Financial Times - Trade and investment

India has emerged as a global business and economic super power and this opens out opportunities for Sri Lanka – in the same way Hong Kong was to China

The exciting new playing field for the global industry is the enticing Indian economy fueled by growth along with the vast potential for overseas investment and active encouragement given to the entry of foreign players. No company, of any size, aspiring to be a global player can, for long ignore this opportunity which is expected to become one of the top three emerging economies in the near future. Currently India is the fifth largest economy in the world (ranking above France, Italy, the United Kingdom, and Russia) and has the third largest GDP $3.319 trillion in Asia. It is also the largest among emerging nations with a GDP growth rate of 8.1%, making it the fastest growing democratic economy. India’s foreign exchange reserves are pegged at more than US$ 150 billion, with FDI inflows exceeding US$ 10 billion, exports registered a whopping 25% growth is putting India right up at the top as a global growth engine.

India is also one of the few markets in the world which offers high prospects for growth and earning potential in practically all areas of business. Soaring economic growth and an increasingly affluent middle class, with growing aspirations and a craving for newer consumer experiences, make India an attractive market for domestic and international players.

India accounts for 20% of the world’s consumption. India has the second largest population and also the largest consuming class in the world. This consuming class is very upbeat about the outlook for the coming year. A recent AC Nielson global survey on consumer confidence puts India ahead of the pack of 42 countries covered in the research.

This confidence is supported by rising disposable income, willingness to spend, predisposition towards global brands and global consumption habits influenced by media, connectivity, communication and international travel.

Young adults in India are ambitious, hard working and have money to spend on their lifestyle – they are brand-conscious and internationally aware of what their counterparts in the West are wearing and buying, according to a recent survey.

India is inviting FDI in almost all sectors of the economy. This is the right time for companies to invest in India. India has been rated a better investment destination on eight investment parameters than Russia, China, Malaysia, Thailand, Brazil, Australia, UK, France and Singapore in a recent survey by Federation of Indian Chambers of Commerce & Industry (FICCI) on the India Perceptions, by 135 MNCs present in India. Profitability of MNCs in the Indian markets is a major attraction for investing in the country. About 62 per cent respondents reported making profit in their Indian operations while 9 per cent are breaking even.

India has been a successful market for the national and international companies. Some of the top fortune 500 companies who are leveraging on India’s strengths for growth and expansion cross industry cross segments are in food and beverages (e.g. Coca-Cola, PepsiCo), consumer durables (e.g. Samsung, Philips, LG, Canon, Electrolux), automotives (e.g. General Motors, Ford, Toyota, Bosch, Visteon), computers and software services (e.g. IBM, Sun, Honeywell), pharmaceuticals (e.g. GSK, Pfizer), consumer products (e.g. Unilever), financial services (e.g. Citigroup, HSBC), insurance (e.g. Allianz, Prudential), engineering (Siemens, ABB, Alstom, Bombardier), logistics (e.g. FedEx) and petrochemicals and chemicals (e.g. BP, Shell, BASF). A survey “Fortune 500 Companies in India: Success Stories”, by Indo-American Chamber of Commerce, highlights the Key Success Factors in India as… localizing the supply chain to drive the Indian advantage; developing markets by educating consumers; developing new products specifically for the Indian market and developing innovative marketing and distribution channels.

Despite a steady and growing market size, abundant availability of natural resources for manufacturing, cost attractiveness, reliable business community, high levels of intellectual manpower, engineering expertise and a reform process that has brought about impressive economic liberalization, the Indian market is largely untapped and provides a huge potential for international players to foray.

At the same time, the market is evolving at a rapid pace - in terms of consumers, investment opportunities and as more and more companies are trying to grab the chunk of the Indian advantage, the competition in each sector is increasing.

Courtesy of Bangalore-based The Intelligence Hub of MTI Consulting India

We believe that the organizations who will realize the potential of the opportunity called “India” and will be able to capitalize on it, will flourish in the long run. Sooner they realize the better profits they’ll reap.

Picture shows the MTI’s Country Manager and International Branding Specialist Subash Bidare (centre) with the rest of the MTI Consulting Bangalore-based Team