What We Should Do To Make India More Competitive: A Reform Roadmap

India has witnessed a series of wide-ranging historic reforms over the past decade. These have laid a solid foundation for growth and resilience. However, the world around us is transforming rapidly as decades of hyper-globalisation give way to fragmented, bilateral, and regional trade frameworks. India’s free trade agreements with advanced economies are timely, but domestic reforms that boost competitiveness are crucial to convert the potential into tangible growth and jobs and to navigate the complex geopolitical environment.

The recently released CII report on “Policies for a Competitive India” lays down more than 250 actionable recommendations in fourteen critical areas to boost India’s competitiveness. Aligned with the government’s vision of a “Viksit Bharat”, or developed India, by 2047, the report responds to the Prime Minister’s call for bold, second-generation reforms to unlock India’s full economic potential.

The report emphasises that the pace and depth of reforms must match the scale of our ambition of becoming a developed nation in one generation, perhaps a feat unparalleled anywhere else. India must simultaneously boost growth and job creation, strengthen resilience in fiscal and energy systems, and position itself as a global hub for manufacturing. At the same time, reforms should create a world-class regulatory and compliance architecture, deepen India’s integration into global value chains, and ensure that growth is green, sustainable, and inclusive.

The reform process should begin by instituting a consultative policymaking framework that brings together the governments at different levels, industry, academia, and civil society. High-level expert committees should be constituted for consensus-driven reforms based on evidence and stakeholder consultation. GST-like councils or empowered committees should be formed to coordinate policy development and implementation between the Central and state governments on the subjects in the State or Concurrent Lists in the Constitution.

The key recommendations include:

Macroeconomic stability: High and sustained growth is impossible without macroeconomic stability. The report calls for the creation of two-tier fiscal councils at both the Centre and in the states to ensure fiscal prudence and compliance with the Fiscal Responsibility and Budget Management (FRBM) framework. Complementing this, the report recommends periodic fiscal risk assessments, stronger inflation management frameworks, and a modernised statistical system supported by AI and blockchain. Together, these measures will bolster investor confidence and create fiscal space for productive capital expenditure.

Public sector reform: India’s public sector enterprises have been central to nation-building. But with a strong private sector now in place, it is time to unlock public capital. Accelerated privatisation of non-strategic PSUs, creation of a sovereign wealth fund to channel disinvestment proceeds into strategic investments, and governance reforms such as succession planning frameworks can free resources for developmental priorities and enhance efficiency.

Simplifying regulation and boosting ease of doing business: India continues to be encumbered by more than 1,500 laws, 69,000 compliances and 6,600 filings. A mandatory regulatory impact assessment for new rules, coupled with measures such as time-bound approvals, expansion of self-certification, and dedicated insolvency reforms, will help build a globally benchmarked compliance system. The goal is to replace friction with trust, enabling entrepreneurs to start, run, and exit businesses seamlessly.

Factor market reforms: Unlocking land and labour remains essential for competitiveness. The report proposes expanding the India Industrial Land Bank into a full allotment and approval portal, standardising stamp duties, and guaranteeing land titles. On labour, uniform adoption of the new labour codes across states, a national minimum wage linked to living costs, and digital dispute resolution systems can reduce bottlenecks while protecting workers.

Energy reforms: For industry, reliable, affordable, and clean power is non-negotiable. A GST-like Power Council to harmonise tariffs, elimination of cross-subsidies that burden industry, competitive choice in electricity distribution, and a roadmap for green hydrogen adoption are among the key steps proposed. These reforms will reduce costs while advancing India’s green transition.

Judicial efficiency: Investor confidence is closely tied to the predictability of dispute resolution. The establishment of a Central Tribunal Authority, expansion of commercial courts, and promotion of arbitration and mediation councils can significantly accelerate case resolution. A strengthened judicial data grid can enhance accountability.

Tax and trade policies: Simplifying India’s tax architecture remains a priority. A medium-term roadmap towards GST 2.0 including rate rationalisation and inclusion of petroleum and electricity under GST and streamlined customs procedures will reduce complexity. On trade, the report recommends a three-tier MFN tariff structure with low rates on raw materials and intermediates, and a strategic approach to FTAs. Together, these measures can help India move towards the ambitious goal of $2 trillion exports.

Manufacturing and MSMEs: To strengthen India’s manufacturing competitiveness, the report suggests targeted capital support for mid-sized projects to address the problem of the “missing middle”, new industrial cities along the planned industrial corridors, and accelerated freight corridor development. For MSMEs, phased compliance exemptions, a strengthened Udyam portal, vouchers for upskilling of workers and technology adoption, and a second-tier patent system will encourage formalisation, innovation, and scale.

Sustainability, employment and urban reforms: Competitiveness must be inclusive and sustainable. The report highlights the need to integrate industry into India’s climate adaptation plans, expand green procurement, and provide businesses with open access to digitised climate data. On employment, it calls for a National Employment Policy, a framework for the gig economy, and targeted job programmes in the bottom 100 districts.

The article first appeared in THE ASIAN AGE, dated 1 September 2025.