Why is the National Single Window System struggling to meet its promise of being a one-stop shop for approvals. Indrajit Basu reports
IIn a nation where getting approval to build a road, launch a fintech app or start a factory still means dealing with more than 30 government departments, India’s National Single Window System (NSWS) was meant to be a game changer. But three years on, after 76,000 processed approvals and millions spent engineering the platform, business owners and legal experts alike are asking: Is the window truly open?
While the NSWS offers a sleek interface and tall promises, it has still not developed into a one-stop shop despite being launched in September 2021. Users say what one receives from the NSWS is not a clearance to get cracking, but often a digital nudge towards more paperwork, more ambiguity and more delays.
“The portal acts more like a guidance system for helping users identify required approvals rather than serving as a one-step compliance window,” says Bharati Balaji, general counsel and a director of legal and compliance at the New Delhi-based Indian Sugar and Bio-Energy Manufacturers Association (ISMA).
Take the infrastructure sector. To get off the ground, land titles still need to be validated manually. State electricity boards remain outside the system. Environmental clearances require face time with appraisal committees, regardless of what the NSWS shows on your screen.
Fintech, a sunrise sector, fares no better. The Reserve Bank of India and the Unique Identification Authority of India licences cannot be tracked or processed through the portal. The result? Legal teams continue to file the old-fashioned way, while the NSWS remains an ornamental step.
Even in manufacturing, where India wants to challenge China, the system falters. Industrial zoning, factory layout approvals and labour compliances vary by state and often exit the digital highway halfway through.
Red tape to red carpet
When the government of India unveiled the NSWS, it was hailed as a transformative initiative – a symbol of India’s commitment to the ease of doing business.
The government said the platform was designed to make the system more transparent, accountable and responsive. All necessary information would be available on one dashboard, simplifying the process for businesses. The goal of the single window system was to simplify compliance, speed up project approvals, and make it easier to start and run a business.
This is achieved through a structure that rests on three key pillars. Know-your-approvals (KYA) uses a dynamic questionnaire to identify the mandatory permits required. Second, a unified application interface allows businesses to apply for multiple clearances at once. Finally, a real-time dashboard enables tracking of applications. Together, these features aim to make the platform a one-stop solution for businesses to navigate regulatory requirements.
On paper, then, the NSWS looked like a panacea. In practice? It has helped, particularly in the initial phases of setting up a business. The ability to track approvals, identify necessary licences through the KYA tool and access multiple services from a single interface is undeniably valuable, say advocates.
“The NSWS represents a significant step towards streamlining India’s regulatory landscape,” notes Balaji, of the ISMA. As a professional dealing directly with the system, she says: “Its core strength lies in consolidating multiple approvals and clearances into a single digital interface, reducing paperwork and time for businesses, especially startups and MSMEs [micro, small and medium enterprises]. Many of my fraternity friends have found the KYA module helpful for identifying required permissions across central and state levels, which aids in compliance planning.”
But these positives are quickly tempered by limitations that expose a troubling gap between intent and execution.
Ruled by rules
Users say, despite the promise of a unified, digital-first platform, the window faces several systemic and operational challenges that undermine its effectiveness. They add that India’s regulatory framework remains vast, complex and multilayered, with many clearances involving overlapping laws, such as those related to environment, labour, zoning and sector-specific requirements.
“The system often serves more as an advisory or aggregator platform rather than a true single window – users are still frequently redirected to departmental portals for final submissions, or must undertake manual follow-ups for certain approvals. This limits the seamlessness promised by the system for users expecting end-to-end digital processing,” says Balaji.
“Many approvals, especially at the state level, for example environmental and land clearance issues, still require in-person visits and paperwork. State-specific regulations and the slow pace of digital adoption mean that manual adoption remains common.”
While the NSWS aims to streamline the process, it does little to address the deeper challenge of inter-jurisdictional co-ordination. In effect, while the portal often guides businesses on where to file, it provides limited clarity on what needs to be filed, or how frequently.
“[Although] the NSWS portal offers a KYA feature to help identify applicable permissions and clearances, this tool is not fully exhaustive,” says Charanya Lakshmikumaran, a partner at Lakshmikumaran and Sridharan in New Delhi, and the chair of the Law and Justice Committee of the PHD Chamber of Commerce and Industry (PHDCCI).
