Context:

• Delhi’s winter air pollution is likely to intensify due to the combined effects of vehicular emissions, stubble burning, firecrackers and unfavourable meteorological conditions.
• An exceptionally strong El Niño event could worsen the situation by weakening winds, reducing rainfall and trapping pollutants near the ground.
• The challenge highlights the need to shift from fragmented, city-centric measures to science-based, regional airshed management.

Reassessing the Sources of Air Pollution:

• PM₂.₅ versus PM₁₀:
  • PM₂.₅ (fine particulate matter) consists of particles with a diameter of 2.5 micrometres or less. It can penetrate deep into the lungs and enter the bloodstream, posing serious health risks.
  • PM₁₀ consists of particles with a diameter of 10 micrometres or less and includes coarser dust particles.
  • According to the findings under SAFAR (System of Air Quality and Weather Forecasting and Research), the transport sector accounted for approximately 40% of Delhi’s PM₂.₅ emissions.
• Policy priorities and measurement gaps:
  • The National Clean Air Programme (NCAP) has historically emphasised reductions in PM₁₀ concentrations, encouraging attention to road dust and construction activities.
  • While dust control is necessary, an excessive focus on PM₁₀ reduction can divert attention from combustion-related sources such as vehicles, biomass burning and waste burning.
  • The key concern: Air-quality policies must address the pollutants most harmful to health rather than rely disproportionately on a single performance indicator.

Super El Niño - A Potential Winter Pollution Multiplier:

• El Niño:
  • It refers to the periodic warming of the central and eastern equatorial Pacific Ocean, which alters atmospheric circulation and influences weather patterns worldwide.
  • It does not directly generate pollution but can worsen air quality by creating conditions that restrict pollutant dispersion.
• How El Niño could aggravate Delhi’s pollution?
  • Weaker winds: Reduced wind speeds over northern India could prevent PM₂.₅ from dispersing, allowing emissions from vehicles, stubble burning, biofuels and open waste burning to accumulate.
  • Fewer western disturbances: They bring winter precipitation to northwestern India. If their frequency or influence declines, fewer rain events may remove pollutants from the atmosphere, prolonging dry and polluted conditions.
  • Temperature inversion and stagnant air: Stable atmospheric conditions and surface temperature inversions can suppress vertical mixing, trapping pollutants close to the ground and sharply increasing their concentrations.
• Together, these factors could produce prolonged and severe pollution episodes across Delhi and the Indo-Gangetic Plain.

Stubble Burning:

• The challenge of accurate monitoring:
  • Punjab and Haryana have experienced substantial rainfall deficits, affecting agricultural conditions.
  • Early monsoon rainfall in some areas enabled earlier paddy sowing, potentially advancing harvesting and the associated period of stubble burning.
  • Evidence suggests that some farmers may have shifted stubble burning from morning to evening.
  • MODIS-based fire detection, widely used for monitoring agricultural fires, may consequently miss some incidents because satellite observations capture fires only under particular observational conditions.
  • However, the actual effect of rainfall deficits on paddy yields, harvesting patterns and the extent of stubble burning remains uncertain.
• Policy implication:
  • Authorities should strengthen ground-level verification and use multiple monitoring methods rather than rely exclusively on satellite fire counts.
  • Accurate measurement is essential for assessing the effectiveness of mitigation measures.

The Critical November Pollution Window:

• The festive season, including Diwali-related firecracker emissions, coincides with winter pollution and the stubble-burning period.
• Historically, November 5–10 has been particularly challenging for Delhi’s air quality.
• Weak winds could create an atmospheric trap in which emissions from vehicles, agricultural fires, firecrackers and other sources accumulate rapidly.
• Preventive measures should therefore be intensified during this critical period, including -
  • Strict enforcement of firecracker restrictions.
  • Timely support for farmers to adopt alternatives to burning.
  • Reduced vehicular emissions and effective public transport.
  • Targeted restrictions on polluting activities when meteorological conditions deteriorate.
  • Real-time monitoring and coordinated emergency responses.

