Doing Business is skin deep

Foreign investment patterns are a reasonably good proxy for the way Indian business invests

The 30-point-high jump up the Doing Business rankings masks the essential shallowness of the index as an indicator of the investment climate in the broad diversity of India. In terms of foreign direct investment (FDI), the principal reason for the government’s hawk-eye focus on this metric, it would be fair to say that the index is skin deep. 

The standard measure of success in attracting FDI is to track the aggregate inflows. But disaggregated data from the Department of Industrial Policy and Promotion, the entity that has worked hard to ensure India’s promotion in 2017, shows that FDI is so unevenly