The People of India have Spoken: Modi’s back to form the Government. What it means for Doing Business in India?

23 May 2019 marks as epic day in the history of India’s democracy, with the BJP government winning with a whopping majority. Once again the Indian people have given Narendra Modi the mandate to form the Government in India. The Indian voters have given clear majority to Modi’s BJP to form a stable Government because of his track record of past five years and have now put their faith in him for the next five.

PM Modi is all set to form the government for a second time with his opposition in shambles. With the Lok Sabha elections being held from April 11 to May 19 in different parts of India, the exit polls had predicted a landslide win for the NDA government and the actual result has not proved the exit polls to be untrue.

As we have seen in the last five years, a stable Government at the centre has led to bold and progressive reforms; case in point being GST and Demonetization. From an investors’ perspective also whenever a Government has come with a full majority instead of a weak coalition it has always lead to the formulation of stable policies and reforms by the Government which would benefit the investors in the foreseeable future. As usually in case of coalition Governments we have seen that the policies are sometimes diluted or curtailed to appease the coalition partners.

But what does it mean for doing business in India?

1.       The BJP Government has promised to make India a $5 trillion economy by 2025 and the world’s third largest economy by 2030. Fiscal discipline, re-visiting the policy framework, Banking reforms, encouraging savings and re-energizing the engines of growth are some of the solutions cited to ensure economic growth.

2.       The Government in its manifesto has promised to eliminate corruption with the use of technology-enabled e-Governance. Apart from that public awareness, policy-driven governance and simplification of the tax regime have also been cited as solutions to the problem of corruption.

3.       BJP has said that it will rationalize and further simplify the tax regime in the next five years. It also said that it will bring on board all State governments in adopting GST, addressing all their concerns.

4.       They have committed to invest $1.5 trillion in the Infrastructure sector over next five years. The Government has also committed to continue their existing milestone of constructing roads at an unprecedented pace and will construct 60,000 km of highways. They have proposed electrification of all railway tracks by 2022 and cover 50 cities by Metro.

5.       For the past two decades, China has ruled the manufacturing landscape globally, especially in the sphere of hardware manufacturing. But India is beginning to catch up with its ‘Make in India’ initiative. Manufacturing has emerged as one of the high growth sectors in IndiaUnder PM Modi’s Government, India is forecasted to become the fifth largest manufacturing country in the world by 2020

6.       With the Make in India initiative, the government of India is all set to increase the gross domestic product (GDP) to 25% by 2022

7.       When PM Modi first formed Government in 2014, India was ranked at 142nd position in Ease of doing business among 190 nations. In 2016 it moved to 131st, in 2017 to 100th and recently in 2018 it was ranked at 77th position.

8.       The Government of India has released the draft for National Policy of Electronics (NPE) that envisages to create a sizeable $400 billion electronics industry in India by 2025.

9.       Government of India to come up with a new industrial policy that envisions the development of a globally competitive Indian industry.

10.   The Ministry of Defence, Government of India has approved the ‘strategic partnership’ model that enables private companies to tie up with foreign players. 

All these initiatives will find a renewed boost with the re-election of the prevailing government in India.

The Current State of the Healthcare Sector

The healthcare sector is a dynamic industry that offers significant opportunities. But currently, at a global level, the healthcare sector is fraught with uncertainties, cost concerns, and complexities. There is a scope of substantial gain for players who will be able to deliver value-creating solutions that will thrive through this uncertainty. The intrinsic demand for healthcare services is rising all over the world with factors like technological developments slowly shaping the healthcare sector of the future. Advanced analytics, artificial intelligence, and big data are becoming key drivers of technological growth in the healthcare sector.

In India, healthcare is one of the largest sectors—in terms of revenue and employment. Healthcare comprises of hospitals, clinical trials, medical devices, medical tourism, telemedicine, and healthcare insurance. The Indian healthcare sector is rising uphill because of its wide coverage, improved services and increasing expenditure by public and private players. In India, the healthcare delivery system is divided into two categories—private and public. Public healthcare is under the government with limited secondary and tertiary care institutions in urban areas. The public sector functions more robustly in rural areas through primary healthcare centers (PHC). The private sector is majorly concentrated in metro cities and provide tertiary and quaternary care.

