India’s growth needs next-gen reforms, not new stimulus, says CII chief

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New Delhi: India does not need another round of fiscal stimulus to shield growth from global uncertainties and geopolitical disruptions. Instead, the country needs fresh structural reforms to accelerate its journey to a $10 trillion economy, said R. Mukundan, newly elected president of industry chamber Confederation of Indian Industry (CII).

“The biggest stimulus would be reforms,” Mukundan told Mint in his first set of media interactions after taking over as CII president. “These reforms are an evergreen stimulus. They make the economy fitter and more resilient rather than providing temporary relief.”

He said the current global disruptions, including supply-chain shocks, trade tensions and the West Asia crisis, should be viewed as an opportunity to push through the next generation of reforms.

The Indian economy grew 7.7% in FY26, per provisional estimates released by the government. The Reserve Bank of India, in its June monetary policy review, lowered its FY27 growth forecast to 6.6% from 6.9%.

Mukundan argued that while India has weathered recent crises relatively well, the focus should now shift to strengthening long-term competitiveness and resilience.

“We should use this period to prepare for the next phase of growth. The question is not whether India will become a $10 trillion economy, but whether we reach there in five years, seven years or ten years,” he said.

Mukundan said the industry body’s 16-point reform agenda is built around four themes: foundational reforms, factor reforms, future-ready reforms, and fiscal and policy reforms.

At the core of the reforms is a renewed push to improve the ease and speed of doing business. The industry body has proposed time-bound regulatory approvals, a stronger National Single Window System, a National Compliance Grid linked to PAN 2.0, wider decriminalisation of economic laws and faster commercial dispute resolution.

Mukundan said the speed of governance has become as important as ease of compliance. “Technology and AI can significantly improve response times and reduce uncertainty for investors,” he said.

For the second pillar, which focuses on agriculture and rural transformation, CII has called for stronger farmer-producer organisations, expanded cold-chain infrastructure, greater industry participation in post-harvest value chains, and wider adoption of technology to improve productivity and exports.

The industry body also urged the government to strengthen domestic resource security through a dedicated sub-surface exploration agency, faster approvals for strategic mineral projects and a ₹50,000-crore sovereign critical minerals fund to secure overseas assets.

Among factor reforms, land availability remains a major concerns for large and small manufacturers, Mukundan said.

CII has proposed unlocking surplus government and public-sector land, allowing higher floor-space index (FSI) in industrial corridors, creating GIS-based land banks and establishing a National Industrial Land Council on the lines of the GST Council.

The chamber also wants the government to sustain its push for public capital expenditure while accelerating the development of multimodal logistics parks, coastal employment zones, and municipal bond financing.

In the power sector, it has recommended phasing out industrial cross-subsidies, introducing direct benefit transfers for targeted subsidies and encouraging greater private participation in power distribution.

As India pursues its energy-transition goals, investments in transmission networks, storage systems and grid stability will become increasingly important, Mukundan said.

CII's recommendations include setting up a National AI Apex Council, AI regulatory sandboxes, stronger industry-academia collaboration and faster deployment of the government's Research Development and Innovation Fund.

On sustainability, CII has called for stronger carbon markets, circular-economy industrial parks, and government-backed pilots for carbon capture, utilization, and storage technologies.

It has also reiterated support for expanding nuclear energy, recommending a roadmap to achieve 100 GW of nuclear capacity by 2047 alongside faster growth in renewable energy and storage infrastructure.

With net foreign direct investment (FDI) inflows moderating in recent years, Mukundan said India needs to focus on attracting fresh global manufacturing investments.

India’s net FDI has declined sharply in recent years, from a peak of $44 billion in 2020-21 to just about $353 million in 2024-25. The net FDI stood at around $ 7.7 billion in FY26.

CII said India needs to attract 40-50 leading multinational manufacturers serving major consumer markets in the US and Europe, with support from dedicated government-industry task forces and investor facilitation mechanisms.

The industry body also called for a new generation of production-linked incentive (PLI) schemes focused on aerospace, defence, chemicals, machine tools, railway equipment, furniture, toys and footwear.

Mukundan said manufacturing expansion would be critical for employment generation and argued that India’s recently concluded and proposed free trade agreements should now focus on improving utilisation levels and integrating domestic firms into global value chains.

“We are competing with other manufacturing economies every day. Nobody is going to create space for us. We have to become more competitive and move faster,” he said.

The industry has maintained its investment momentum, with private investment rising over the last three years from about ₹5 trillion to ₹7 trillion, and to about ₹9.7 trillion in FY26, Mukundan said, citing CII's assessment.

Public investment crowds in private investment, he said, adding that infrastructure has to be created first. Once competitive infrastructure is in place, private capital follows.

Despite global uncertainties, Mukundan said industry sentiment remains cautiously optimistic, with sustained reforms and continued infrastructure investment capable of keeping India among the world’s fastest growing economies.

Subhash is the infrastructure editor at Mint and tracks the momentous developments taking place in the space that is fast changing the Indian landscape. He finds reporting to be a passion that provides the necessary adrenaline rush and keeps you going.

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