Way Forward - From City-Centric to Airshed-Based Management:

• Short-term measures: Implement winter action plans, strengthen pollution forecasting, monitor agricultural fires more accurately and coordinate emergency interventions across neighbouring States.
• Medium-term measures: Expand access to crop-residue management machinery, incentivise in-situ and ex-situ residue utilisation, improve public transport and strengthen regional emission inventories.
• Long-term structural reforms:
  • Airshed-based governance: Treat the Indo-Gangetic Plain as an interconnected pollution system rather than managing Delhi in isolation.
  • Institutional coordination: Establish mechanisms for joint planning and accountability among States and urban and rural authorities.
  • Science-led policymaking: Align funding and performance indicators with health-relevant pollutants, particularly PM₂.₅, alongside PM₁₀.
  • Climate-informed planning: Integrate seasonal forecasts, climate projections and meteorological conditions into pollution-control strategies.

Air-Quality Research and Management:

• The National Air Quality Resource Framework of India (NARFI), developed by the National Institute of Advanced Studies (NIAS) under the Office of the Principal Scientific Adviser, provides a framework for strengthening air-quality research and management.
• Where a full airshed is too extensive for practical implementation, smaller satellite airsheds can offer operational units for coordinated action.

Conclusion:

• Delhi’s winter pollution is not merely a local emissions problem; it is the product of regional pollution sources interacting with adverse weather and climate variability.
• A durable solution requires coordinated airshed governance, reliable scientific monitoring and sustained action across short-, medium- and long-term horizons.

Why in the News?

• The 57th meeting of the Goods and Services Tax (GST) Council recommended major process reforms to simplify compliance, accelerate refunds, reduce litigation-related burdens and improve certainty for businesses.

What’s in Today’s Article?

• GST Reforms 2026 (Background, Key Reforms Proposed, etc.)

Background: From Rate Rationalisation to Process Reforms

• The GST Council’s September 2025 exercise focused on rationalising tax rates on goods and services.
• Its latest meeting, held in October 2026, shifted attention towards simplifying procedures, improving taxpayer experience and reducing compliance-related friction.
• Union Finance Minister Nirmala Sitharaman stated that most GST-related issues concerning rates and processes had been addressed, while leaving the possibility of further reforms open.
• No GST rate changes were made at this meeting. The Council indicated that rate decisions would generally be considered annually and implemented from the beginning of the subsequent financial year.

Faster Refunds and Improved Working Capital

• One of the most significant reforms concerns the processing of GST refunds and accumulated Input Tax Credit (ITC).
• System-based refund processing
  • The Council recommended a system under which 90% of eligible refund claims would be sanctioned automatically within three working days of acknowledgement, compared with the earlier seven-day timeline for most refunds.
  • Refund acknowledgement is also proposed within 10 days, compared with the existing 15 days.
• Refunds under the inverted duty structure
  • An inverted duty structure arises when the tax rate on inputs is higher than the tax rate on the final output, resulting in accumulated ITC.
  • The Council recommended widening refund eligibility to include:
    • Input services: The change can be availed from November 1, 2026.
    • Capital goods: Refunds relating to eligible capital goods, such as plant and machinery, will be spread over 60 months, with the change scheduled to take effect from April 1, 2027.
  • These measures are expected to benefit sectors such as FMCG, pharmaceuticals and food processing, where accumulated tax credits can constrain working capital.

Simplified GST Registration and Returns

• The Council recommended improvements to registration procedures, including greater certainty about the documents required.
• According to the government, 61% of taxpayers already receive automatic registration within three working days. The upgraded system is intended to simplify the process for remaining low-risk applicants by reducing unnecessary queries and rejections.
• Other proposed measures include:
  • Simplified registration for small suppliers selling through e-commerce platforms.
  • Easier amendments and cancellations of registrations.
  • An option for small e-commerce sellers to register in a single State rather than in every State where they sell goods.
  • An optional annual return-filing scheme for businesses with turnover up to Rs. 5 crore that supply directly to consumers.
• The annual return-filing scheme has received in-principle approval, but the Council will consider the final decision at a subsequent meeting.

Changes to Arrest and Prosecution Provisions

• The Council recommended removing the arrest powers of GST officers and increasing the prosecution threshold from Rs. 1 crore to Rs. 5 crore.
• The stated objective is to distinguish more clearly between tax-related disputes and conduct involving criminality.
• The Finance Minister emphasised that prosecution should follow the establishment of a prima facie criminal case rather than an officer making an arrest merely in anticipation of possible wrongdoing.
• The Council also recommended reducing the maximum general penalty from Rs. 25,000 to Rs. 10,000.
• For non-fraud cases, it recommended a lower penalty of 5% and removal of the minimum penalty requirement of Rs. 10,000.

