The Lift Line
“Crucially, resolving these operational bottlenecks would benefit domestic enterprises as much as foreign investors.” (Bharat Joshi, The Hindu)
Why This Editorial Matters for Your Exam
This op-ed in The Hindu of 9 October 2026 is by Bharat Joshi, Director of ACTL, a logistics company, and CEO of J Curve Ventures, an advisory firm. It takes a headline every aspirant will see, record foreign direct investment (FDI), and asks the harder question: why does committed investment take so long to become factories and data centres? Joshi’s answer is that India’s remaining “negotiations” are internal: between the Centre and the States, between Ministries, and between rules on paper and rules in force.
That makes it a ready-made map of the investment climate for GS3, touching five topics you study separately: the labour codes, Quality Control Orders (QCOs), commercial courts and mediation, retrospective tax, and investment treaties. For context, this site discussed QCOs on intermediate inputs on 24 September and India’s Model Bilateral Investment Treaty (BIT) on 3 October; this piece supplies the context that connects them.
GS Paper 3: Indian economy and issues relating to mobilisation of resources, growth and development; investment models; effects of liberalisation on the economy. GS Paper 2: Bilateral agreements affecting India’s interests; federal relations.
New to this topic? Start here: the basics in plain words (revision card 1 of 8)
Background and Context
The headline numbers (as Joshi cites them)
| Indicator | Figure | Source Joshi cites |
|---|---|---|
| Gross inward FDI, FY26 | Record $94.5 billion (Joshi gives $94.8 billion) | RBI Annual Report 2025-26 |
| India’s rank among top FDI destinations | 11th, after a 44% rise in inflows | UNCTAD, World Investment Report 2026 |
| Greenfield data-centre investment, first three quarters of 2025 | India about $7 billion (top 10, behind Thailand and Spain) | UNCTAD report |
| The same, for comparison | South Korea $21 billion; United States $29 billion; France $69 billion | UNCTAD report |
Gross is not net. “Gross inward FDI” counts the money coming in. Net figures subtract money taken out, so a question that quotes one cannot be answered with the other. Check which measure a source uses.
The four labour codes
For background: according to the Press Information Bureau (PIB), the four codes came into force on 21 November 2025, rationalising 29 existing labour laws:
| Code | Year |
|---|---|
| Code on Wages | 2019 |
| Industrial Relations Code | 2020 |
| Code on Social Security | 2020 |
| Occupational Safety, Health and Working Conditions Code | 2020 |
PIB also records that “Labour” as a subject is in the Concurrent List of the Constitution, and that under the codes the power to make rules rests with both the Central Government and the State Governments. That is the hinge of Joshi’s labour argument: the codes bite on the ground only as each State notifies its rules.
The India-EFTA TEPA
For context, the India-EFTA Trade and Economic Partnership Agreement (TEPA) entered into force on 1 October 2025. According to PIB, it includes an investment objective of USD 100 billion over 15 years and the facilitation of one million direct jobs in India, with wider market access across the four EFTA states: Switzerland, Norway, Iceland and Liechtenstein.
The Analysis
Joshi’s argument moves from the headline to the bottlenecks, then to the lessons.
1. The headline is strong. After the 18th BRICS Summit in New Delhi in September, and ahead of the Prime Minister’s planned December visits to Canada and Brussels, where Joshi writes that free trade agreements “are expected to be signed”, India’s trade push and domestic reforms have changed its investment trajectory.
2. But deployment lags. Globally, international project finance remains roughly a quarter below its 2021 peak, and India reflects the trend. In greenfield data centres, India’s roughly $7 billion trailed several peers. Joshi’s question: what creates this lag between committed investment and its actual deployment?
3. The remaining negotiations are internal. They run between the Centre and the States, between the Department for Promotion of Industry and Internal Trade (DPIIT) and line Ministries, and between central rules and the State notifications needed to enforce them. Fixing them helps domestic firms as much as foreign ones.
