finding no mention among the EoDB parameters, it would perhaps not be wholly incorrect to assume that the rankings do not reflect the impact that they have had on businesses in India.

Fine-print of India’s improved EoDB ranking is disturbing, Start Ups faltering

Comparative rankings of India of the current and previous year in the 10 categories on which countries were ranked. Photo credit: Business Line

Another aspect of the report that cannot be brushed aside is the fact that the rankings come as an endorsement of Congress vice president Rahul Gandhi’s charge against the Modi of his government having made it more difficult to start new businesses in India despite the Prime Minister’s pet Start Up India initiative.

Of the 10 broad parameters that the EoDB rankings are based on, three are clearly linked with starting of new business and in each of these parameters, India has slipped from its rankings of the previous year. For instance while on the parameter of ‘starting a business’, the need for Indian entrepreneurs to go through 12 procedures to start a business, as opposed to five in high-income countries, worsened India’s ranking in the category to 156 from 155 last year – out of a total of 190 countries.

A majority of new ventures also need to register their official property that they plan to use as the venue for their business. In the category of ‘Registering property’, India marked its biggest decline, slipping from a rank of 138 last year to 154 in the current year. New ventures also need electricity supply and on that count too, India has slipped although the country’s overall ranking in the category of ‘getting electricity connection’ is better than nearly 70 per cent of the countries that were surveyed. With a 45-day period needed to get a new electricity connection, India ranked 29 in this category as against its previous ranking of 26.

The parameters where the country seems to have done well, marginally or substantially, are all that apply to existing business, be it categories like ‘enforcing contracts’ and ‘resolving insolvency’ or ‘paying taxes’. What the Modi government needs to do, if it really is serious about its Start Up India initiative, is to also make setting up of new business – and not just in Mumbai or Delhi but elsewhere in India too – a much less cumbersome process.[/vc_column_text][/vc_column][/vc_row]

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India welcomes US tariff cut as PM Modi thanks Trump for easing trade barriers

PM Modi has thanked US President Donald Trump after the US reduced tariffs on Indian goods to 18%, calling the move beneficial for bilateral trade.

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February 3, 2026

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pm modi

Prime Minister Narendra Modi on Sunday welcomed US President Donald Trump’s decision to lower tariffs on Indian goods, describing the move as one that unlocks significant opportunities for cooperation between the two countries.

Minutes after President Trump announced the reduction on his social media platform, the Prime Minister took to X to express his appreciation, calling the development a boost for “Made in India” products entering the US market.

“Delighted that Made in India products will now have a reduced tariff of 18 per cent,” PM Modi said, thanking President Trump on behalf of India’s 1.4 billion people.

The Prime Minister said he had a “wonderful” conversation with President Trump and underlined the broader significance of the decision, noting that closer economic cooperation between the world’s two largest democracies benefits people on both sides.

PM Modi also said that when two major economies work together, it opens doors for mutually beneficial growth, adding that India supports President Trump’s efforts aimed at global peace, stability, and prosperity. He said he looked forward to strengthening the partnership further.

President Trump, while announcing the tariff reduction, described the move as a “trade deal” and referred to PM Modi as a close friend and a respected leader.

Trade signals positive momentum

The US India Strategic Partnership Forum described the tariff reduction as an important and positive first step in strengthening bilateral trade relations.

While the detailed terms of the agreement are yet to be finalised, the announcement reflects political intent on both sides to move towards a broader US-India bilateral trade agreement. Such an agreement is expected to address issues related to tariffs, market access, non-tariff barriers, and trade across multiple sectors.

How tariffs on Indian goods evolved

The latest decision comes after months of tariff fluctuations on Indian exports to the US.

Timeline of key developments

  • April 2, 2025: The US imposed a 26% reciprocal tariff on several Indian imports as part of global tariff actions.
  • April 10, 2025: The tariffs were paused for 90 days, with a 10% duty retained on all US imports.
  • July 31, 2025: A 25% tariff was announced on Indian goods, along with a warning linked to India’s purchase of Russian oil.
  • August 7, 2025: Tariffs were raised to 50%, the highest imposed on any US trade partner at the time.
  • February 2, 2026: The US announced a reduction in tariffs on Indian goods to 18%.

The latest rollback marks a significant easing of trade tensions and sets the stage for deeper engagement between India and the United States.