“In some states, key approvals like fire NOCs [no objection certificates] or licences under the Drugs and Cosmetics Act, such as for bulk drug manufacturing, are not yet available on the portal.”
As a result, she says, businesses still need to verify compliance requirements independently, either through legal counsel or by reaching out to individual authorities.
In addition to these gaps, the NSWS faces broader structural issues such as interoperability concerns, multiple regulatory authorities, a lack of process standardisation, and frequent policy changes. These factors contribute to inefficiencies and delays, which run counter to the portal’s core objective of enabling timely and seamless regulatory approvals.
Another major shortcoming is the lack of integration of local-level clearances – critical for small and medium enterprises.
Lakshmikumaran cites that to obtain a non-objection certificate from the fire department in Delhi, businesses must apply through the separate website of the Department of Delhi Fire Services, or via the NSWS. The application cannot be routed through the Delhi state single window system.
“This fragmentation defeats the objective of providing a seamless, unified approval process and places an unnecessary compliance burden on businesses to cross-check requirements across multiple platforms,” she says.
Adding to the challenge, some departments still require physical submission of documents. “Often users are forced to revert to traditional, often manual [submissions],” says Balaji.
“They encounter situations where certain approvals are unavailable on the portal indicated by greyed-out ‘apply now’ buttons, which compels them to return to the traditional or manual processes for such approvals. This partial integration undermines the system’s promise of a truly single-window experience.”
Balaji adds: “While the NSWS serves as a facilitation tool, providing guidance for approvals, it does not guarantee that approvals granted via the portal will be honoured uniformly by all the authorities, leading to inconsistencies and delays.”
Dimmed lighthouse
Chandrashekar K, leader in the financial services and regulatory practice at Nishith Desai Associates in Bengaluru, says that for international investors unfamiliar with the complexities of India’s bureaucratic system, the NSWS has been seen as a guiding light, helping them navigate the multiple layers of permissions, overlapping authorities and changing regulations.
That, too, seems to have fallen short. “In the context of clarifications required on any foreign direct investment (FDI)-related matters, there is no separate or quick option available on the NSWS to approach the government or the concerned ministry, which was earlier provided by the Foreign Investment Facilitation Portal (FIFP). The need to follow the entire FDI proposal filing process on the NSWS just to seek a clarification seems cumbersome,” he says.
His observation draws attention to the loss of a once-crucial mechanism of the FIFP, which previously allowed stakeholders to submit targeted queries without going through the exhaustive process of filing a full proposal. The shift to the NSWS, while progressive in intent, has added unexpected bureaucratic heft for investors who simply need policy guidance, according to Chandrashekar.
Industry apathy
It is little wonder that many are unimpressed, prompting Union Minister of Commerce and Industry, Piyush Goyal, to express concern over a lack of industry participation with the system.
During a conference on the ease of doing business jointly organised by the Department for Promotion of Industry and Internal Trade and Confederation of Indian Industry (CII), in November last year, Goyal told business leaders that if companies did not actively engage with the platform and offer meaningful input, the government might consider scrapping the initiative.
“Unless each one of you engages with the National Single Window [System], tries to get approvals through it and provides feedback, it seems the industry has no interest in this initiative,” says Goyal, adding: “I’m almost inclined to abort the idea unless I receive the necessary inputs. The choice now lies with you.”
The industry, however, is calling for a revamp. The CII has emphasised the importance of the NSWS in its 10-point agenda for improving India’s ease of doing business. The roadmap proposed several key measures to enhance the NSWS.
To start, the CII urged the government to make the NSWS mandatory for all regulatory approvals at the central, state and local levels. This would involve onboarding all central ministries within six months, followed by a phased inclusion of state governments, with incentives for laggard states. It was observed that by centralising approvals on one digital platform, the system could bring greater transparency and speed. The CII has also sought statutory mandates for time-bound delivery, including provisions for “deemed approvals” if deadlines are missed.
To reinforce the NSWS’s effectiveness, the CII suggested introducing a new law that imposes legal obligations on public authorities to process applications and grievances within predetermined timelines. If these timelines are exceeded, approvals should be automatically granted to prevent bureaucratic backlogs.
