By Dezan Shira & Associates
Editors: Nishant Dixit and Adam Pitman
In India, setting up a new business can be a complicated process for the uninitiated. Many foreign investors disparage of the bureaucratic red tape and slow-moving civil servants involved in the process. Although the infamous ‘License Raj’ has been slowly dying since India’s economic liberalization in the early 1990s, 25 years later India still maintains an abysmal ranking in the World Bank’s Ease of Doing Business report: 142 out of 189 economies.
The government has enacted a number of initiatives to improve the ease of doing business in the country, and ultimately the competitiveness of India’s economy. As part of this effort, the government launched an eBiz portal earlier this year offering single window processing of a number of essential government-to-business (G2B) services. The government will expand the eBiz portal in the years to come, but its first incarnation is promising for those who want to start a business in India.
What is the eBiz Portal?
The eBiz portal integrates several government services in a single website to facilitate faster delivery of licenses, registrations, and clearances for businesses. Businesspeople will be able to apply for required clearances on the portal, make electronic payments to process these applications and track the status of their application online. The eBiz portal is also a repository of information on services required for business set-up in India.
The eBiz portal website falls under Modi’s ‘Digital India’ initiative, which is designed to create digital infrastructure and improve government service provision. Currently, the federal government offers 14 G2B services through the portal; numerous state and union territory governments – including those in Andhra Pradesh, Delhi, Haryana, Tamil Nadu and Maharashtra – are also moving G2B services to the portal.
At least 15 more services from the federal government and 24 services from the state governments are expected to be added to the portal in the next three years. Meanwhile, the Department of Industrial Policy and Promotion (DIPP), a federal government body that oversees foreign direct investment policy, is planning to issue ease of doing business rankings for each state and union territory. This report, which is expected to be made public in July or August, is partly designed to pressure local governments to participate in the eBiz portal.
How Does the Portal Work?
Before the launch of the portal, businesspeople and their service providers would have to visit individual ministries to submit hard copies of forms or, when possible, go to each respective ministry’s websites. With the launch of the portal, businesspeople can submit forms, make payments, and track the status of their applications online.
The services can be used after registering on the portal, located online at www.ebiz.gov.in, through a two-step process. The first step requires businesspeople to login as individuals to receive login credentials, while the second step requires registering the business to access eBiz services.
Businesspeople can use the ‘Guide Me Wizard’ in the ‘Services’ section of the portal to receive a customized list of required permits and licenses. This customized list is dependent on the type of industry of the business and the state where the business will be located.
While some state-specific requirements exist, the federal government offers 14 pan-India services. A detailed description of forms, required supporting documents, payment details and filing timelines set out on the eBiz portal website is as described in the above table.
The Big Picture
The eBiz portal introduces an unprecedented degree of clarity to obtaining a number of licenses and registrations necessary for setting up a business in India. Well-organized applicants will find that the amount of time involved in the application process will drop significantly.
However, companies that do not have staff members familiar with India’s business environment may struggle to gather, prepare and file support documents required for some of the G2B services featured on the eBiz portal. Some of the services featured on the eBiz portal require supporting documentation or information that is difficult to obtain or produce without local expertise. Although the eBiz portal makes it easier for some individuals and companies to setup in India, it does not do much for those that do not have experience working with the Indian government.
The eBiz portal is step in the right direction by the government. The initiative will undoubtedly improve India’s Ease of Doing Business ranking. Nevertheless, doing business in India remains sui generis – local support will remain mission critical for those that want to establish a business quickly and efficiently.
Asia Briefing Ltd. is a subsidiary of Dezan Shira & Associates. Dezan Shira is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in China, Hong Kong, India, Vietnam, Singapore and the rest of ASEAN. For further information, please email email@example.com or visit www.dezshira.com.
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