Greater Safeguards for Inter-State Goods Movement

• The Council recommended restrictions on the interception and inspection of goods moving between States.
• Under the proposed framework, vehicles carrying goods may be stopped only by tax officers of the supplier State or recipient State, and not by officers of an intermediate State.
• Interception would require:
  • Specific intelligence
  • Due authorisation by an officer at Joint Commissioner level
  • The objective is to prevent arbitrary checks and detention of goods during inter-State transportation
• Such safeguards can improve logistics efficiency, reduce delays and strengthen the predictability of supply chains.

Faceless Assessment and Digital Tax Administration

• Separately, the Union government announced plans to introduce faceless assessment for Central GST taxpayers registered in multiple States.
• A framework is to be issued for public consultation before Budget 2027, with implementation planned during 2027-28.
• Faceless assessment can reduce direct interactions between taxpayers and assessing officers, potentially improving consistency and limiting opportunities for discretionary action.

Relief for Service Exports and E-Commerce

• Export of services
  • The Council recommended aligning GST treatment with established business practices for services supplied through overseas branches.
  • The changes are intended to enable qualifying transactions to receive export treatment where the relevant conditions are met.
  • This is significant because services exports are an important source of foreign exchange for India.
• E-commerce delivery services
  • The Council clarified that delivery services provided by unregistered riders through e-commerce platforms would attract GST at 5%.
  • The clarification seeks to reduce differences in tax treatment arising from different contractual arrangements, so that the tax treatment reflects the service actually delivered.

Context

• The Election Commission of India (ECI) has historically strengthened Indian democracy by expanding universal adult franchise.
• Since the first general election of 1951–52, it has worked to ensure electoral participation irrespective of literacy, income, gender or social background.
• However, the Special Intensive Revision (SIR) of electoral rolls has raised concerns about mass deletions, procedural irregularities and the exclusion of eligible voters.

The Scale of Voter Deletions

• Approximately 13.37 crore names were deleted at the draft stage across 30 States and Union Territories during three phases of the SIR.
• Deletion rates increased from 8.3% in Bihar to 12.9% in Phase 2 and 17% in Phase 3. Delhi recorded 32.8%, while Telangana recorded 21.7%.
• In Delhi, the draft roll contained 97.54 lakh electors, barely exceeding the 94.95 lakh people who voted in the 2025 Assembly election.
• In 24 constituencies, the draft roll contained fewer electors than the number who had voted previously.

Flaws by Design

• Reversal of the Enumeration Process
  • The ECI’s 2023 Manual on Electoral Rolls prescribes household enumeration and gives evidentiary value to existing electoral entries when eligibility is questioned.
  • The SIR, however, shifts the burden onto voters to establish their eligibility through old records or documents.
  • People who could not be contacted, complete forms or produce required information risked deletion, even if they had voted previously.
  • This approach undermines presumption of eligibility and places excessive responsibility on citizens.
• Difficulties in Restoring Deleted Voters
  • Deleted voters must often apply through Form 6, normally intended for new electors.
  • This creates unnecessary barriers and prevents clear differentiation between new enrolments and restored voters.
  • A simple, accessible correction mechanism is essential to protect legitimate electoral participation.
• Arbitrary Logical Discrepancies
  • Software comparisons with decades-old records flagged spelling variations, family relationships and age differences.
  • In West Bengal, 60 lakh names were flagged, and judicial officers removed 27 lakh.
  • Appellate tribunals restored 93% of the cases they decided, indicating significant scope for errors.
  • By early September, only 1.22 lakh of more than 38 lakh appeals had been decided.
  • Automated scrutiny must not replace individual verification, notice and fair hearings.
• Excessive Centralisation
  • The increasing use of ERONet, the central electoral database, has raised concerns about transparency.
  • State officials reportedly cannot always view centrally made changes. Clear responsibility, traceable records and effective oversight by statutory Electoral Registration Officers are essential.

Unequal Impact Across Social Groups

• In Bihar, more women than men were deleted, particularly those aged 18–29 and classified as permanently shifted.
• The gender ratio fell from 907 in the 2024 Lok Sabha rolls to 892 after revision.
• In West Bengal, the SABAR Institute estimated that Muslims constituted 65% of those deleted after adjudication for logical discrepancies, despite representing around 27% of the State’s population.
• These disparities warrant independent investigation. Electoral fairness requires protection against disproportionate exclusion, particularly among women, migrants, minorities and young voters.

