Govt Eyes 15-Year Licence Validity To Cut Business Red Tape

The central government is preparing a major overhaul of business licensing rules this financial year, with several key permits likely to get longer validity periods, extending up to 15 years in some cases, according to a Moneycontrol report. The move is aimed at easing the compliance load businesses currently face.

The scale of the problem is visible in sectors like hospitality, where a single project can require at least 60 licences from central, state and local authorities across its lifecycle. Several central-level approvals, including environmental clearance and food safety licensing, need periodic renewal. Food Safety and Standards Authority of India licences, for instance, currently require renewal every one to five years, as per a NITI Aayog report.

The overhaul covers several regulatory areas, including environment, drug regulation, explosives, and certification under the Bureau of Indian Standards. According to a source cited in the report, the government's original preference was to scrap these licences altogether, but that option was not workable. The next best alternative considered was making licences perpetual, though this too has not been accepted across the board. In some cases, ministries have said a lifetime licence is not possible, but they are willing to extend validity to 10 or 15 years instead, which the source described as still a strong outcome.

The reform is being driven by a high-level committee on non-financial regulatory reforms, led by NITI Aayog member and former cabinet secretary Rajiv Gauba. Formed in August 2025, the committee's mandate is to examine central government regulations, certifications, licences and permissions with the goal of cutting compliance burden. Most ministries have already been brought on board, and the report noted that the committee's deregulation recommendations are expected to be rolled out within the current financial year itself.

Fee Payment To Stay Separate From Renewal

A key part of the plan is to delink licence validity from fee payment. Businesses would still be required to pay prescribed fees every year, but they would no longer need to repeatedly apply for renewal once a licence is valid for 10 or 15 years, the report said. This is expected to remove the recurring paperwork tied to renewals while keeping the fee structure intact.

A NITI Aayog report titled "Unlocking Growth in Tourism and Hospitality Sector: Recommendations for Non-Financial Regulatory Reforms," published in June, found that hotel operators need at least 60 licences over a project's lifecycle, while food and beverage establishments require close to 30. The same report noted that a typical hotel project in India takes 36 to 48 months to move from approval to commissioning, compared with 12 to 18 months in Southeast Asian markets.

Regulatory requirements across industries vary widely, ranging from environmental clearances and pollution-control consents for industrial projects to manufacturing licences for drugs, safety licences issued by the Petroleum and Explosives Safety Organisation for explosives and petroleum-related activities, and BIS certification for products under mandatory Quality Control Orders.

The source clarified that the reform does not involve merging different licences into one. "We are not looking at integrating different licences into a single licence. Businesses will still have to obtain the individual licences that are required. The focus of the current exercise is deregulation and reducing the compliance burden," the source told the publication.

The broader direction of the policy is toward a more trust-based regulatory approach, which includes longer validity periods for licences in areas where regulation continues to be necessary. The push comes as part of India's wider push to improve its ease-of-doing-business standing. The country's ranking on the World Bank's now-discontinued Ease of Doing Business index had risen from 142nd in 2014 to 63rd in 2020, the last edition published before the index was withdrawn over concerns about data integrity. India is set to be included in the World Bank's new Business Ready assessment later this year.