India has taken significant steps to reduce the regulatory
variation between its 28 states to win over both domestic and
international investors.
The country's central government has promoted the concept of
competitive federalism by incentivising each state to become the
best place to set up and operate a business. Some Indian state
governments have offered electricity subsidies, waived – or
partially waived – stamp duty on land registrations
while centrally, reduced corporate tax rates and direct tax
'holidays' are on the table for units set up in Special
Economic Zones (SEZs) in specified states for certain
industries.
The approach appears to be working. Apple is set to invest $1 billion in India
through its partners, while Kia Motors intends to increase investment in the country to $2
billion by 2021.