Market size, government initiatives and investment in Indian healthcare

The Indian healthcare sector is forecast to increase three times and become $8.6 trillion by 2022. Currently, there is 20-25% growth in medical tourism in India every year. As the GDP is rising in India, there is an enhanced scope of the healthcare sector improving too. A marked rise in the government’s spending in the healthcare sector is seen from FY14 (1.2% of the GDP) to FY18 (1.8% of the GDP). By 2025 the government plans to increase public health spending to 2.5% of the GDP.

There has been quite a few Foreign Direct Investments (FDI) in the hospital and diagnostic centers in India. Investments worth USD 6 billion has flooded the Indian healthcare market between April 2000 and December 2018. There has been 23 deals worth USD 679 million in the first half of 2018. India and Cuba have signed a Memorandum of Understanding (MoU) to increase cooperation in the areas of health and medicine, according to the Ministry of Health and Family Welfare, Government of India.

The government too has taken some steps to secure the future of the healthcare sector in India. Pradhan Mantri Jan Arogya Yojna was launched by the government in September 2018 to provide health insurance worth $717 to over 100 million families. In the same year, the government also approved the Ayushman Bharat-National Health Protection Mission as a centrally sponsored scheme contributed by both center and state government.

The path ahead

In India the healthcare sector is filled with many opportunities, especially for players in the medical devices industry. India has one of the fastest growing healthcare industries in the world (it is expected to reach USD 280 billion by 2020). The country is now innovating with artificial intelligence and offers high-end diagnostic services. The best part is there is both foreign as well as national investments for advanced diagnostic facilities. This will help to cater to the wider population in both rural and urban India.

Along with advancements in healthcare services, even the consciousness among consumers towards healthcare upkeep has risen significantly. The diverse nature of the Indian healthcare sector makes it filled with opportunities for providers, payers and medical technology. Businesses are looking forward to making the most out of the latest global trends in the healthcare sector.

Conclusion

The healthcare sector both in India and globally are going through many changes, but that does not stop it from making the most of the opportunities that lie beneath the uncertainties. Being able to make the most of these opportunities will pave new paths and redefine new possibilities in the healthcare sector.

Major Challenges Being faced by the indian automotive Industry

The Indian automotive sector has witnessed excellent growth in the recent past and is all set to carry on this momentum. The Indian automobile industry has come a long way since its launch in erstwhile Bombay in 1898. Currently, the automotive sector is contributing majorly to the Indian economy both in terms of revenue and in terms of employment. Directly or indirectly this sector employs more than ten million people in the country. The Indian automotive industry comprises heavy vehicles, passenger cars and two-wheelers. While the heavy vehicles sector is dominated by major players like Eicher Motors, Mahindra and Mahindra, Ashok Leyland and Tata Telco, the major car manufacturers are Hindustan Motors, Maruti Udyog, Ford India Ltd, Hyundai Motors India Ltd. and Tata Motors. In the two-wheeler segment, the dominant players are Bajaj, Hero Honda, TVS and Yamaha.  

Since independence, there has been several limitations that the automotive sector has overcome.  Measures such as reduction of tariffs on imports, relaxation of the foreign exchange and equity regulations, and refining the banking policies played a major driver in turning around the Indian automobile industry. The Indian automotive industry is gearing up for major challenges in the coming years. Entrepreneurs in the automotive manufacturing industry are confronted by many challenges. With changes in government regulations, altering world economy, relative prices and market dynamics it becomes difficult to adopt a strategic planning for the automotive business. 

Key challenges in the automotive sector 

There are some pressing questions that are currently worrying the automotive manufacturers in India: 

  • Will there be a decline in car ownership with the rise of autonomous driving? 
  • How will the make of the vehicles change with the government’s increasing focus on fuel efficient technology? 
  • How should the automakers modify their business strategies as sales slowdown in mature markets demands and demographics start shifting? 

