The experience of industrialization the world over has underscored the critical role played by access to finance and credit. The East Asian countries have intervened strategically to develop sunrise industries through the directed credit in the Republic of Korea, Malaysia, China, among other East Asian countries. Corporate governance as shaped by regulations such as the Companies Act, the Competition Act, SEBI Act, Insolvency and Bankruptcy Code, and global standards can also help to nudge the business enterprises to pursue inclusive and sustainable business practices enhancing their contribution to overall socio-economic development. ISID’s work under this theme addresses institutional architecture for industrial finance and evolving good practices in corporate governance that can be adapted to India. The past work of ISID has also explored the patterns of mergers and acquisitions and patterns of market power.

ISID was awarded by the Competition Commission of India an important research project on competition issues in the mining sector with a focus on Iron Ore. Mineral resources have directly and indirectly played a key role in the evolution and growth of human societies and led to the industrial revolution and modern living conditions. Due to the non-renewable characteristics of minerals and the limited supply of them, the countries with rich minerals are naturally gifted. Nevertheless, the demand for minerals such as iron ore is increasing tremendously due to the huge infrastructure and other development requirements in developing nations. India is self-sufficient in its iron ore production. Iron ore is the key raw material for producing steel, which in turn is a critical input for industrial development. Therefore, any market imperfections in iron ore pass through to other core sectors of the economy as well. The major objective of this study was to identify whether there are any market imperfections prevailing in the iron ore market in India, using a combination of both secondary data and field survey approach.

Research Team: Dr Beena Saraswathy, Dr Satyaki Roy, and Dr Sanjaya Kumar Malik

Collaboration: Competition Commission of India

Status: [completed] Project launched in November 2022; report submitted August 2023.

Report Link:

Press Release:

Media Coverage:

Digital platforms are one of the key developments in facilitating industry 4.0 and are at the center of the multifold benefits the consumers derived through this. With 644 million e-commerce users in 2021, India is the second largest behind China, which indirectly indicates the potential of Indian market and how crucial for the top e-commerce players is to establish their business in India. With the tremendous growth of e-commerce business in India, the Department for Promotion of Industry and Internal Trade (DPIIT) has come up with a draft e-Commerce Policy in February 2019 with an aim to ensure fair competition and a level playing field for all stakeholders in the sector. The draft regulations underline the prominence proposed to be given to the domestic industry and the non-discrimination of small and medium enterprises/sellers in this business. In this context, this study aims to unravel how strong the presence of multisided markets in the Indian e-Commerce.

Research Team: Dr Beena Saraswathi

Status: [Proposal stage].

In the context of growing debate on “stakeholder capitalism” and the emphasis being put on environmental and social governance (ESG), the research programme would review and examine the codes of corporate governance and legislation and guidelines in the global comparative perspective to highlight the gaps and underline the potential good practices that can be adopted by India. It would also examine the M&A guidelines and antitrust regulations that help to regulate the collusive behaviour of enterprises and promote market competition and protect consumer interests. It would also review and propose new standards of corporate disclosures that may foster a move towards more responsible and sustainable business by enhancing transparency and peer pressure on corporations and fostering compliance to global standards.

Research Team: Dr Swati Verma and Dr Rajat Panwar.

Status: [ongoing]

Access to and availability of finance or credit plays a critical role in advancing the industrial development of any country. A recent ISID study has attempted to analyze the financial constraints to industrial development in India against the backdrop of an ambitious vision of making India a manufacturing hub to create productive and decent job opportunities for its teeming millions and for fostering inclusive growth. The structure of India’s manufacturing sector, sources of finance, and the issue of credit constraints faced by the manufacturing sector in recent decades were examined and limitations of the existing financial system in meeting the credit requirement of India’s industrial sector were analyzed and recommendations made for an institutional architecture needed to realize India’s aspirations for Make-in-India and the Vision 2047. A final project report co-authored by Prof Nagesh Kumar, Mr G A Tadas and Dr Santosh Kumar Das was submitted to the NITI Aayog in March 2023.

Research Team: Prof Nagesh Kumar, Dr Santosh Kumar Das and Gopal Krishna Tadas (Consultant)

Collaborator: NITI Aayog

Status: Completed

The study analysed the performance of the India’s banking sector with focus on non-performing advances (NPAs). It attempted to provide critical insights into the NPA problem by exploring the nature and contributing factors of the current banking crisis in India. It analysed the NPA crisis in context of the changing structure of the India’s banking sector and provided a comparative analysis of the two phases of the NPA crisis in Indian banks and examined the possible impact of NPAs on banks. The study explored the factors responsible for the NPA problem, with emphasis on the role of bank specific factors and the role of operational, governance, and credit approach aspects of banks. Issues of wilful default and corporate performance have also been analysed. Besides, the study critically analysed the current policy of NPA management framework, and suggested an appropriate policy framework for effective NPA management. The research project was sponsored by the ICSSR, under the IMPRESS Scheme. Dr Santosh Kumar Das was the project coordinator.