A Deferential Court

• The Supreme Court upheld the SIR on May 27, after Phase 2 had ended and Phase 3 had been notified.
• Critics question whether the judgment adequately examined the statutory basis and consequences of the exercise.
• They argue that Section 21(3) of the Representation of the People Act, 1950, permits special revision for a constituency or part of one, while the Court allowed a State-wide exercise.
• The judgment has also been criticised for insufficiently considering less harmful alternatives and the precedent in Lal Babu Hussein (1995), which emphasised procedural safeguards against wrongful deletion.
• Judicial oversight must balance electoral independence with constitutional protection of voting rights. 

Dissent Within the Election Commission

• Reports indicate that Election Commissioners Sukhbir Singh Sandhu and Vivek Joshi raised at least 14 objections between October 2025 and August 2026.
• One concerned changes to Form 6 requiring applicants to establish links to previous SIR rolls without corresponding rule amendments.
• Such decisions demand legal clarity, transparent deliberation and institutional accountability.
• Internal objections should trigger meaningful review rather than superficial administrative changes.

The Way Forward

• The Supreme Court should reconsider significant legal concerns and examine an independent audit of finalised rolls.
• Door-to-door verification by Booth Level Officers should be strengthened, with election officials bearing primary responsibility for identifying eligible voters.
• Deleted electors must receive notice, clear reasons and accessible appeals.
• The ECI should publish transparent data on deletions, additions, restorations and appeals, including disaggregated information on gender, age and migration.
• Centralised databases must remain auditable, while urgent safeguards should prevent eligible citizens from losing their voting rights during election periods.

Conclusion

• The SIR exposes a fundamental tension between electoral accuracy and democratic inclusion. Removing ineligible entries is legitimate, but doing so must not exclude genuine voters through arbitrary procedures or excessive documentation requirements.
• The ECI’s credibility depends on transparent administration, judicial scrutiny and effective remedies.
• An electoral revision succeeds only when it removes ineligible entries without disenfranchising eligible citizens.

Why in news?

The US government has suspended several large Indian IT firms (Cognizant, Infosys, Tata, Wipro, HCL, and Capgemini) from a key programme that lets skilled foreign workers gain permanent residency, citing alleged fraud and claiming foreign workers took jobs at the cost of American workers.

This is a major blow for Indian professionals looking to work at these companies in the US. Last month, the US had already announced Cognizant’s suspension, without specifying the allegations, the number of applications affected, or the duration.

What’s in Today’s Article?

• Part of a Broader Crackdown
• Understanding PERM
• How This Affects Indian Workers?

Part of a Broader Crackdown

• This action represents a clear broadening of the crackdown on foreign workers that has become central policy under President Donald Trump.
• Technology and IT services companies face particularly heightened scrutiny over their reliance on foreign workers.
• US authorities have stepped up investigations into alleged misuse of both the H-1B and PERM programmes, including claims of:
  • Wage undercutting
  • Fraudulent filings
  • Displacement of American workers
• This scrutiny matters enormously for Indian professionals, who account for a large share of H-1B beneficiaries and employment-based Green Card applicants.
• The US administration’s core justification is that foreign workers hired by these companies reduced job opportunities for Americans.
  • As per a report, since 2009, the impacted companies have requested permanent residency for almost 3 million foreign workers, receiving over 230,000 H-1B visa approvals and over 100,000 permanent labour certifications.
  • The US administration characterised this as hundreds of thousands of jobs that were taken from American workers.

Understanding PERM: The Programme at the Centre of This

• PERM (Program Electronic Review Management) is the system through which employers generally obtain labour certification before sponsoring a foreign employee for an employment-based Green Card.
• Key Features
  • Unlike a visa application (made primarily by an individual), PERM filing is done by the employer on behalf of the worker.
  • Before filing, the employer must obtain a prevailing wage determination for the position and carry out prescribed recruitment.
  • The process is meant to establish that permanently hiring a foreign worker will not adversely affect job opportunities, wages, or working conditions of US workers.
  • Once the Labour Department certifies the application, the employer can proceed to the next stage of the Green Card process.
• PERM vs H-1B — An Important Distinction
  • H-1B is a temporary, non-immigrant work visa allowing US employers to employ foreign professionals in specialty occupations.
  • PERM is part of the process for obtaining permanent residency — a fundamentally different track.

How This Affects Indian Workers?