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US-India trade deal to strengthen strategic partnership, says Amit Shah

Amit Shah says the US-India trade deal with reduced tariffs will elevate strategic partnership and pave the way for stronger trade ties and mutual growth.

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February 3, 2026

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Amit Shah

Union Home Minister Amit Shah on Monday said the newly announced trade deal between India and the United States will elevate the strategic partnership between the two countries and pave the way for stronger trade ties and mutual growth.

In a post on social media platform X, Shah said the agreement marks a significant moment in India-US relations, with business between the two nations set to expand further. He noted that the deal, which includes a reduction in reciprocal tariffs, will benefit both countries and their people.

Calling it a “big day” for bilateral ties, Shah said the trade deal has been locked with a significantly reduced tariff of 18 per cent, creating fresh opportunities for economic cooperation. He also congratulated Prime Minister Narendra Modi and US President Donald Trump on what he described as a historic agreement.

According to Shah, the agreement will strengthen the strategic partnership between the two democracies and support growth on both sides. He added that trade and business activity between India and the US is expected to flourish in the coming period.

Modi welcomes reduced tariffs on Indian goods

Prime Minister Narendra Modi also welcomed the development, saying he was delighted that tariffs on “Made in India” products would now be reduced to 18 per cent. He thanked President Trump for the announcement and said the move would benefit the people of both nations.

Modi said cooperation between two large economies and the world’s largest democracies creates opportunities for mutually beneficial growth. He added that such collaboration helps unlock new possibilities for trade and development.

The prime minister also said he looked forward to working closely with the US president to take the bilateral partnership to unprecedented heights.

Trump outlines terms of the agreement

US President Donald Trump said the United States agreed to lower the reciprocal tariff on Indian goods from 25 per cent to 18 per cent following a phone conversation with Prime Minister Modi. He added that India would move forward to reduce tariffs and non-tariff barriers against the US.

Trump said New Delhi had also committed to purchasing American goods at a much higher level, including energy, technology, agricultural products, coal and other items. He mentioned that India would buy US energy worth more than USD 500 billion.

The US president said the relationship between the two countries would become even stronger going forward. He also noted that the two leaders discussed the ongoing war between Russia and Ukraine during their conversation.

Background to the trade talks

India and the US had agreed earlier to finalise the first tranche of a bilateral trade agreement, but negotiations had slowed after higher tariffs were imposed on Indian goods. The latest agreement follows several rounds of talks between the two sides.

Officials said India now faces lower tariffs compared to several competing export economies, which could provide an advantage to Indian exporters in the US market.

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Markets surge as Nifty jumps 750 points after India-US trade deal

Indian equity markets rallied sharply with Nifty and Sensex posting strong gains after the India-US trade agreement announcement.

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2 hours ago

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February 3, 2026

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Sensex

The Indian equity markets opened sharply higher on Tuesday morning, buoyed by optimism following the announcement of a trade agreement between India and the United States.

In early trade, the Nifty jumped around 750 points, while the Sensex surged nearly 2,400 points, reflecting strong investor confidence hours after the deal was made public.

The rally came after US President Donald Trump announced that Washington would slash tariffs on Indian goods to 18 per cent from 50 per cent, as part of a broader trade agreement with New Delhi. In return, India agreed to halt purchases of Russian oil and lower trade barriers, according to the announcement.

President Trump shared the development in a post on his social media platform, calling it a major trade breakthrough. The announcement was followed by a message from Prime Minister Narendra Modi, who thanked the US President on behalf of the people of India for the decision.

Rupee opens stronger against dollar

The positive sentiment was also reflected in the currency market. The Indian rupee opened stronger at 90.40 against the US dollar, gaining 1.10 rupees in early trade, supported by expectations of increased foreign investor inflows following the deal.

Asian markets rebound

Asian markets also traded higher, adding to the positive global cues. Japan’s Nikkei rose about 2.5 per cent, recovering from previous losses, while South Korea’s KOSPI climbed nearly 4 per cent. Market sentiment was further supported by signs of improved US factory activity overnight.

Futures indicated a recovery in Hong Kong markets, while S&P 500 futures were up around 0.3 per cent, as investors tracked upcoming corporate earnings.

With global cues turning favourable and optimism surrounding the India-US trade agreement, Indian markets are expected to remain buoyant, with investors closely watching further developments during the trading session.

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