Many reasons have been put forward to explain India's investment malaise. Fortunately, India has a model of its own, as large variations in the business environment exist across the country. In short, the country can learn from itself.
India's long-run challenges have turned into short-run problems. Supply constraints, particular in power, mining and land, have become increasingly binding. As these constraints have raised costs and inflation, investor sentiment has suffered. But other measures to remove bottlenecks also matter, such as streamlining taxation and facilitating business investment via additional financial reforms.