As the automotive world gears up to answer these questions, there are five key challenges that form the crux of these indispensable areas of concern in Indian automotive world: 

The ever-expanding Chinese market: one of the biggest challenge of automakers outside China, is the risk of competing with China. In the last fifteen years China has been the leading automotive market. The volume growth has helped the country to overcome other structural and competitive challenges. The biggest challenge for the planners of the automotive market is to plan a strategy keeping in mind China’s outlook. 

The evolution of connected cars: connected are the biggest transformational changes in the automotive industry, but it is also one of the biggest unknowns. The concept of connected cars serve as a communication hub that receives and transmits data from its surroundings. However, this technology is still in such a nascent stage that it is creating uncertainties and questions such as who will buy the carwho will deliver these services, whether the current automakers will be able to navigate through all these uncertainties keep plaguing the automotive world. 

Increased competition: of all the myriad issues facing the automotive world, one of the pressing problems is the sales demand flattening in mature markets like Europe and Japan and competition rising from other manufacturers. The slowdown is sales is directly proportional to the increasing competition. 

Balancing the demands of technology and government: the major global automotive markets have been facing stringent legislations focusing on controlling carbon dioxide emission and other exhaust gas emissions. This is done to improve fuel economy. One of the key challenges in the industry is to make the right powertrains and technology choices to cater to changing social preferences in a changing regulatory environment. 

Consolidation of platforms: intensifying competition, state regulators and global consumers are making global automakers rethink their platform strategyThe trend towards consolidation of modular architectures or mega platforms is slowly replacing the earlier rationalization of segments. Hence this is becoming one big challenge for automakers. 

Conclusion 

It goes without saying that the automotive industry is one of the ripest industries in India. But that does not stop it from being fraught with challenges and issues. Overcoming these challenges will enable the Indian automotive industry to become one of the biggest disruptors in the global market. Tecnova is a consulting firm in India that has in-depth knowledge about the automotive ecosystem. Being in the automotive sector for more than three decades and having worked with more than 500 clients in this sector, on different issues, Tecnova has the domain knowledge that can help automotive companies make the right strategic decisions. 

India is a prominent player in the global automotive market

Between April 2000 and December 2017, the automotive industry has attracted an FDI worth $18.41 bn. In the automotive industry China is currently the market leader in the automotive industry with the fourth-largest reserve of cobalt and highest reserve of lithium. Other countries that have the raw material reserve needed for the demands of the future market are Argentina, Brazil and Chile.

Currently India can reap some great advantages from the changing automotive market, if it is successful in overcoming some of the challenges. As the currently is grossly deficient in its lithium and cobalt reserves, it should start to store lithium heavily. The worst part is there is a high GST of 28% levied on the import of lithium. Cobalt too is only available in Orissa, Nagaland and Jharkhand in India and needs to be imported. However, what differentiates India from other countries (especially the developed nations) is its strong emerging market. With disposable income increasing at the hands of the world’s youngest population, India is going to be a major player in the world’s fastest growing automotive industry.

The global automotive industry is moving towards a new era with electrification of vehicles being a key driver. The automotive industry has the potential to be a game changer as far as power roles are concerned. The automotive sector currently stands at a global worth of over $2.4 trillion, contributing significantly to any nation’s GDP.  The world economy might face a huge disruption with automobile transforming from oil-driven to lithium and cobalt. IoT is also being a major disruptor in the automotive sector as this technology is introducing the idea of connected vehicles. The world is preparing to witness a new form of mobility.

Factors contributing to the growth of the automotive industry in India

Favorable demographic trends: the automotive sector is currently contributing around 7% of India’s GDP. As the Automotive Mission Plan 2016-26, Indian automotive industry is set to increase this contribution to 12%. This can be achieved with major part of the population moving to urban areas. It is estimated that 500 million people will be living in cities by 2030. Also macroeconomic trends where income is will increase in proportion to disposable income will enable 60 million households to buy cars by 2025.  In fact by 2020 67% of the population will join the workforce, and some of them will be able to straight enter the four-wheeler segment.