The study locates financialisation as a process that increasingly mediates transactions in the economy at various levels. Notable is the fact that in a financialised economy, growth of profit seems to move faster than the growth of investment and a trade-off between growth and profitability constraints the decision-making process of an individual firm. It has wider ramifications, giving rise to a puzzle at the macro level, which is that profit making increasingly gets disconnected from the activity of production, as a result of which accumulation occurs without commensurate increase in productive employment. In this context, the study primarily aimed at understanding the nature and extent of financialisation in India. It identified the major macro-level trends and discussed the findings in reference to stylized facts of financialisation relating to advanced countries. Besides the broad trends of the weakening link between growth and investment, financial landscape in India is undergoing change, evincing early signals of growing importance of non-banking financial entities, non-banking activities of banks, increased resource mobilisation through capital markets, and banks’ increased focus on household financing. It then closely dwells on the emerging patterns of financialisation within the corporate sector of India, arguing that growth of profit has been, on an average, higher for financial companies compared to non-financial companies; there has been a decline in the growth rate of investment in plant and machinery although it hardly affected the operating margins of corporate firms, particularly in the manufacturing sector. Furthermore, in the case of advanced countries, decline in aggregate demand caused by a declining share of wages was partially and temporarily mended by debt-financed and wealth-based consumption of the working class that are largely integrated with the financial market. In the case of India, the slowing down of demand caused by a repression of wages together with not so high degree of financialisation of household income was expected to be temporarily displaced through wealth-based and debt-financed consumption of the middle class. In the end, the study analytically put the identified trends in the perspective of globalised finance and discussed how the current trends are driven by the imperatives of global capital. The research project was sponsored by the ICSSR and the final report was submitted in January 2019. Dr. Satyaki Roy was the Principal Researcher.

The Indian financial sector which is primarily bank-based is facing serious challenges on account of growing NPA problem. Despite having several preventive measures in place, the volume of NPAs has gone up substantially in recent years. Growing NPAs, which reflect deterioration of asset quality, is a cause of concern as it can have adverse impact on the stability of the banking system and the economy as well. Stagnated credit growth, coupled with increase in stressed assets has impacted the profitability of the banking sector substantially. While the source of stress in the banking system seems to be coming from the poor performance of the corporate loans, worrying factor continues to be the accumulation of stressed assets by the Public Sector Banks (PSBs). In this backdrop, the study attempted to explore different dimensions of the current phase of NPA problem of Scheduled Commercial Banks. Given the limitations of data and unavailability of any systematic micro level loan default data, the study made an attempt to explore the following aspects: (i) state of NPAs of the Indian SCBs; (ii) impact of rising NPAs on banking performance; (iii) factors responsible for NPAs; and (iv) ways to manage the existing stressed assets and suggest preventive measures to avoid accumulation of stressed assets in future.

The study found that the source of the stress in the banking system is primarily the large corporates. While at a broad sector level the industrial sector is found to be the source of stress for the banking sector in terms of loan default, the analysis shows that NPAs are high in the following sub-sectors: infrastructure; basic metals and metal products; cement and cement products; construction; textiles; mining and quarrying; and transport equipment. The impact of accumulation of stressed assets is evident from the fact that the profitability of the banking sector has gone down substantially.

There can be various factors responsible for the growing NPAs. The roles of three key agencies the lender (banks), borrower (borrowing entities), and the prevailing economic environment have been explored to gain insights into the above problem. While it is difficult to single out any specific reason for the current NPA problem, the analysis has suggested a set of issues or factors that seem to have played a critical role in the above situation.

The phenomenal increase in NPAs and the willful defaults over the last three years raise serious questions on the effectiveness of NPA management and its mechanisms. Given the potential adverse impact that the increasing incidence of NPA might cause, it is crucial that its resolution takes place in a timely manner in order to limit its negative impact on banks and the economy as a whole. Based on the findings, the study has recommended a set of measures that would be useful to address the growing NPA problem in the Indian banking sector. The research project was sponsored by Canara Bank, Bank of India and the Corporation Bank. Dr. Santosh Das and Mr. Pradhyuman Singh Rawat were the Principal Researchers and Final report submitted to the banks in March 2018.

  • The Globalisation of Indian Business: Cross-border Mergers and Acquisitions in Indian Manufacturing,, Beena Saraswathy, December 2019, Beena Saraswathy, December 2019
  • Indian Multinationals in the World Economy: Implications for Development, Jaya Prakash Pradhan, Bookwell, New Delhi,, , December 2008, December 2008