EY India Chairman Rajiv Memani has called for urgent reforms in GST, tax dispute resolution, and foreign investment policies to maintain India's 7.8% economic growth. These changes aim to lower the cost of doing business, reduce tax uncertainty for investors, and strengthen supply chain resilience against global volatility.
India’s economy has demonstrated resilience, recording a growth rate of 7.8% in the first quarter of the 2026-27 fiscal year. Despite this positive momentum, industry leaders are highlighting the need for structural policy shifts to ensure this pace continues amidst complex global economic conditions. Rajiv Memani, Chairman and CEO of EY India, recently emphasized that sustained growth requires a targeted approach toward tax simplification and bureaucratic streamlining.
A primary focus of the proposed reforms is the Goods and Services Tax (GST) framework. While rate rationalization has been beneficial, businesses continue to face challenges regarding input tax credits, particularly under Section 17(5) of the Central GST Act, which restricts credits on several business inputs. Experts argue that removing these blocks would align India’s tax structure with international practices, reducing the financial burden on companies. Furthermore, implementing a 'one taxpayer, one audit' model could significantly ease the compliance fatigue that currently hinders businesses operating across multiple states.
The investment climate also remains a critical area for improvement. To attract consistent foreign direct investment, Memani suggested the creation of a high-level authority focused on clearing land acquisition and environmental hurdles, which often delay large-scale greenfield projects. Additionally, tax certainty is essential for long-term capital formation. With approximately ₹16 trillion in direct tax disputes currently pending at the appellate level, prioritizing dispute mediation and avoiding retrospective tax changes are viewed as vital steps to restore and maintain investor confidence.
From a risk management perspective, the geopolitical landscape presents significant challenges to industrial stability. Over-reliance on critical imports remains a vulnerability for many Indian sectors. To address this, there is a push to adopt more granular data tracking, such as mandating eight-digit HSN codes across all GST filings. This data could allow for real-time monitoring of supply chain dependencies, helping the government identify bottlenecks and address issues like global technology access or overcapacity in specific industries before they impact domestic manufacturing.
For investors, these policy recommendations reflect the broader challenges companies face regarding operational efficiency. High regulatory costs and procedural delays continue to influence the profitability and execution timelines of major projects, especially in sectors like pharmaceuticals and energy. Moving forward, the key monitorable will be how the government addresses these recommendations, specifically regarding the speed of single-window clearances and the resolution of the pending tax litigation pile-up, both of which are central to improving the ease of doing business in India.