New Delhi: The Union government said policy reforms in recent years significantly improved the ease of doing business in India, strengthening investment confidence and expanding the country’s enterprise ecosystem.
According to official data, business registrations increased by about 27 percent over five years. The number rose from 1.55 lakh companies in 2020–21 to 1.98 lakh in 2025–26 as of February 3, 2026.
The government said the Union Budget 2026–27 proposed further steps to strengthen the ease of doing business environment. These measures include digital trade facilitation, tax certainty, reduced compliance and litigation, and trust-based customs systems.
Officials said these reforms aim to create a transparent and predictable ecosystem for businesses. They also intend to attract investment, encourage entrepreneurship and accelerate economic growth.
India’s improving business climate is also reflected in the Reserve Bank of India’s Business Expectations Index. The index remained above the neutral benchmark of 100 through FY 2024–25 and continued into the second quarter of FY 2025–26.
Institutional reforms expand ease of doing business ecosystem
Several institutional reforms have also strengthened the ease of doing business framework in the country.
Under the Startup India initiative, eligible firms receive recognition from the Department for Promotion of Industry and Internal Trade. This recognition allows startups to access tax benefits, simplified compliance procedures and faster intellectual property processing.
As of February 2026, India had more than 2.16 lakh DPIIT-recognised startups. The initiative aims to promote innovation, generate employment and build a strong entrepreneurial ecosystem.
The government also introduced credit guarantee schemes to improve access to finance for startups and micro, small and medium enterprises.
These programmes provide collateral-free loans and reduce lending risk for financial institutions. For example, the Credit Guarantee Scheme for Micro and Small Enterprises offers guarantees for loans up to ₹10 crore.
Similarly, the Credit Guarantee Scheme for Startups supports eligible firms with enhanced guarantee coverage up to ₹20 crore.
Public sector banks also launched a digital credit assessment model in 2025 to improve loan processing for MSMEs. The system uses verifiable digital data to enable automated loan appraisal.
Between April and November 2025, banks sanctioned loans worth more than ₹41,500 crore under this model.
Regulatory reforms have also played a key role in strengthening the business environment.
The Jan Vishwas Act decriminalised 183 provisions across 42 laws to reduce criminal liability for minor offences. Meanwhile, the Insolvency and Bankruptcy Code created a structured system for resolving distressed companies.
Since the IBC came into force, 3,865 corporate debtors have been rescued through resolution plans, settlements or withdrawals.
Officials said additional reforms also focused on trade facilitation. These include digital cargo clearance systems, risk-based customs inspections and expanded investment access for overseas investors.
The government also reduced regulatory burdens through the Regulatory Compliance Burden initiative. Since 2020, more than 47,000 compliances have been removed.
Officials said labour reforms, GST simplification and tax rationalisation further strengthened the ease of doing business framework.
They added that continued reforms across taxation, finance and regulation aim to build a resilient and competitive business environment in India.
