India and the rest of the world are going through challenging times.
Over the last 10 months of the year 2020, the Government of India has undertaken proactive and fast track measures to safeguard its people, economy, trade and industry against the wild tide of pandemic COVID-19. The series of stimulus announcements by the Government under the Aatma Nirbhar Bharat Abhiyaan along with the measures are undertaken by the RBI have taken the total stimulus package to the level of around Rs 30 lakh crores, which is highly laudable and encouraging.
The recovery in the key economic and business indicators is visible on the back of the meaningful reforms undertaken by the Government, which has instilled the expectations of a strong, sustainable and even positive growth in Q3 FY2021 with the robust resumption of the lost economic activity sooner than later.
Developing into an open-market economy, India is certainly on a high growth trajectory, which averaged nearly 7% per year from 1997 to 2016. Further, India's economy, which crossed the trillion-dollar mark in 2007 and expected to become a $5 Trillion economy by 2025, is currently in 3rd position (PPP) after the US and China.
The prospects of India’s long term economic growth can easily be assessed from the following factors that encourage foreign investment:
- The numbers are on your side: 564 million below the age of 20, 600 million growing middle-class, saving rates have tripled in the last 12 years, etc.
- Growth Mindset of Indians: Adaptability, competitive, entrepreneurial, believes in learning, earning and spending.
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Now you require ‘opportunities’ and ‘political will’ for things to happen.
India is certainly a ‘Land of Opportunities’. Why? Because 1) there are tremendous challenges in India (mainly in areas such as transport and agricultural infrastructure, medical, power generation & distribution, education, healthcare) and solving these challenges means business & economic growth, 2) Availability of skilled manpower, 3) Geographical proximity to markets in South East Asia & Middle East, 4) English is well understood and spoken in India.
And, finally, the ‘political will’ that is necessary to create success is boldly shown by the current Indian Government (GoI). Under the leadership of Prime Minister Mr. Narendra Modi, GoI is implementing initiatives that not only will facilitate investments into India but will also make India a better and easier place to do business in. Some of the initiatives that the current government has started are Atam Nirbhar Bharat, Make in India, Start-up India, Digital India, Skill India, and Smart Cities.
So far only Multi-National Companies (MNCs) with their vast resources, know-how and the right connections have been the major beneficiaries of this phenomenal growth in India. Small and Medium Enterprises (SMEs) and Entrepreneurs are just becoming aware of the growth story of India.
A simple analysis, taking into account the increasing population (See side box), growing consumption and the shrinking agricultural land, shows that there is a very lucrative market for US companies with products or technologies in the following areas:
- Food & Beverages: food processing, FMCG, food packaging, food warehouse and transport, health drinks, etc.
- Home-based: home decor products, kitchenware essentials, bed, and bath, etc.
- Healthcare: diagnostics and testing, medical equipment, health supplements, clean air and water products, etc.
- Education: medical/nursing, 'train the teacher' programs, automotive mechanics, medical technicians, advanced courses in the upcoming fields of genetics and nanotechnologies.
- Consultancy Services: engineering, business development, product development, security analysis, etc.
- Infrastructure: waste management, solar and wind technologies, temperature-controlled warehouses, air, and noise pollution control technologies, towing trucks, and automated parking lot equipment.
Similar business prospects abound in other sectors such as homeland security, media & entertainment, hotel/motel, financial investment services, etc.
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One of the business formats that is rapidly gaining acceptance is "Franchising". While legal infrastructure and ecosystem are in place in India, one must do thorough research, and due diligence of the potential Franchisee and create binding agreements covering all important aspects of the Franchising before making any investments. One must also understand the business norms of India and seek professional help in navigating the paper trail, IP protection, and Tax implications, etc. before undertaking partnership agreements with the Franchisee. The top sectors with franchising opportunities are Education and Healthcare due to a huge mismatch between supply and demand now and in the coming years. Another popular model is the Public-Private Partnership (PPP) with the Government of India through a tender process.
For Urban Development, for example, the Government of India has initiated a program called ‘Smart Cities Mission’ in 2015. By January 2018, 99 cities were been selected to be upgraded as part of the Smart Cities Mission. The US $15 billion has been approved by the Indian Government for the development of the selected cities. Details about this mission are available here https://en.wikipedia.org/wiki/Smart_Cities_Mission.
All of the above present a historic opportunity for SMEs and Entrepreneurs in the US to expand beyond borders to India. US companies with the right know-how are most preferred by Indian companies mainly for the reason that Indians have a very favorable view of the US according to a Global Attitudes Survey. Indian Government officials make regular visits to the US to meet with the industry experts and to promote business and trade opportunities.
I am so confident that the efforts that not only the Indian Government, Indian business conglomerates and entrepreneurs are putting towards India's growth but also the investments that foreign MNCs like Apple, Microsoft, Samsung, etc. are making in India will entice more international businesses mainly SMEs to do business with/in India.