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Latest data released by the Economist Intelligence Unit (EIU) revealed Singapore once again maintained its first place, with India recording a noticeably improved ranking that predicts the countries that will have the best business environment globally for the next 5 years. The data revealed that Canada and Denmark shared second place, with America and Switzerland on the fourth and fifth positions, respectively.
Among other countries that have seen a remarkable improvement in their business environment are Vietnam, Thailand, Belgium, Sweden, and Costa Rica. Whereas countries like China, Bahrain, Chile, and Slovakia have turned out to be a less-business friendly countries. The latest business enviornment ranking showed, North America and Western Europe remain the best places in the world to start a venture. Whereas, Asia ranks third, ahead of Eastern Europe, while Latin America remains more business-friendly than the Middle East and Africa.
Starting business in India easier than China & many other countries: Report
The latest ranking has shown that starting business in India has now become more easy as the country moves up to the sixth position globally, climbing from 14th place in 2018’22 to 10th place in 2023’27 among the 17 countries in the Asian region that took part in the survey. Doing business in India has become easy mainly due to the gains that the country has made in foreign trade and exchange controls, infrastructure, and technology readiness ratings. The top-ranked category for India is its market opportunities, backed by a large and growing domestic market.
Strong, stable economies and access to a large labour force in India are the main elements that have attracted investors. In addition, the country’s policy reforms have also made it easier to start a business in India.
“Over the past decade, global manufacturing supply chains have experienced a period of turbulence. Geopolitical tensions between the US and China, the rapid adoption of e-commerce, the COVID-19 pandemic, and the war between Russia and Ukraine have led to a reconsideration of strategies for shifting sourcing, diversifying supply routes, and localising production. Concerned about supply chain over-reliance on China, the “factory of the world” many companies are implementing or considering “China plus one”. Strategies aimed at building production across multiple markets,” the report said.
In the coming days, EIU researchers are expecting to see significant growth in areas such as infrastructure, taxation, and trade regulation that will boost investment. One of the main contributing factors to India’s advantage is its younger population, which promises a good labour force. By the end of 2030, India’s working-age population is expected to grow by almost 100 million, according to the EIU’s prediction.
Is China becoming less business-friendly place?
According to the latest ranking, Beijing is losing support from global investors due to regulatory changes, the statist implementation of economic policies, and increased local costs. The said set of conditions has caused China to fall behind 10 other countries and stand in the 11th position in the global ranking compared to last year.
EIU’s prediction also stated that China’s population will see a dip of 40 million to under 950 million. India’s median age of 28.4 compares well with China’s 38.4. The increase in population creates an additional incentive for the government to develop manufacturing to absorb additional workers.
How is Business Environment Ranking calculated?
Using a standardised analysis framework that works on 91 indicators, the EIU’s Business Environment Ranking (BER) measures the attractiveness of the business environment in 82 countries on a quarterly basis. The model works on 11 categories such as the political and macroeconomic environment, market opportunities, policies towards private enterprise and competition, taxes, financing, and the labour market.
Image: ANI
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