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Reforms and growth prospects

A slow moving reform process in the Indian States, lack of decentralisation in terms of economic policy-making at the Statelevel, stringent labour laws; product reservation for small scale industry and poor infrastructure in terms of power, ports, roads, and telecom are some of the crucial reasons why India is unable to attract large sums of foreign direct investment (FDI). India's neighbors that are relying heavily on FDI, such as China, Indonesia, Malaysia, and Thailand, have been pulling far ahead of India in economic growth, income levels, and productivity, while also increasing their security and geopolitical influence. India's continuing ambivalence to FDI, as a result, exacts a heavy toll on its economy.