Consistent governmental support: the government of India has taken initiatives like the Automotive Mission Plan and National Electric Mobility Mission Plan to facilitate two goals—achieve long-term growth in the automotive sector and reduce dependence on oil and thereby also control pollution through emission.  The Automotive Mission Plan 2026 targets to increase the industry revenue to three times and also expand export sevenfold up to $80 billion. In order to meet these targets, the sector will contribute more than 60 million jobs.

India as a manufacturing hub: According to the World Economic Forum India is ranked 30th on the global manufacturing index. The government’s “Make in India” initiative has played a huge role in contributing to the fast growth of the automotive sector.

Conclusion

There are some key trends that are shaping the automotive industry in India. IoT is penetrating the automotive sector and contributing to the concept of ‘connected vehicles’. Several connectivity linking applications are now being explored by the Indian market. Some early signs of adoption are visible in the Indian ecosystem. Electrification has just begun in India. This has been possible due to declining prices of batteries and supportive policies of the government. The local government of ten cities with more than one million population have placed order for 390 electric buses. One major reason for adopting electric cars is to control pollution. India is still not as open as China to the idea of shared mobility. However, there is a major shift that one can now notice in the automotive sector.

 

It’s time to startup India!

A major shift is happening the professional market in India. The Indian youth today no longer wants to be working for a foreign employer. Rather they are now exploring areas where they can contribute directly to the fast growing economy of the country. Startups are being encouraged like never before. There needs to be proper awareness among entrepreneurs regarding the facilities that they can avail if they want to open their own business. According to market research companies in India Indian startups will have to cross the $10 billion market cap to make a mark in the global market. Hence to encourage this initiative, several steps have been taken by the government to encourage setting up of new businesses. Hence entrpreneurs should realize that this is the right time to begin their own business.

Why is it the right time to set up your startup in India?

In 2016 the much awaited policy, called Startup India policy was launched by the Prime Minister. This policy intends to revolutionize the Indian entrepreneurial ecosystem. Through this policy the government is encouraging the youth of the nation to take up the onus of becoming job creators. The main aim of this policy is to quicken the market entry strategy of businesses from different sectors into the entrepreneurial journey, which is currently limited to the digital and technological sector.

It is indeed the right time to invest in businesses from different sectors and encourage startups to move from tier 1 cities to tier 2 and 3 cities, including rural and semi-urban areas. With the aim to provide the right platform for entrepreneurs, the government has launched the Startup India Hub to resolve queries and do some handholding to entrepreneurs to provide them with the right guidance.

From this Hub now startups can get answers to their queries on Certificate of Recognition as a Startup, Certificate of Eligibility to get the tax benefits and information on funding. Consulting companies have done their research on this policy and have found out that to encourage entrepreneurial ventures that government has announced that for the first three years profits made in a startup are not taxable. To protect intellectual property, patent fees in startups have been cut down by 80%.

Indian cities that are best suited for startups

With the atmosphere in India being so favourable for entrepreneurs, market research companies in India have recognized few cities that are best suited for entrepreneurial ventures:

Bangalore: this city is the Silicon Valley of India. This city has developed along with the startup ecosystem. Consulting companies have studied statistics that Bangalore is the most preferred city for business and startups in India.

Mumbai: this city is called the commercial capital of the nation. People, from all across the country flock to this city as Mumbai is brimming with many opportunities. There is free flowing money that can be invested in one’s company.

Kolkata: although this city may not appear to be suitable for business, but this is the main commercial and financial hub in eastern India. It has a port and is connected to the seven sisters, providing entrepreneurs with enhanced connectivity.

Pune: Pune is a tier 2 city that is soon catching up with the other metropolitan cities. It is soon climbing up the ladder to catch up with Bangalore with increased number of tech parks and IT hubs.

Indian startups have a fertile growth path in India. This is mainly because of the the excellent resource base in the country and the massive workforce of both skilled and unskilled labourers. Given a chance India would surely be one of the most sought after nations for startups.

