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Delhi, not Mumbai, is the city for entrepreneurs

Reuters/Buddhika Weerasinghe
India’s capital city is a better place to start a business.
By Shelly Walia
Published Last updated This article is more than 2 years old.

If you want to be an entrepreneur, go to New Delhi.

That’s because India’s capital city is a better place to start a business, compared to the country’s commercial capital, according to the World Bank’s latest Doing Business report.

The comparison is based on what the report terms as the distance to frontier (DTF) score that measures the absolute level of regulatory performance in a region and its improvement over time. The score tracks the distance of each economy to the “frontier,” which represents the best performance on each indicator across all economies since 2005.

By this measure, Mumbai’s DTF for starting a business in 2015 is 65.95, while Delhi is ahead at 70.61, a jump of 4.34 percentage points from its score last year. Mumbai, on the other hand, only improved by 1.23%.

From the total number of procedures and days required to register a company to the official fee for legal and professional services, Delhi outperforms Mumbai when it comes to supporting new businesses.

Although it is easier to start a business in Delhi, Mumbai performed better on other counts, including time and money spent on obtaining licenses for construction and permits for electricity connection, and importing and exporting goods.

The commercial capital is ahead when it comes to costs and procedures involved in importing and exporting a standardized shipment of goods. While the number of days taken to export from landlocked Delhi is 18, it takes 16 days to export from Mumbai. As a result, the cost of exporting from Delhi ($1,520 per container) is more than Mumbai ($1,120 per container). Similarly, the number of days taken to import into Delhi (22) is more than Mumbai (20)—and the corresponding cost will be higher for a Delhi-based venture ($1,650 per container versus $1,250 per container).

The two cities were also on par with some other parameters—like registering property, getting credit, protecting minority investors, paying taxes, enforcing contracts and resolving insolvency.

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