India is drawing record FDI commitments, yet greenfield deployment lags. Examine the State-level administrative constraints and suggest reforms.

Most sectors are open to 100% FDI under the automatic route [1]. Cumulative FDI has crossed US$1 trillion [2], and the government has set a target of US$100 billion a year [3]. Yet pledges turn into greenfield plants slowly. Once capital clears the Centre, the hurdles that remain are mostly State-level ones.

State-level administrative constraints

• Approval burden: On the National Single Window System (NSWS), State approvals outnumber Central ones roughly ten to one [4]. Raising FDI caps therefore addresses only a small part of what an investor must clear.
• Land: Land is a State subject (Entry 18, List II). Patchy land records, change-of-land-use permissions and acquisition disputes delay possession of sites.
• Power and water: Capital-heavy sectors such as data centres need assured, large connections. These depend on State discoms and water departments (Entry 17, List II).
• Inspections and labour compliance: Overlapping inspections and State labour procedures raise costs. BRAP treats both as reform areas [5].
• Reform on paper: The Business Reforms Action Plan has run seven editions since 2015 [5]. However, it mostly checks whether a reform exists, not how many days an approval actually takes.
• Uneven single windows: State portals differ in maturity. Without statutory timelines, a department faces no penalty for sitting on a file.

Reforms suggested

• Outcome-based BRAP: Rank States on median days-to-approval and on how many pledged projects actually start, not on reforms adopted.
• Statutory single windows: State laws should fix timelines for each department, with deemed-approval clauses when a deadline is missed.
• Full NSWS integration: Route every State approval through NSWS [4] so investors can see which department is holding a file.
• Plug-and-play land banks: Offer GIS-mapped industrial parks with power, water and environmental clearances already in place.
• Fiscal nudges: Link part of Central capital-expenditure support to States' measured clearance speed.
• External benchmark: Use the World Bank B-READY assessment scheduled for 2026 [6] to test whether reforms reach firms on the ground.

Central liberalisation has opened the door to foreign capital, but greenfield projects get built through State offices. Measurable, time-bound clearances under cooperative federalism can turn FTA-era pledges into factories. That is how India can move from record commitments to the US$100 billion target and advance SDG 9 (industry, innovation and infrastructure).