• For employees whose Green Card process hasn’t yet reached the PERM filing stage: The immediate consequence is delay.
  • They cannot make fresh PERM filings while the suspension is in place.
  • This means they cannot secure a priority date or begin moving through the employer-sponsored Green Card process.
• Why This Hits Indians Especially Hard: India already faces a severe backlog.
  • In the US State Department’s September 2026 Visa Bulletin, the EB-2 category (Employment-Based Second Preference) for India was listed as “unavailable” for final action.
  • The EB-3 final-action date was January 1, 2014 — meaning applicants from over a decade ago are still being processed.
  • The system also imposes per-country limits on employment-based Green Cards, disproportionately affecting high-demand countries like India.
• An Additional H-1B Complication
  • US rules allow certain H-1B holders to extend their stay beyond the normal six-year limit if a labour certification was filed sufficiently early.
  • For workers approaching this six-year deadline, being unable to start the PERM process could become a serious problem.
  • Workers who already have approved petitions and are merely waiting because a Green Card number is unavailable are in a different position — they can, subject to rules, still qualify for H-1B extensions of up to three years at a time.

Conclusion

The PERM suspension doesn’t cancel existing Green Card queues, but it freezes new entries into them — and for Indian applicants already facing a decade-plus backlog, a freeze functions much like a setback.

Framed by Washington as closing a fraud loophole, the move lands squarely on the companies and workers most dependent on this pathway: Indian IT professionals, for whom the priority date is often the only thing standing between temporary status and permanent residency.

Why in news?

Every year around this time, air pollution in North India, particularly Delhi, dominates public discourse. Stubble burning by farmers is one of the most cited reasons for the worsening Air Quality Index (AQI).

Experts argue that the practice is not simply a farmer’s bad choice — it is the result of legal, technological and economic factors interacting together.

What’s in Today’s Article?

• What Is Stubble Burning?
• The Water Crisis That Triggered a Law
• How PPSSWA 2009 Unintentionally Caused the Timing Shift?
• Why Farmers Keep Growing Paddy and Wheat Anyway?
• Technical Solutions and Their Limits
• Policy Responses: Punjab vs Haryana
• The Measurement Problem

What Is Stubble Burning?

• Stubble burning means setting fire to crop residue — the lower parts of plants left after harvesting.
• It is prevalent from early October to late November across northwest India, especially Punjab, Haryana, and parts of Uttar Pradesh.
• It is mainly associated with paddy straw, and Punjab and Haryana together produce around 29 million metric tons of it.
• Why It Matters for Health and Soil?
  • Releases large amounts of particulate matter, carbon monoxide, volatile organic compounds (VOCs), and other carcinogenic substances, forming a thick smog.
  • Causes loss of soil fertility by depleting nitrogen, sulphur, potash, phosphorus and other micronutrients.
  • The heat generated causes loss of soil moisture and organic content, which in turn increases fertiliser use in the next crop cycle.
• Not A New Practice
  • Stubble burning has existed in Punjab since the late 1970s and early 1980s, following the introduction of combine harvesters, which leave plant residue behind.
  • What has changed is its timing — now coinciding with winter months, following the enactment of the Punjab Preservation of Sub-Soil Water Act, 2009 (PPSSWA 2009).

The Water Crisis That Triggered a Law

• In 2012, nearly 73% of Punjab’s cropped area was irrigated using groundwater. There was a deficit of 14.31 billion cubic metres, met through excessive groundwater withdrawal.
• Groundwater levels in Punjab declined at an alarming 0.36 metres annually between 1999 and 2009.
• A landmark NASA GRACE satellite study (2009) found the Punjab-Haryana-Rajasthan region lost 109 cubic kilometres of groundwater between 2002 and 2008 alone — then considered the largest groundwater depletion event in the world.

How PPSSWA 2009 Unintentionally Caused the Timing Shift

• The Punjab Preservation of Sub-Soil Water Act (PPSSWA) aimed to prevent rapid groundwater depletion by prohibiting early paddy sowing and transplantation before the monsoon arrived.
• Farmers were barred from sowing paddy before May 10 and transplanting before June 10. Stringent punishments were prescribed for this.
• These sowing restrictions pushed the paddy harvest to late October/early November, leaving farmers just a 10–15-day window to prepare fields for wheat.
• The high-yielding PUSA-44 variety, which takes 150–160 days to harvest, narrowed this window further. Combine harvesters leave about a foot of stubble behind, and manual clearing is time-consuming and expensive.
• Together, these factors made stubble burning almost a necessity.

