Key Details
The Competitors Foundation's report, India's Next Growth Frontier: Reducing Anti-Competitive Market Distortions to Build on India's 2010 to 2023 Reform Progress, says that India's biggest reform gains may already be behind it, making competition, investment and market openness the next frontier for sustaining growth.
Key Area | Key Findings |
|---|---|
Reform Progress | India improved from 82nd to 57th in the Anti-Competitive Market Distortions (ACMD) rankings between 2010 and 2023, driven largely by domestic reforms such as GST, the Insolvency and Bankruptcy Code (IBC) and trade facilitation. |
Economic Impact | Reducing remaining market distortions could generate an estimated US$173.6 billion in additional GDP over five years, including US$127.2 billion from easing investment restrictions and US$46.4 billionfrom improving competition policy. |
Remaining Domestic Barriers | Sectoral FDI caps, licensing restrictions and aspects of digital competition policy continue to limit market entry, investment, innovation and productivity. |
External Challenges | Indian exporters increasingly face non-tariff barriers through stricter SPS measures, technical standards and emerging carbon-related regulations in major export markets. |
Next Reform Agenda | The report advocates strengthening property rights, expanding domestic and international competition, reviewing investment restrictions and ensuring evidence-based regulation to sustain long-term growth. |
India's Reform Dividend Has Changed Its Character
India's broad structural reforms have already transformed much of the domestic business environment. Measures such as the Goods and Services Tax (GST), Insolvency and Bankruptcy Code (IBC) and trade facilitation reduced market distortions, strengthened competition and improved the efficiency of doing business. Those reforms helped move India significantly closer to the global market frontier. The next stage of economic progress, however, will depend less on introducing another generation of economy-wide reforms and more on addressing the specific barriers that continue to limit competition, investment and productivity.
Growth Now Hinges on How Competitive Markets Become
The remaining constraints are increasingly concentrated in the rules governing market entry, investment and business operations. Foreign investment restrictions, ownership caps, licensing requirements and regulatory uncertainty in digital markets continue to limit market contestability across several sectors. At the same time, Indian exporters face a growing web of non-tariff barriers abroad, with stricter regulatory standards and compliance requirements increasingly shaping access to major export markets. Together, these domestic and external frictions risk slowing productivity gains even as the broader reform agenda matures.
The Next Reform Phase Is About Removing Frictions, Not Launching New Flagship Reforms
Sustaining high growth now requires a more targeted reform strategy. Rather than another sweeping programme of liberalisation, the focus shifts to strengthening competitive markets by reviewing unnecessary restrictions on investment, ensuring proportionate and evidence-based regulation, and improving access to global markets through science-based trade rules and regulatory cooperation. The report presents these changes not as incremental adjustments, but as the next logical step in India's long-term reform journey—one that could unlock another phase of productivity, innovation and export-led growth.
What Are Anti-Competitive Market Distortions (ACMDs)?
Anti-Competitive Market Distortions (ACMDs) are government-imposed or government-supported policies that reduce competition and restrict voluntary market exchange. These include licensing requirements, investment restrictions, subsidies favouring incumbent firms, trade barriers and regulatory measures that discourage new entrants, innovation or efficient resource allocation. The report evaluates ACMDs across three pillars: property rights protection, domestic competition and international competition.
Policy Relevance
Signals a shift towards second-generation economic reforms, where improving competition and market contestability becomes as important as earlier structural reforms.
Highlights the potential economic gains from reviewing sectoral investment restrictions, particularly where they limit technology transfer, capital inflows and efficient business models.
Supports evidence-based competition regulation that protects consumers while preserving innovation, investment and dynamic market rivalry in the digital economy.
Emphasises the growing importance of addressing non-tariff barriers through science-based regulation, trade negotiations and international regulatory cooperation.
Suggests that strengthening property rights, reducing regulatory distortions and expanding competitive markets can reinforce India's long-term productivity and export competitiveness.
Follow the Full Report here: India’s Next Growth Frontier