4. Contract enforcement. Courts still had nearly 48 million pending cases as of April, including about six million in High Courts. The Commercial Courts Act, 2015 and the Mediation Act, 2023 have helped, and institutional arbitration is becoming the corporate default, but smaller enterprises still rely on courts. Joshi wants better-staffed commercial benches and mediation centres.
5. Labour codes in transition. Parliament consolidated 29 central labour laws into four codes, and Joshi writes that the Central Rules were notified in May 2026. Because labour is on the Concurrent List, implementation depends on State notifications: Gujarat has notified rules under all four codes, while other industrial States are still finalising theirs. A firm with a national human-resources framework must manage varied State timelines.
6. Tax certainty. Joshi credits the Taxation Laws (Amendment) Act, 2021 with ending “the ghost of retrospective tax disputes” by withdrawing outstanding demands against entities such as Vodafone and Cairn Energy, and the relaunched Vivad se Vishwas scheme with reducing the direct-tax litigation backlog.
7. Compliance overreach. Mandatory Bureau of Indian Standards (BIS) certification under QCOs was meant to protect consumers, but the framework expanded. Joshi cites the Gauba Committee: QCOs grew from fewer than 70 to nearly 790, covering raw materials and intermediate goods. For imported components, compliance costs rose to Rs 20 lakh, with certification taking six to eight months and disrupting MSME supply chains. The government responded by withdrawing QCOs on critical intermediate goods, including PVC, aluminium and zinc.
8. Targets without protection. Modern trade pacts now carry binding investment targets, such as the EFTA agreement’s $100 billion. But because TEPA “lacks an independent bilateral investment dispute mechanism”, Joshi notes, Switzerland is separately negotiating a bilateral investment treaty, which “could inform negotiations with the EU and the U.K.”
9. Uneven speed. The DPIIT is the nodal agency but not the decision-maker on approvals. A revised standard operating procedure issued in May 2026 sets a 12-week deadline, but compliance is uneven. Large projects such as Tata Electronics’ semiconductor facility at Dholera, Gujarat show what coordination can do.
10. Lessons from success. Singapore’s Comprehensive Economic Cooperation Agreement (CECA) has, Joshi writes, facilitated over $195 billion in cumulative FDI since 2000 (DPIIT puts cumulative FDI from Singapore at $194.68 billion for April 2000 to March 2026), and its non-discrimination and investor-protection frameworks are a blueprint for treaties. At home, mobile-phone production has grown 33-fold since FY15, from Rs 180 billion to Rs 6.27 trillion, with exports of Rs 2.59 trillion; India is now the world’s second-largest mobile-phone manufacturer by volume and meets 99.2% of domestic demand locally.
Joshi concludes that India’s rise to 11th place among FDI destinations reflects its resolve to tackle internal governance bottlenecks, and that sustained institutional reform and free trade will keep paying off.
Data and Institutions Vault
Prelims-grade facts:
- Four labour codes (background): in force since 21 November 2025, per PIB; together they rationalise 29 labour laws.
- The four codes: Code on Wages, 2019; Industrial Relations Code, 2020; Code on Social Security, 2020; Occupational Safety, Health and Working Conditions Code, 2020.
- Labour is a Concurrent List subject; under the codes, both the Centre and the States make rules.
- India-EFTA TEPA (background): in force since 1 October 2025; investment objective of USD 100 billion over 15 years; one million direct jobs.
- EFTA = Switzerland, Norway, Iceland, Liechtenstein.
- DPIIT: Department for Promotion of Industry and Internal Trade; the nodal agency for FDI, though not the final decision-maker on approvals (Joshi).
- QCOs: make BIS certification mandatory for notified products. Gauba Committee count, as Joshi cites it: fewer than 70 grew to nearly 790.
- Dispute-resolution laws Joshi names: Commercial Courts Act, 2015; Mediation Act, 2023.