Why Farmers Keep Growing Paddy and Wheat Anyway?

• The deeper question: why do farmers persist with these crops despite strict laws and falling groundwater? The answer lies in the incentive structure.
  • Paddy procurement (2012–2024 average): 37% nationally, but 87% in Punjab and 74% in Haryana — more than double the national average.
  • Wheat procurement: 30% nationally, versus 70% in Punjab and 63% in Haryana.
    • These national averages already include Punjab and Haryana — excluding them would make the gap even starker.
• This assured procurement provides guaranteed income, discouraging diversification.
• Additionally, power is free in Punjab and almost free in Haryana, further encouraging water-intensive paddy and wheat cultivation via groundwater extraction.

Technical Solutions and Their Limits

• In-Situ Measures: Crop Residue Management (CRM) machines — Happy Seeders, Super Seeders, Rotavators; Short-duration rice varieties and direct seeding of rice.
• Ex-situ Measures: Converting residue into bio-ethanol and compressed biogas.
• The problem with both:
  • Happy Seeders/Super Seeders need an expensive 60-HP tractor, often idle for most of the year. Even hiring one costs ₹10,000 with a long waiting period.
  • Ex-situ measures cost ₹1,500–₹2,500 per acre — a significant expense for many farmers.

Policy Responses: Punjab vs Haryana

• National Green Tribunal (2018): Ruled that farmers who burn stubble could be excluded from MSP policy. The Supreme Court upheld this in 2023.
• In 2025, CPCB deployed 31 flying squads across 18 districts of Punjab and 13 of Haryana, involving 10,500 field functionaries in Punjab and 10,000 in Haryana.
• CAQM has directed complaints to be filed against officials for inadequate monitoring.
• However, the Parliamentary Committee on air quality recommended that penalising farmers should be a last resort, instead suggesting a minimum price covering all costs for selling stubble for ex-situ use.
• Punjab’s Approach
  • Relied mostly on in-situ CRM-based measures, with limited ex-situ initiatives.
  • CAQM noted in 2025 that Punjab still needs improvement in timely CRM machinery availability, support for CBG (compressed biogas) plants, and better enforcement.
• Haryana’s Approach
  • Adopted an incentive-based model, aligned with the Parliamentary Panel’s recommendations:
    • ₹1,000/acre for CRM use.
    • ₹4,000/acre for direct seeding of rice.
    • ₹7,000/acre for diversification to alternate crops.
    • Additional incentives to panchayats for good performance.

The Measurement Problem

• Punjab and Haryana reportedly achieved a 90% reduction in stubble-burning incidents during 2025 paddy harvesting compared to 2022. But this figure needs caution.
• Why The Data May Be Misleading?
  • The CREAMS protocol (Consortium for Research on Agroecosystem Monitoring and Modeling from Space) relies on NASA’s MODIS and VIIRS satellites — polar satellites observing India only between 10:30 am and 1:30 pm, capturing only active fires at that moment, not total fires over 24 hours.
  • A 2025 report, using multiple satellites, found the actual reduction was more gradual — around 30%, not 90%.
  • A November 2025 study, led by ISRO scientists, found farmers have shifted to burning stubble in the evening specifically to avoid polar satellite detection windows.

Conclusion

Stubble burning survives not because farmers lack alternatives, but because the system rewards exactly the behaviour it then punishes — assured procurement and free power push farmers toward paddy, while a water-conservation law compresses their harvest window to days.

Haryana’s incentive-based model shows a more promising direction than Punjab’s penalty-heavy approach, but even the headline “90% reduction” may be a measurement artifact, not a real one.

A lasting fix needs genuine crop diversification, better residue economics, and satellite monitoring that farmers can’t simply outrun by burning after dark.

Context:

• India recently hosted the 18th BRICS Summit in New Delhi, in September 2026. It was a success.
• Now, PM Narendra Modi plans to visit Canada and Brussels in December. India expects to sign formal Free Trade Agreements (FTAs) during these visits. This shows India is steadily building its global economic presence.
• This article highlights the challenges facing India’s inbound investment framework, examining why rising FDI commitments do not always translate into actual capital deployment.

The Headline Numbers

• India’s investment trajectory has genuinely improved:
  • RBI data: Gross inward FDI reached a record $94.8 billion in FY26.
  • UNCTAD’s World Investment Report 2026: India ranks 11^th among the world’s top FDI destinations, following a 44% rise in inflows.