Conclusion

The current milieu in India is such that it is encouraging the youth to start their own businesses instead of lying under the shadow of big multinational companies. The government has taken some progressive steps to make sure that tricky business of opening a startup becomes easier for the young businessmen in India. All kinds of guidance to formulate the best market entry strategy is now being offered by the government so that entrepreneurs do not suffer losses due to wrong steps.

Sources:

7 Best Cities For Startups in India

https://www.entrepreneur.com/article/279483

India: the new foreground for Impact Investment

Impact investment is the new buzzword that is gaining a lot of attention from investors. In Europe and UK there is a growing awareness about impact investment. There has been some path breaking work on impact investment that has already taken place in US. But still you will find people asking you what impact investment is? Impact Investment according to the definition of Global Impact Investors Network (GIIN) is investment that is done with the aim of generating positive and measurable social and environmental impact along with making financial profits. The term was first coined by the Rockefeller Foundation in 2008. Many business consultancy services in India are now promoting impact investment to investors investing in new businesses.

Impact investment examples

With many environmental challenges and irreversible damages being faced by the world, there is a major shift that is taking place in businesses. Blackrock, the world’s largest investment firm that is managing over $6 trillion assets is now telling companies to take up societal responsibilities and become impact investors. The CEO of Blackrock, Larry Fink in his annual letter has mentioned that society is now demanding public and private companies to serve social purpose. Over time it will be imperative for all companies to think about societal needs along with financial return.

UBS too has become an impact investor with launch of their first impact fund of funds. This fund raised $51 million in 2015. A record amount of $471 million was raised in 2016 for an impact fund that invests in cancer research initiatives and turns them into commercially viable businesses. UBS has promised to invest at least $5 billion of private client assets to Sustainable Development Goal related impact investing.

A roadmap for India

While the infrastructural challenges in India may seem like a matter of concern to many, to impact investors from M&A consulting firms in India these challenges may seem like opportunities. Globally India has been seen in the forefront of Global Impact Investing Movement. Brilliant entrepreneurs are seeking opportunities to come up with innovative ideas and are collaborating with foreign investors who are establishing a branch in India that are working with local talents.

All over the world, 193 governments have pledged to sustainable development goals that will free the world of hunger, poverty and inequity. There are some trends that are being noticed in the impact investment sector in India:

  • India has been the global leader in impact investor mobilising capital. But most of this capital has been from global investors. Recently business consultancy services in India are seen to be looking at investing in impactful businesses, setting a new trend.
  • The government of India, in the recent past has focused a lot on startups. The impact investment industry has seen to be making quite a mark on the M&A consulting firms in India where this entrepreneurial nation is not only pooling in capital support from the government, but is also making sure that there is a positive implementation of the same.
  • India indeed is coming up with solutions for the impact investing needs in the world. It is anticipated that Indian fund managers and impact entrepreneurs will soon build impact businesses that will impact global problems.

Conclusion

The current times in India is going to be a watershed period for impact investing not only in India, but also for the world. Some of the impact startups in India have had great successes attracting the much needed global attention. India is indeed in the limelight for impact investing because this vast nation seems to facing almost all the social and environmental challenges that different parts of the world are facing in silos. As the issues faced by India are complex, the solutions found by the entrepreneurs are also innovative and diverse. It is this innovation, coupled with government support and foreign investment that is making India the hotbed for impact investment movement.

Sources:

http://www.forbesindia.com/blog/economy-policy/2019-a-roadmap-for-impact-investment-in-india/

https://www.forbes.com/sites/jpdallmann/2018/12/31/impact-investing-just-a-trend-or-the-best-strategy-to-help-save-our-world/#15869e5d75d1

The big audacious $10trillion Indian Goal 

India is growing economy with numerous opportunities for growth and development. A land of offering diverse opportunities to entrepreneurs and established businessmen, India is seen as a lucrative land for investments. The one factor that acts as both a help and a hindrance for entrepreneurs in India is the numerous interconnected regional market in India. The one thing that entrepreneurs must master is the market entry strategy that must be in place to ensure that they have a smooth entry into the interconnected local markets that is complex but striving with numerous possibilities.  

