India’s structural reforms over the past decade have improved its economic competitiveness, helping the country climb 25 places in a global ranking that measures anti-competitive market distortions, according to a report by Competere Foundation, an independent policy and advocacy group.
The report, India’s Next Growth Frontier: Reducing Anti-Competitive Market Distortions to Build on India’s 2010–2023 Reform Progress, released on Thursday, found that India improved its position from 82nd in 2010 to 57th in 2023 in Competere’s Market Distortions Performance Index, making it one of the strongest structural reformers among the economies studied.
The study attributes the improvement to a series of domestic economic reforms, including the implementation of the Goods and Services Tax (GST), the Insolvency and Bankruptcy Code (IBC), improvements in the business environment and trade facilitation measures that have made India’s domestic market more competitive and efficient.
The report estimates that the reduction in market distortions has lowered India’s projected five-year gross domestic product () per capita loss by 11 percentage points. Since this reflects a long-term measure, it translates into roughly an additional 1% annual gain in GDP per capita resulting from reforms undertaken between 2010 and 2023.
“Between 2010 and 2023, India moved materially closer to the frontier of voluntary exchange and competition on the merits,” the report said, noting that domestic competition accounted for the bulk of the improvement.
According to the study, India historically suffered from regulatory bottlenecks and fragmented domestic markets that constrained investment and productivity. Reforms over the past decade have eased many of these constraints.
Among the key drivers cited are , which unified India’s indirect tax system and reduced internal fiscal fragmentation, and the IBC, which strengthened insolvency resolution and improved the reallocation of productive assets. The report also highlighted India’s improvement in the World Bank’s Doing Business rankings, where the country rose from 142nd in the 2015 edition to 63rd in 2020.
Trade facilitation reforms also contributed to India’s improved standing. These include initiatives such as the Indian Customs Electronic Gateway, the Single Window Interface for Facilitating Trade, the Authorised Economic Operator programme, Direct Port Delivery, Direct Port Entry and wider deployment of risk-based customs systems, which have reduced transaction costs for exporters and importers.
The report, however, said India’s reform journey remains incomplete, identifying external regulatory barriers and domestic investment restrictions as the next major obstacles to sustaining higher growth.
It estimates that the remaining market distortions impose an economic cost of about $173.6 billion over five years, equivalent to around 4.2% of GDP.
Foreign investment restrictions account for the largest share of these losses at an estimated $127.2 billion, while evolving competition policy—particularly in digital markets—accounts for another $46.4 billion.
According to the report, India’s foreign framework continues to impose sector-specific caps, approval requirements and business model restrictions that limit investment, productivity and competition. Retail and e-commerce are highlighted as sectors where restrictions on inventory-based models and multi-brand retail investment may constrain efficiency, logistics and consumer welfare.
The study also cautioned against competition regulation that could discourage innovation and investment in the digital economy. It argued that enforcement should remain evidence-based and focused on demonstrable consumer harm rather than the size or market position of firms.
Beyond domestic reforms, the report urged India to actively challenge what it described as expanding regulatory barriers in overseas markets, particularly in Europe. It warned that increasingly stringent sanitary and phytosanitary standards, technical regulations and sustainability requirements could undermine market access for Indian exporters despite concessions secured under free trade agreements.
The report recommends that India work with other major exporting nations to promote science-based standards, mutual recognition and regulatory cooperation while resisting regulatory frameworks that unnecessarily restrict trade.
The study was released during a discussion organised by the Centre for Trade and Investment Law (CTIL) at the Indian Institute of Foreign Trade in collaboration with the Competere Foundation. It argues that India’s strongest case for pursuing another generation of reforms lies in the success of those already implemented.
“The 2010 to 2023 record shows that reducing internal frictions can move the economy closer to the frontier of undistorted markets,” the report said, adding that extending reforms to foreign investment rules, competition policy and external trade barriers could further improve productivity, attract higher-quality investment and strengthen India’s position in the global economy.