The Global Lag, Reflected in India

• Despite the headline growth, UNCTAD’s report reveals that globally, international project finance remains roughly a quarter below its 2021 peak — a trend India mirrors.
• Case in point — greenfield data centre investments (a focal sector across economic partnerships):
• 
• This raises the central question: what creates the lag between committed investment and its actual deployment in greenfield projects?

The Real Negotiation Is Internal

• Investors believe incremental reform can ease this lag. Crucially, the remaining negotiations are often internal — between the Centre and States, between DPIIT and line Ministries, or between central rules and State notifications needed to enforce policy.
• Resolving these bottlenecks would benefit domestic enterprises as much as foreign investors.

Judicial Bottlenecks

• Commercial dispute resolution has improved but remains strained:
  • India’s courts had nearly 48 million pending cases as of April 2026, including about six million in High Courts.
  • Reforms like the Commercial Courts Act, 2015 and the Mediation Act, 2023 have helped. As a result, when companies write contracts now, they increasingly choose institutional arbitration as their standard method for resolving disputes.
  • Smaller enterprises, however, still rely heavily on courts — making better staffing of commercial benches and mediation centres essential to reducing resolution times.

The Labour Codes: A Case Study in Fragmentation

• Parliament’s consolidation of 29 central labour laws into four codes was a legislative milestone, with Central Rules notified in May 2026.
• But since labour sits on the Concurrent List, implementation depends on State notifications.
  • Gujarat moved swiftly, notifying rules under all four codes.
  • Other industrial states are still finalising theirs.
  • For enterprises designing national HR frameworks, this creates a messy transitional phase of varied state timelines.

Progress on Tax Certainty

• The Taxation Laws (Amendment) Act, 2021 effectively ended the ghost of retrospective tax disputes, withdrawing outstanding demands against entities like Vodafone and Cairn Energy.
• The relaunched Vivad se Vishwas scheme has helped reduce the broader direct-tax litigation backlog.

Compliance Recalibration: The QCO Example

• Mandatory BIS certification under Quality Control Orders (QCOs) was designed to protect consumers, but the framework expanded extensively.
  • The Gauba Committee found QCOs had grown from fewer than 70 to nearly 790, covering raw materials and intermediate goods.
  • For imported components, compliance costs rose to ₹20 lakh, with six- to eight-month certification timelines disrupting domestic MSME supply chains.
  • Government response: QCOs were withdrawn on critical intermediate goods, including PVC, aluminium and zinc, providing relief to manufacturers.

Trade Pacts and Investor Protection Gaps

• India’s modern trade agreements now introduce binding investment targets:
  • The EFTA agreement sets a historic $100-billion target, but investor-protection mechanisms remain a work in progress.
  • The India-EFTA TEPA lacks an independent bilateral investment dispute mechanism.
  • Switzerland is separately negotiating a bilateral investment treaty, which could inform future negotiations with the EU and UK.

Approval Speed: Still Uneven

• DPIIT is the nodal agency, but not the final decision-maker on approvals.
• A revised SOP issued in May 2026 sets a 12-week deadline, but compliance remains uneven.
• Positive example: Large-scale projects like Tata Electronics’ semiconductor facility in Dholera, Gujarat, show how effective administrative coordination can accelerate capital deployment.

Reform Lessons from Past Successes

• External Benchmark — Singapore’s CECA: Has facilitated over $195 billion in cumulative FDI since 2000, including $19.8 billion last year. Its non-discrimination and investor-protection frameworks offer a useful blueprint for India’s treaty negotiations.
• Domestic Benchmark — the mobile-phone industry: Demonstrates the potential of coordinated policy:
  • Production grew 33-fold since FY15 — from ₹180 billion to ₹6.27 trillion.
  • Exports reached ₹2.59 trillion.
  • India is now the world’s second-largest mobile-phone manufacturer by volume, meeting 99.2% of domestic demand through local production.

Conclusion

• India’s rise to the 11th-largest FDI destination and the world’s second-largest mobile-phone manufacturer shows real resolve in tackling internal bottlenecks.
• But the mobile-phone success and the stalled labour-code rollout sit side by side as proof that coordination, not capital, is now India’s binding constraint.
• The next phase of reform will be won or lost less in trade negotiating rooms abroad and more in the everyday friction between Central rules and State notifications at home.