Setting up startups in India   

In the recent Budget speech, the presenting minister envisioned a $10 trillion economy for India in the next eight years. This is indeed a big and audacious goal for India and can only be achieved with new businesses being set up in India. There is a lot of responsibility that entrepreneurs will have to shoulder in order to make this vision a reality. To achieve this $10 trillion goal, the Indian economy will have to grow at a rate of over 10% vis-a-vis the current growth rate of 7.5%.  

The current status quo in India needs to be disrupted to fulfill this dream of $10 trillion economy. The good thing is that considering the political and economic dynamics now in the country, the tailwinds are in favour of India. It is much easier to get a company registration in IndiaBut entrepreneurs will have to make the most of these opportunities.  

In NASSCOM it is a general belief that it is the technology company that will cause the major shift in the Indian economy, but that does not take away the onus from entrepreneurs on manufacturing plant setup in India as cheap labour and available resources are the biggest advantages in the Indian market. 

Factors to look into for successful startups in India 

There are certain factors that one can look into for startups to be able to come out of the shadows of the big multinationalsFor startups to enter the league of $10 billion market cap the Indian economy must relook into the following factors and make the market entry strategy for startups easier: 

Upskilling and reskilling India: this is the first and foremost priority to achieve the projected growth in India. With technological disruption like Artificial Intelligence and Machine Learning it is true that 75 million jobs will be displaced, but along with that 133 million new job roles will be created. But for this India will need to reskill the rural population to be a part of this digital avalanche and increase India’s global economic advantage. 

Open the doors to new investments: it is true that India needs to build robust local business market, but along with that India needs to open their doors to international investment. India has to strike the right balance. Investors are now looking at markets beyond China and US. Hence it is the right time for India to make it easy for them to get a company registration in India. 

Encourage startupsIndia needs to change its focus from being a nation of job seekers to a nation of job creators. For this entrepreneurs should get the adequate sponsorship and continued push for manufacturing plant setup in India. The regulatory system in India must act in sync with the business creators to ensure that the ecosystem remains ripe and opportunities keep thriving in India. 

Conclusion 

There is no dearth of opportunities in India for new businesses to be set up. Along with regulatory leniency and some continued financial support, startups can fulfill the $10 trillion vision of India. However, for this growth to happen along with economic and political support there needs to be social inclusion as well. Women empowerment and inclusion can change the Indian business scene greatly. It is important that in this age of Industry 4.0 women are more aware and empowered. 

Source: 

https://www.linkedin.com/pulse/turning-indias-big-audacious-goal-reality-debjani-ghosh/ 

https://www.venturewoods.org/2019/02/the-10trillion-india-goal-a-lot-is-on-shoulders-of-startups/ 

 

India: a market with unending opportunities 

India is a diverse land that offers many opportunities to both its native entrepreneurs as well as overseas investors. The large and complex market in India provides numerous opportunities to foreign businessmen. However, to achieve success in India, you need to be very vigilant and navigate through the numerous interconnected regional markets that function as a web in India. It is these interdependent local markets that make the business arena in India so complex and yet thriving with opportunities. In India you need to be well-versed with the changing regulatory environment among the states and union territories and accordingly set up your manufacturing plants and develop your partnership alliances. 

Setting up business in India 

India is indeed a country with huge business potential. With so much manpower and need for jobs, it is always a good idea for businessmen to go for manufacturing plant setup in India. India is brimming with skilled and unskilled labour as well as natural and mineral resources. With transport and other infrastructure being developed in different rural parts in India, manufacturing is a good idea for business in India. The International Monetary Fund has opined that India was the fastest growing major economy in 2018 with a growth rate of 7.4%. This growth rate is estimated to increase to 7.8% in 2019.

There are several regulatory compliance in India that one must keep in mind before investing in the manufacturing market. One of the good things is that India has merged the application of Permanent Account Number (PAN) and Tax Account Number (TAN), expediting the process of starting a business in India. With diverse cultural nuances all over the country, manufacturing plant setup in India requires you to be well-versed with the cultural needs of the country. Along with this one needs to be incorporated in the Ministry of Corporate Affairs (MCA). Completing the entire process may take few weeks to complete the business registration process. Public and private companies may be formed as limited and unlimited liability. Depending on your nature of business you can enter India through options such as Branch Office, Representative Office, Limited Liability Company or Liaison Office.