The CII’s broader 10-point agenda also suggested interlinking domains including land, environment, dispute resolution, labour and trade. For instance, it proposed transforming the India Industrial Land Bank into a national-level, GIS-powered land authority, centralising environmental compliance under one framework, and boosting alternative dispute resolution mechanisms.
“The PHDCCI believes that all regulatory approvals across central, state and local levels should be mandatorily routed through the NSWS, and suggested that this transition should be implemented in a phased manner, with a dedicated central budget allocation to support and incentivise states for full-scale integration into the portal,” says Lakshmikumaran.
Crossroads moment
According to Dhanendra Kumar, an ex-World Bank executive director, the first chairperson of the Competition Commission of India and now an independent consultant to foreign investors in New Delhi, departmental resistance to relinquishing authority has hindered the NSWS’s progress, resulting in a piecemeal approach rather than a comprehensive overhaul.
“The turf-driven approach continues to cause confusion and bottlenecks across the system,” he says. “Judicial delays also pose a serious hurdle [to the effectiveness of the NSWS]. Regulatory clearances often get entangled in prolonged litigation, discouraging investment.”
The NSWS stands at the crossroads – it must evolve from a digital aggregator to a transformative mechanism or become yet another shiny technology that fails to address deeper structural barriers.
This is why its evolution into a responsive, technologically advanced and investor-friendly system is crucial, according to Kumar. “Targeted judicial reforms are also imperative, including a commitment from senior judges to fast-track cases directly linked to the NSWS,” he adds.
To unlock the NSWS’s full potential, Kumar suggests a co-ordinated and systemic reform. “A crucial starting point is to comprehensively map every step involved in the approvals process, particularly from the perspective of MSMEs, to ensure no element is missed.” This would enable the removal of redundant permissions and simplification of necessary steps, potentially replacing manual reviews with automated or green-channel approvals, he says.
That aside, the NSWS platform requires a user-centric redesign, offering concise and intuitive forms, seamless integration with central and state systems, and proactive communication to raise awareness of its capabilities.
Creating an immersive, transparent framework to handle grievances with progressive routes to senior officials would assist in setting up responsible and efficient solutions. Kumar notes: “An embedded, transparent grievance redressal mechanism would help establish accountability and encourage timely resolution of issues.”
At the state level, small, dedicated NSWS teams should be deployed to align local regulations and address persistent challenges such as delays in land title verifications or utility connections, he says.
“These efforts must be supported by a robust monitoring and accountability mechanism within the NSWS – one that sets clear timelines, tracks delays and holds responsible parties accountable. I think instituting rewards and punishments to incentivise efficiency, supported by AI-based oversight for transparency, could go a long way in making the system more effective.”
Vardaan Ahluwalia, general counsel at Premji Invest in Bengaluru, suggests creating an inter-regulator working committee to bring together representatives from key regulatory bodies, industry voices and tech partners. “Such a platform could help identify where the real bottlenecks are and where friction is slowing things down,” he says.
This committee, according to him, could develop a clear, time-bound plan to address the issues, prioritising the reduction of compliance costs by removing redundant approvals, cutting down paperwork and ensuring interoperability between systems.
To drive the NSWS’s success, Kumar also recommends deploying small, dedicated teams at the state level to align local regulations and address persistent challenges.
A robust monitoring and accountability mechanism within the NSWS should set clear timelines, track delays and hold responsible parties accountable. “Instituting rewards and punishments to incentivise efficiency, supported by AI-based oversight for transparency, could go a long way in making the system more effective,” says Kumar.
Finally, Ahluwalia, of Premji Invest, adds: “The NSWS has the potential to become the Aadhar or UPI [unified payments interface] of India’s business ecosystem. Just as Aadhar revolutionised identity authentication and UPI transformed digital payments, the NSWS can be a unified digital interface that simplifies the complex maze of ministries, portals and paperwork by streamlining approvals, clearances and registrations.”
But to turn this vision into reality, good intentions must be backed by consistent co-ordination, active feedback loops and continual refinement. This includes aligning data across departments, enabling real-time updates, and creating clear channels for users to flag issues or share input. Such measures will not just enhance the platform’s reliability, they will build user trust and make stakeholders feel genuinely supported in the process.