Come, Invest in India

Come, Invest in India

Post Covid-19 Pandemic, a new world order is set to emerge. Priorities set to change. Many “New normals” are going to emerge. The “renewed thinking” will also apply to growth strategies of international companies / business / small & medium entrepreneurs.

The fight for supremacy in technology and military, the differences between US-China on trade, intellectual property rights, and geo-political issues, are here to stay. Therefore, foreign companies which heavily depended on single country may now want to look to diversify the risk to their supply chain by moving out of that particular country. And India offers them the best alternative.

India, the world’s fifth largest economy with an abundant labour force, offers the best alternative in terms of depth and size of the markets. With the median age of 27 and around 900 million “working-age” population, India is a young and aspirational economy.

In the past, China used its huge labour force in manufacturing by attracting FDI — it’s time for India to do the same, particularly when foreign firms are looking for an alternative manufacturing base. 

According to a UNDP report, India will have a working age population of 1.14 billion, with rising urbanisation and a populating middle-class by 2025, creating a huge domestic market. India is also a resource-rich country. Therefore, India has its stage set to attract both market-seeking and resource-seeking FDI.

The Prime Minister’s call for Atmanirbhar Bharat (self-reliant India) can be just the right impetus for our domestic manufacturing. The world including India is currently overly dependent on a single country for raw materials and now is the right time to challenge this hegemony, as companies look for alternative manufacturing hubs in their bid to de-risk.

Huge scope exists in sectors such as pharma, electronics, automobiles and defence machinery, not only to be self-reliant but also capture a decent slice of the global supply chain

“Assemble in India for the world” into Make in India

• Make in India (launched in 2017) + Assemble in India for World
• Make In India 2.0 was launched in 2019 and aimed at making India a $5-trillion economy by 2024-25
• In addition to 25 sectors, enhance Focus on futuristic segments – robotics, genomics, chemical feedstock and electrical storages.

Global Gurus are High on India

• “I'm high on Narendra Modi”, says marketing guru Philip Kotler 
• “Narendra Modi has turned India into a magnet”: McKinsey CEO Dominic Barton
• The McKinsey CEO is again advising his clients to bet big on India. "I was not (advising clients to come to India) two years ago because it was complicated... and companies and clients were deeply frustrated with the bureaucracy, no decisions getting made. Companies were saying... let us go to Africa, let us go to Nigeria, let us go to Indonesia, let us just go to the US, but that has changed. I think because if you look at the trends that are going on in the world, India is right in the centre," says Barton.
• "Agriculture and food is going to be one of the biggest businesses in the world right here, the healthcare boom, education boom, advanced analytics," adds Bar

WHY India

• Political Stability 
• Business Friendly Attitude and Policies
• Huge Domestic Market
• Growing Consumer Segments
• Skilled Manpower
• Ancillary and Auxiliary Industries

Why India – Government Initiatives

• In May 2020, The Government of India announced significant initiatives to strengthen the economic credentials of the country and make it one of the strongest economies in the world.
• India is fast becoming home to startup companies focused on high growth areas such as mobility, e-commerce and other vertical specific solutions - creating new markets and driving innovation.
• Current government is striving to move steadily to minimise structural and political bottlenecks and bring back investment and economic performance back to the path.
• Foreign Direct Investment in India averaged 1211.71 USD Million from 1995 until 2016, reaching an all time high of 5670 USD Million in February of 2008 and a record low of -60 USD Million in February of 2014
• Existing government focused high on delivery
• Creating infrastructure 
• Reducing red-tape
• Investment friendly policies

Why India – Ease of Doing Business

• žA jump of 79 positions to 63 in 2019 from 142 in 2014 in World Bank’s Doing Business rankings.
• Various reforms taken by the Government of India have led to increase in India’s ranking in the World Bank’s Ease of Doing Business Index from 130 in 2017 to 100 in 2018.
• India’s ranking in the taxation and insolvency parameters improved by 53 and 33 spots, respectively, on the back of administrative reforms undertaken by the Government of India in the areas of taxation and passage of Insolvency and Bankruptcy Code (IBC), 2016.
• To improve the ease of doing business in the country, the government has taken various initiatives to improve contract enforcement. Over 1,000 redundant legislations have been scrapped.

Atmanirbhar Bharat Abhiyan (or Self-reliant India Mission)

• On May 14, 2020 - Atmanirbhar Bharat Abhiyan (or Self-reliant India Mission) was announced by PM Modi
• It would include an economic package — worth Rs 20 lakh crore (USD 265 Bn) or 10% of India’s GDP in 2019-20 — aimed towards achieving this mission.

Significant Structural Reforms in Key Sectors

1. Coal and Mineral

• Commercial Mining allowed
• Pvt Investments increased

2. Defense

• Enhancing of self-reliance
• Policy Reforms

3. Civil Aviation

• Global Hub for MRO
• More airports thru PPP

4. Power - Pvt of Discoms in UTs

5. Space and Atomic Energy

Other Key Push Factors -

• Enhanced private participation
• Fiscal Stimulus declared to mitigate the impact of Covid-19 on economy (Direct and Indirect measures) 
• Dividend Distribution Tax - India’s top 25 dividend paying MNCs, including HUL, Maruti Suzuki, Nestle, and Colgate-Palmolive, are likely to save more than Rs 2,800 crore collectively after the government’s move to abolish the levy on distributing dividends

Mega Planning

Indian Government has drawn up a list of ten mega clusters across nine states as the most attractive destinations for companies to set shop based on sectoral requirements and tax incentives to promote the country as an alternative business continuity plan destination amid the ongoing Covid-19 pandemic.

1. Noida (Uttar Pradesh)
2. Hyderabad (Telangana)
3. Mumbai (Maharashtra)
4. Pune (Maharashtra)
5. Aurangabad (Maharashtra)
6. Vadodara (Bharuch-Ankleshwar Cluster / Gujarat)
7. Bengaluru (Karnataka)
8. Chennai (Tamil Nadu)
9. Tirupati-Nellore (Andhra Pradesh)

How to Succeed in India?

• In order to succeed in India, it is very essential for a supplier / marketer / brand owner to know its consumers / customers - their types/ behaviors , market potential and future trends for each end-use segment.
• Failures do occur as partners and sales agents lack proper market information (market size, new opportunity, risks etc).
• “One Size Fits All” approach is NOT always implementable / successful in India
• Market segments may emerge as well defined, it is crucial for the local partner as well its foreign partner to be on the same level of understanding as far as the market potential, especially when some of the segments in India are growing faster. This facilitates making MORE achievable sales forecasts / results.

What We Do?

• žCover pan-India assignments / mandates
• End-to-end full-service market research 
• India entry and business consulting
• Partnership approach, “We succeed, when our CLIENT succeeds”
• Serves all Industry and product categories
• Insight generation for New and existing product development.

Business Consulting - India Market Entry, Foreign Investments

• India Entry Studies and Business Plan (Market Sizing & Feasibility)
• Partner / Distributor Identification & Implementation
• Market Development, Customer Identification
• Competitive Landscape
• Government and Foreign Trade
• Regulations and Tariffs
• Company Formation, Registrations
• Payroll and Taxation
• Location Analysis
• Due Diligence
• Mergers /Partnerships

 

"Your best partner for Succeeding in India"

Happy to share more industry specific inputs. Please do get in touch with us, TODAY!

 

dhan1011@gmail.com

https://www.linkedin.com/in/dhananjay-deshmukh-78ab107

Welcome.

Namaste. 

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