DPIIT Shifts to Trust-Based Governance to Slash Business Red Tape
India's DPIIT is shifting to trust-based governance, slashing thousands of compliance rules to boost startups and attract record FDI.
In a major move to overhaul the ease of doing business, the Department for Promotion of Industry and Internal Trade (DPIIT), under the Ministry of Commerce and Industry, is transitioning from a rigid permission-based regulatory system to a trust-based governance model. This strategic shift aims to dismantle bureaucratic hurdles, support the burgeoning startup ecosystem, and attract higher levels of global investment by simplifying how businesses operate across India.
Massive Cleanup of Compliance Requirements
The government has undertaken a sweeping exercise to reduce the regulatory burden on entrepreneurs and corporations. According to an official statement, a staggering 47,957 compliance requirements have been reduced across various Central Ministries, States, and Union Territories (UTs). This cleanup was executed through four primary methods:
- Digitisation: 22,290 requirements have been moved online.
- Simplification: 16,141 rules were made easier to follow.
- Decriminalisation: 5,255 requirements no longer carry criminal penalties.
- Elimination: 4,271 unnecessary rules were scrapped entirely.
Furthering this mission, the Jan Vishwas Acts have decriminalised 900 provisions of Central laws. This includes 183 provisions across 42 Acts in 2023 and 717 provisions across 79 Acts in 2026, ensuring that minor technical lapses do not lead to criminal proceedings.
Fueling the Startup Engine
The DPIIT has significantly expanded its support for new ventures through the Startup India initiative. The impact is visible in the numbers: 2,50,046 startups have been recognised, contributing to the creation of over 25.42 lakh jobs across more than 770 districts.
The growth is not limited to major hubs. Interestingly, 52 per cent of these recognised startups hail from non-metro cities, signaling a democratization of entrepreneurship. Additionally, 48 per cent of these startups feature at least one woman director, highlighting a push toward gender diversity in leadership.
Financial Backing and Credit Support
To ensure startups have the necessary capital, the Credit Guarantee Scheme for Startups has provided guarantees for 532 loans totaling Rs 1,662.71 crore. To further ease the financial strain, the government has:
- Increased the maximum guarantee cover per borrower from Rs 10 crore to Rs 20 crore.
- Slashed the annual fee to 1 per cent for 27 designated "Champion Sectors."
Attracting Global Capital and Digital Ease
The shift toward a more open regulatory environment has yielded massive results in Foreign Direct Investment (FDI). Between FY 2014-15 and FY 2025-26, India attracted USD 843 billion in FDI—a 169 per cent increase compared to the USD 313 billion received in the preceding 12 years. The momentum peaked in FY 2025-26 with a record annual inflow of USD 94.53 billion.
The Rise of the National Single Window System (NSWS)
Digital clearances are now at the heart of India's reform agenda. The National Single Window System (NSWS) has evolved from a modest launch in September 2021 to a powerhouse of efficiency. The platform now offers 3,779 services (327 Central and 3,452 State services), a massive leap from the 142 Central approvals it started with.
Key achievements of the NSWS include:
- Processing 15,49,850 applications.
- Registering 5,76,778 businesses.
- Delivering over 8.5 lakh approvals.
- Providing access in 22 Indian languages.
- Integrating services from 32 Central Ministries and 34 States and UTs.
The portal also features a "Know Your Approvals" module, which acts as a guide for businesses to identify exactly which permissions are required to start and run their ventures.
Structural Labour Reforms
Beyond digital tools, the government is restructuring the legal framework of employment. This includes the consolidation of 29 complex Central labour laws into four streamlined Labour Codes. Additionally, licensing requirements for contract labour and factories have been modified to reduce procedural friction, making it easier for businesses to scale their operations across the country.