- Retrospective tax: Taxation Laws (Amendment) Act, 2021 withdrew outstanding demands (Vodafone, Cairn Energy), as Joshi notes.
- UNCTAD’s World Investment Report 2026 ranks India 11th among FDI destinations (Joshi’s citation).
⚠️ Watch the trap: TEPA is with EFTA, the four-nation European Free Trade Association, not the European Union. Its USD 100 billion is an investment objective over 15 years, not a trade target. And because labour is in the Concurrent List, a code in force nationally still needs State rules to work on the ground.
The Debate
Joshi’s case. India has done the hard legislative work: labour codes, an end to retrospective tax, commercial courts, trade pacts with investment targets. What slows deployment now is coordination: State rules that lag central ones, Ministries that hold approvals the nodal department cannot force, courts that small firms cannot avoid, and certification rules that grew beyond their purpose. Fixing these benefits Indian firms as much as foreign ones.
The other side. Some of these frictions are features, not bugs. QCOs exist, as Joshi acknowledges, to safeguard consumers, and cheap imported inputs of uncertain quality carry their own costs. Divergent State labour rules are what the Concurrent List allows: States can adapt rules to local labour markets, and a single national template would cut against federalism. Strong investor-protection clauses in treaties can expose India to arbitration claims that constrain its right to regulate, which is why India’s 2015 Model BIT (background in our 3 October piece) was cautious. And a target written into a trade pact is an objective, not money in the ground.
The balanced verdict. The aim is not to remove every rule but to make each rule predictable and proportionate: consumer-safety QCOs targeted at finished goods rather than critical inputs, State labour rules notified on a known timetable, approval deadlines enforced across Ministries, and treaty protections that reassure investors while preserving regulatory space. Predictability, more than any single concession, is what turns commitment into deployment.
How to Think About This
Use a “commitment to deployment” lens. A headline FDI figure measures money pledged or arriving; the economy gains only when that money becomes a working plant. Between the two sit four checkpoints you can list in any answer: approvals (who decides, and how fast), rules (central and State, in force or pending), contracts (how quickly disputes are settled) and protection (what the investor can do if the state changes course). Joshi’s piece walks through all four. In Mains, name the checkpoint, give one example from this piece, and propose one fix.
Diagram-in-Words
From commitment to deployment: Joshi’s argument
Record FDI is the headline; the bottlenecks that slow deployment are internal, and past successes show the fix.
Takeaway Box
- Core idea: India has won headline FDI; deployment now depends on internal coordination, Joshi argues.
- Know the anchors: four labour codes (in force since 21 November 2025; 29 laws); labour in the Concurrent List; India-EFTA TEPA (USD 100 billion over 15 years); DPIIT; QCOs and BIS certification.
- Know the bottlenecks: State labour rules, Ministry approvals, court pendency, QCO compliance, investor-protection gaps.
- Mains use: GS3 investment models and liberalisation; GS2 bilateral agreements and federal relations.
Revision Cards
UjiyariThe five internal bottlenecks: card 3 →UjiyariLessons and the other side: card 4 →UjiyariThe static base: card 5 →UjiyariTest yourself on card 6 →Show answer
Show answer
Show answer
UjiyariWatch the trap: card 7 →R1How many labour laws do the four codes rationalise?
R2Whose count put QCOs at nearly 790?
R3Which department is the nodal agency for investment approvals?
UjiyariWrite the Mains answer on card 8 →UjiyariNow take today’s quiz →Sources: The Hindu, op-ed by Bharat Joshi, 9 October 2026; PIB background release on the four Labour Codes, 21 November 2025; PIB, Implementation of Labour Codes, 24 July 2025; PIB background release, India-EFTA TEPA comes into force, 1 October 2025
Source: Calibrating Inbound Investment: FDI, Labour Codes, QCOs — Ujiyari.com | Free UPSC & State PCS Editorial Analysis