Expanding business in India 

With India rising up thirty places in the global scale for ease of doing business, according to the World Bank’s ‘Ease of Doing Business 2018 Report’, it is not only easy to set up business but also to expand your business through several distribution partnerships in India. The TMF Group’s Financial Complexity Index 2018 has ranked 94 jurisdictions as per their complexity. In this Index India as secured the 13th rank as far as regulatory compliance in India is concerned.

To further help with distribution partnerships in India and better investment opportunities, access to credit has been improved by amending the rules on priority of secured creditors and new laws on insolvency that provides a time limit and grounds for relief of creditors during the process of reorganization. Such steps help better investment in business and thereby contribute to expansion of business. No business can thrive in silo. Hence for the business to move ahead and expand, it is important to go into partnership with other collaborators and stakeholders, and doing so by abiding by the regulatory and compliance norms of the country.

Conclusion 

India is a land that gives you immense opportunities to grow as a businessman. Whether you are an established businessman looking forward to expand or are planning to start from scratch, India is a country that will give you the best of all that you need. 

 

Source: 

https://www.tmf-group.com/en/news-insights/articles/2018/may/requirements-doing-business-india/?utm_source=Mondaq&utm_medium=syndication&utm_campaign=View-Original 

http://www.mondaq.com/india/x/705398/Corporate+Commercial+Law/Requirements+for+Doing+Business+in+India 

 

India is an ideal business center for Global Companies.

India is the fifth largest economy in the world. The country is an important business center, and multinationals all around the globe are set to take advantage of the opportunities available in India. Establishing a branch in India of your own company is not a difficult task any more due to the simplification of market entry strategy made by the Government of India to promote foreign trade. There are plenty of business consultancy services in India which offers top-notch solutions to companies globally to establish their branch in India. Investors located globally should expand their horizon towards India as a perfect market.

What are the facilities available in India for business expansion?
Along with the business consultancy services in India, The country’s reputation makes it easier for multinationals to open its branch in India. The past few decades have enhanced the country’s reputation making it an ideal market. Please read further to find the top 5 reasons which make India an ideal market for global companies to expand their business.

1. The developing economic status of India makes it a favorable investment spot. Currently, The Indian government is more inclined towards overall national development rather than subsidizing the available goods and services. The policies like these have given multinational a secure gateway.

2. The constant growth of 7 or more than 7 percent (approximately) in GDP claims to make India one of the third most significant markets in the world by the year 2030. It is almost hard to ignore such kind of demand for global companies.

3. There is quick and easy access to novel digital technologies such as Internet-of-things (IoT), mechanical learning, artificial intelligence, blockchain technology, big data and analytics, robotics and mobility has changed India’ image into a smart digitally optimized country. At present, the top global companies of the US and Europe have set up their Research & Development (R & D) and Business Process Management (BPM) centers in India.

4. The growth of startups in India has made a mark for India in the world’s most vibrant tech startup innovation ecosystems. The rise in the startups in India has open doors for companies located abroad. The new technological advancements and innovations fetch global companies to merge with these startups and acquire their patents. The companies can enter the market by forming subsidiary relationships with Indian companies or via joint ventures with an India-based company. The idea of a joint venture is always beneficial as the Indian company is well-acquainted with the local market and the procedural issues. Global companies can quickly focus on profit building.

5. The recent years have seen a growth in the expenditure on infrastructure. The Indian government is keen on spending on the infrastructure such as cities, airports, ports, roads, bridges, hospitals and many more. The government agencies along with tech volunteers have decided on forming an Indian stack. The Indian stack is a set of APIs giving governments, startups, businesses, and developers to build and deliver cashless and paperless solutions.

Final Thought
India has a robust ecosystem reflected in its economic growth and development. The future of global companies in India is very hopeful. The global companies should form a highly impactful and strategically planned market entry strategy. Global companies to achieve success in a large country like India always begin on a regional level and work on gaining localized information. The most suitable way to understand the Indian economy is to classify the country into four economic regions.

