Is It Getting Costlier To Do Business In India? 47% of Companies Say 'Yes' - Full Report

Indian business houses are grappling with rising operational costs, with nearly half of the companies surveyed by the Associated Chambers of Commerce and Industry of India (Assocham) reporting a moderate increase in the Cost of Doing Business (CoDB). The findings come at a time when global uncertainties are acting as a dampener on supply chains, interest rates, and trade flows.

According to the survey, 47% of respondents stated that there is a moderate uptick in CoDB, while around 37% observed a significant rise. The key cost pressures identified in the survey include elevated infrastructure expenses, high financing costs, and a shortage of skilled labour — all of which are impacting the company's bottomlines and slowing operational momentum.

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For larger enterprises — those with annual revenues above Rs 250 crore — logistical bottlenecks, infrastructure-related spending, expensive credit, and manpower challenges remain major obstacles.

Meanwhile, smaller firms, with turnovers under Rs 250 crore, maintained that skilled labour shortages, compliance complexities, and the cascading effect of indirect taxes as additional hurdles.

Furthermore, ASSOCHAM added that research & development, reducing export finance costs, improving Rupee trade competitiveness, enhancing logistics efficiency, and ESG related requirements are some of the factors that will help India to attain the goal of becoming a US$ 5 trillion economy by 2030.

“Indian industry shows potential to contribute to India’s economic growth. However, tapping into this potential will require targeted policy efforts, infrastructure development, and other related initiatives. The current business outlook is cautiously optimistic and expects that reforms will yield significant improvements in the export ecosystem,” Assocham stated.

Despite recognizing the government’s Production Linked Incentive (PLI) scheme as a promising initiative, only 15% of the total respondents and 32% of exporters said they had derived tangible benefits from it. This suggests that while the scheme holds potential, it may require broader outreach and industry-specific alignment to maximise its impact.