India is the most difficult country to do business: Study

India has emerged as the most difficult country to do business, followed by Indonesia and the Philippines, says a study by marketing firm SPAG Asia. Thailand and Malaysia have emerged as the easiest for foreign investors. "As the second term of the Congress-led coalition government comes to an end in India, its record has disappointed business. Policy paralysis and slow decision making have resulted in a weak macroeconomic situation, with high fiscal and trade deficits, high interest rates and high consumer inflation," the study said.

The study also pegs India as the country having highest external political risks due to security threats posed by Pakistan. China is in second spot in terms of external risks, as it is encountering friction with many of its neighbours. This category listed 22 Asian nations.

Also Read: Is political risk the new norm?

Social instability risks are also highest in India and Indonesia, while they are lowest in Vietnam and China, the study revealed. Insufficient efforts by the government and political leadership, regulatory and policy hurdles, aggressive tax regime, reversals in trade openness, sensitivity to intellectual property and economic slowdown have contributed to making foreign investors wary, it pointed out.

The study cites corruption as a big problem and potential source of social and political instability in the near term.