India: Major Initiatives On Improving ‘Ease Of Doing Business' In India

Last Updated: 30 September 2015
Article by Vaishakh Kapadia, Aditi Tralshawala and Shatakshi Komal

The Government of India is constantly trying to encourage investments in India. In order to compliment these efforts the Department of Industrial Policy and Promotion ("DIPP") has recently taken several initiatives to facilitate doing business in India.

This newsflash sets out the relevant changes and steps taken.

A. Industrial Licenses

  1. The application for Industrial License ("IL") and Industrial Entrepreneur Memorandum ("IEM") can be made online. This will facilitate filing applications and online payment of service charges. Fourteen services are brought into one portal which will work as a single window portal.
  2. Further, the application forms for IL and IEM have been simplified.
  3. The initial validity period of IL has been increased to three years from two years in order to give the licensees enough time to procure land and obtain the necessary clearances/ approvals from authorities. In case the production has not commenced within three years of issue of IL, a further extension of two years would be granted provided certain requirements are fulfilled. However, if the business has not commenced for five years from the issue of the issue of the IL, the IL will lapse automatically.
  4. Partial commencement of production is being treated as commencement of production of all the items included in the IL. This has removed the requirement of licensees to get their IL extended even though they have started part production.
  5. The Ministry of Home Affairs ("MHA") has stated that it will grant security clearance on IL applications within twelve weeks. In matters other than those concerning explosives and Foreign Investment Promotion Board, security clearances are valid for three years unless there is a change in composition of management or shareholding.
  6. The DIPP has now adopted the new National Industrial Classification ("NIC") 2008 instead of the old NIC 1987 for the purpose of classification for IL and IEM. The NIC standard is an important business and industrial standard for industrial classification system. The change to NIC 2008 is to ensure a contemporary classification system.
  7. In order to facilitate investment by investors and reply to their queries, the DIPP website has provided Frequently Asked Questions for grant of IL.

B. Export-Import Documents

  1. Initially the documents required for export and import of goods was ranging upto eleven documents. Now the number of documents required for export and import of goods are limited to three documents.

C. Ministry of Defence ("MOD")

  1. The list of defence products requiring an IL has been issued. This list excludes large number of parts/ components, castings/ forgings etc. from the purview of an IL.

    Further, products with dual use (i.e. having military as well as civilian applications), unless classified as defence item, will also not require an IL from the defence perspective. In case of these items only an IEM has to be filed.
  2. The Department of Defence Production, MOD has issued 'Security Manual for Licensed Defence Industry'. This has removed the requirement of an affidavit from applicants. Earlier, an affidavit signed before Judicial Magistrate was required from the applicant to confirm that they will comply with the safety & security guidelines/ procedures laid down by the MOD and Ministry of Home Affairs. The applicants were facing difficulties in obtaining such affidavit and this was causing severe delay in issue of IL, even after receipt of the approval of Licensing Committee.

D. Ministry of Corporate Affairs ("MCA")

  1. The Companies Amendment Act, 2015 ("Amendment Act") has been passed. This Amendment Act amongst other important changes removes requirements of minimum paid-up capital and common seal for companies.
  2. The MCA has introduced an integrated process for incorporation of a company. Now the applicants can apply for Director's Identification Number ("DIN") and company name availability simultaneously with the application for incorporation of a company. Earlier, the initial Directors were required to obtain a DIN and then the application for name availability could be made by the Director. Once the name approval was granted the incorporation application could be made. Hence, the integrated process will expedite the incorporation process.

E. Ministry of Environment and Forests ("MOEF")

  1. The process of applying for Environment and Forests clearances has been made online through MOEF portal.
  2. The requirement for Environment Assessment Report is required for industrial shed, school, college, hostel for education institution, only if the built-up area is above 20,000 square meters and up to 150,000 square meters.

F. Ministry of Labour and Employment ("Labour Ministry")

  1. The Labour Ministry has set up a unified portal for registration of Units for Labour Identification Number, reporting of Inspection, submission of returns and grievance redressal.
  2. The registration with Employees Provident Fund Organization and Employees State Insurance Corporation ("ESIC") has been automated. The ESIC registration number is being provided on a real-time basis.

G. Other initiatives

  1. Pursuant to a comparative study of practices followed by the States in India for grant of clearance and ensuring compliances; six best practices were identified. These were circulated among all the States for peer evaluation and adoption.
  2. The Ministry of Ministry of Micro Small and Medium Enterprises ("MSMEs") has issued an order facilitating revival and rehabilitation of MSMEs, through a banker's committee to enable MSMEs to seek standard as well as customized relief and concession and thereby revive itself.
  3. A checklist with specific time-lines for processing all applications filed by foreign investors (in cases relating to retail trading/ Non-Resident Indian / Export Oriented Units), is placed on the DIPP website.
  4. An Investor Facilitation Cell has been created to guide, assist and handhold investors during the entire life-cycle of the business.
  5. The DIPP has requested all Secretaries of Government of India and Chief Secretaries of the States/Union Territories to simplify and rationalize the regulatory environment.
  6. In Maharashtra the registration process of Value Added Tax ("VAT") and professional tax has been merged into a single process with single ID. In Delhi the registration for VAT has been made online. Tax Information Network ("TIN") allotment is done on a real-time basis and business can start immediately on receipt of TIN number.
  7. The time required for giving a new electric connection in Mumbai has been reduced to twenty-one days from sixty seven days. The number of procedures for obtaining the connection is reduced to three from seven. The procedure for new electric connection in Delhi is simplified with reduced procedures and timelines.
  8. The Delhi Municipal Corporation has launched online application process for grant of construction permits for residential and industrial buildings.


The focus of the 'ease of doing business policy' is mainly on cutting out the tedious documentation and unnecessary paper work and getting the work done in a shorter time span. It was imperative to take steps to address the concerns and delays, to enable the industry to grow. This was a much needed step to simplify compliance and to make India more investor friendly.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions