Reasons why your business expansion and your investment should be in India.
“Reformers will be the performers”, a common quote in the world of foreign investors. If you are ever confused where to take your business ahead, look for and invest in the most reforming economy and you will definitely find yourself in the middle of a plethora of opportunities. In the current decade, India has been the economy which has consistently made buzz around the world for its reforms. Ever since India liberalised in 1991, it has been the ultimate land for foreign investments. This has received furtherance in the recent ongoing Narendra Modi era where India has seen reforms in the Sales Tax, Foreign Investment Policies, Corporate Taxes, Industrial Licenses, and the introduction of Insolvency and Bankruptcy Code, Make in India initiatives and the Start-up India program. All these events point India in one direction – ‘Growth’, and pinpoint one hint to the foreign investors – ‘Come here, invest in India.’
Fastest Growing Economy
As per the Department for Promotion of Trade and Internal Trade (DIPP), India has received USD 628,774 Million cumulative FDI inflow during the last two decades. This depicts how fascinating Indian economy is for foreign investments. And why won’t it be? According to the World Economic Outlook, a research publication by International Monetary Fund (IMF), India has been ranked as the fastest-growing economies in the world. The IMF report has consistently projected a growth rate of 6-7% for the Indian economy. Leading investing firms as well have always ranked India as the most attractive market.
A fast-growing economy would mean a faster-growing investment for your business.
Largest Youth Population
It’s rare that you talk about India and you are not reminded of how overly populated this country is. However, there is a silver lining to that as well. According to the United Nations Population Fund statistics, where the developed nations have only 17% of their population in the age group 10-24, the same in India is about 27%. The story doesn’t end there. India has the third-largest group of scientists and technicians in the world and according to the British Council, it would be producing the highest number of graduates in the world.
A young and educated population would mean a good workforce availability for your business.
Huge Domestic Markets
According to the World Development Indicators, a dataset by the World Bank, India’s household consumption is estimated to grow at an annual rate of 8%. The consumption of Non-food items which stood at 50% of the total household consumption in 1991-92, improved to 65% in 2004-05. This signifies that the consumptions have moved from basic necessities to other non-food items. Owing to the recent reforms, the Indian economy is becoming more digitized and with the rising influence of social media, the consumption patterns are changing. This would open up the economy to new market avenues and efficiency gains. Besides, the implementation of the Goods and Services Tax (GST), though a supply-side reform, will also improve the consumption in the long run.
Huge domestic markets would mean an untapped consumer base which is open to consuming your products and services and drive your sales to higher levels.
Rising Economic Influence
The dragon and the elephant, China and India, the two over-populous countries, are in competition with each other to become the centre of manufacturing activities in the world. This competition has moved the global trade through shipping, from the Pacific Ocean to the Indian Ocean. 90% of the global trades happen through maritime transport and the growing economic influence of the Indian ocean would also aid the growth of India as a superpower. India has also deepened its economic ties with its neighbouring countries, a significant step to increase economic influence.
A high economic influence would mean sitting in the middle of global trade opportunities for your business and well, business is all about grabbing opportunities and managing the risks.
The Infrastructure Development
India’s infrastructural developments and programs are a story of its own. There’s a huge scope for development and there’s also a Government which intends to. India plans to invest USD 1.5 Trillion in the next 10 years in its infrastructural plans. This includes development of road networks to connect 700,000 villages, airports, seaports and generate more power, with special focus on renewable sources of energy. On the other hand, there are various undergoing projects like the Delhi-Mumbai Industrial Corridor (DMIC) and the 100 smart cities mission which look to improve the existing state of infrastructure.
Good public infrastructure would mean efficient conduct of the supply chain for your business. Development of highways, airports and seaports encourage the trade and improve connectivity to untapped markets.
Rising Global Competitiveness
Well, India jumped 79 positions from 142nd in 2014 to 63rd in 2019, on the World Bank’s Ease of Doing a Business survey in a time span of five years. This is majorly owing to the reforms in the legal structures. The Jan Dhan Yojana, a scheme for formalisation of savings, was welcomed by the nation when 312 Million Savings Accounts were opened under the scheme. Aadhar scheme placed India amongst the world’s largest social security programs when 95% of the population, which converts to approximately 1.27 billion people, were covered by the scheme. All these reforms have helped the economy to improve its competitiveness amongst the developing nations.
Improvement in the global competitiveness of the economy would mean businesses freely conduct their business and match their peers in any other competitive market.
The land you must invest in!
India may be a tough economy to track down in economic formulas, however, if you try to fit in, your business will be blessed by the same. Yes, India’s GDP growth rate and the forecasts as well have tumbled to 4-5% recently, however, China, it’s direct competition in the region, as well is experiencing its slowest in the last 27 years. Blame the global slowdown which has affected the Indian economy like most other economies, however, that shouldn’t overshadow its performance during the past 4-5 years.
India is a rich economy – rich in the workforce, resources and a lot of opportunities, only waiting for someone to avail them. With the recent events and reforms, India is racing towards a ‘bigger and developed economy’ tag and there’s no doubt it will realise its dream soon. However, the real question is “Will you be a part of it, harnessing its benefits?”