References:
https://www.export.gov/article?id=India-market-entry-strategy

https://www.ibef.org/industry/indian-consumer-market.aspx

An outlook on the textile industry in India- present and future prospects of growth for global giants

India is the world’s second largest producer of textiles and garments and the world’s third largest producer of cotton after China and the USA. The Indian market is also the second largest in terms of consumption of Cotton, after China.

One of the oldest and the largest textile industries in the world, the Indian textile industry is currently estimated at US$150 Billion as of December 2018 and is expected to reach US$ 250 Billion by the year 2019. The Indian textiles industry, carrying hand-spun and hand-woven textile sectors at one end of the spectrum and capital intensive sophisticated mills sector at another end of the spectrum, is extremely vast and varied. The Indian textile industry contributed 7 percent of the Indian industry output in the year 2017-2018. Known to be the second-largest employment generating sector in the country, the Indian textile sector contributes to 2 percent of the country’s GDP and provides direct employment to more than 45 million people. The financial year 2018 took the Indian textile exports to US$ 39.20.

The growth in building and construction is expected to raise the demand for non-clothing textiles. Following factors work as the strengths of the Indian textile industry-

  • The remarkable increase in the income levels of the Indian population
  • Abundant availability of raw materials such as cotton, wool, silk, and jute result in a continuous increase in the demand in the Indian textile industry
  • Easy access to low cost and skilled manpower offering a competitive edge to the industry
  • Better assistance in terms of building market entry strategy for global organization by the management consulting firms in India

The fundamental strength of the Indian textile industry is its strong production base with a wide range of fibers and yarns. These are natural fibers such as cotton, jute, silk, wool, and synthetic and man-made fibers like polyester, viscose, nylon, and acrylic. The textile industry is capital and technology-intensive comparable with automobiles, aircraft, computers, and heavy machinery industry. Buyer-driven value chains enhance trade-led industrialization, which has become common in labor-intensive, consumer-goods industries and consumer electronics.

In comparison with other countries like China, the cost of textile production in India is quite less. Due to this, the Chinese textile manufacturers have lost the competitive advantage of lower cost of production. This, as a result, offered an opportunity to the Indian textile sector to overtake the market share of China in the developed world, especially in the European Union and the United States, both comprising of around 60 percent of the global export market.

Considering this, the Indian government took certain measures to further enhance the Indian textile industry and promote mergers and acquisitions in India. Some of the major investments in the Indian textiles industry are as below-

  • 100 percent Foreign Direct Investment has been allowed in the Indian Textile sector. Moreover, free trade with ASEAN is allowed in order to boost exports in the country.
  • The Indian government is making huge investments under the Scheme for Integrated Textile Parks (SITP) and Technology Upgradation Fund Scheme to encourage more private equity in order to train the workforce.
  • The Cabinet Committee on Economic Affairs (CCEA), Government of India has approved a new skill development scheme for capacity building in the textile sector with an outlay of US$ 202.9 Million from 2017-18 to 2019-20.
  • The Future Group is planning to open 80 new stores under its affordable fashion format, FBB and is targeting the sales of 230 million units of garments by March 2018, This number is further expected to grow to 800 Million units by the year 2021.
  • Max Fashion, a part of Dubai based Landmark Group, plans to expand its sales network to 400 stores in 120 cities by investing the US $60 Million in the next 4 years.

To conclude, programs like Skill India and Make-in-India, along with continuous development and growth in the management consulting firms in India for foreign companies, is working in favor of the developments in the Indian textile industry. The access to skilled manpower and a good market for textile products, the industry is becoming competitive in the global market. With proper market entry strategy for global giants in the market, the future for the Indian textile industry looks promising, buoyed by both strong domestic consumption as well as export demand.

Source-

https://www.ibef.org/industry/textiles.aspx

http://www.sriyadithatextile.com/home/interviews/opportunities-for-indian-textile-industry

https://crimsonpublishers.com/tteft/pdf/TTEFT.000538.pdf