India is a vibrant, diverse and rapidly expanding nation, predicted to be in the top three global economies by 2030. It is widely accepted that the BJP Administration, India’s ruling party, which came into power in 2014, has adopted a more business like approach, reduced red tape and enhanced the global investor perception of India as a business destination.
With a population of 1.3 billion people, India is often described as having the three D’s to its credit - Democracy, Demography and Demand. The combination of these factors has resulted in major policy reforms, internal change and the introduction of dynamic investment programmes aimed at stimulating entrepreneurship, infrastructure growth and technological innovation.
Since the opening up of the Indian economy to foreign investment in 1991 and the ongoing liberalisation process, several industry sectors are now open for foreign direct investment. As the economy is growing and reforming at unprecedented levels, there are tremendous opportunities for foreign businesses of all sectors to tap the Indian market.
The UK remains the largest G20 investor in India with more than 500 British businesses operating in country. Prime Minister May’s India trade visit of November 2016, being her first trip to a non EU-nation following her appointment as Prime Minister, was a strong demonstration of the huge potential for our two countries to work together in forging new and wider collaborations.
But for overseas businesses seeking global growth and access to new markets, what are the key opportunities in India for trade, investment and economic collaboration? We have set out below a summary of the current initiatives promoting international investment into India.
1. Make in India
Already recognised as the World’s top outsourcing destination, this initiative focuses on growing India’s manufacturing industry for selling to the domestic market, South Asia and exporting globally from India. The Make in India initiative was launched by the Government of India in 2014 as part of a wider flagship campaign aimed at encouraging domestic and global manufacturing in India, job creation and skill enhancement.
India offers huge potential for low cost manufacturing, combined with high quality manpower and a domestic fuelled demand for luxury goods and services. As part of the incentives, Indian states and cities offer investor friendly policies, industrial clusters, subsidised land rates and exciting business opportunities for foreign entities to collaborate and connect with this high octane market.
Under this particular initiative, the Government has identified 25 key industry sectors that show high growth potential. Investing in a medium to long term strategy in core infrastructure projects such as road, rail, energy (particularly renewable energy) and real estate will help stimulate further domestic growth and innovation. As well as more traditional sectors such as automobiles, aviation, construction and food processing there are emerging sectors such as media, entertainment and tourism included within this important initiative.
2. Digital India
This ambitious programme was launched to transform India into a digitally empowered society and knowledge economy. The aim is to improve access to Government services in rural and urban areas by utilising technologies and building online service platforms to link up citizens with public services. Connected with this initiative is the creation of new industrial hot spots such as the Delhi - Mumbai Industrial Corridor which will see the roll out of further high quality digital connections, products and services.
Post demonetization of Indian currency which took place in November 2016, the digital economy is an area of significant partnership between the UK and India, especially as this major reform is expected to help India leap frog into the digital banking era and promote cashless transfers over the coming months and years. New business opportunities for knowledge intense industries such as life sciences, digital technologies and fintech are untapped areas where India requires World class expertise and innovation.
3. Smart Cities Programme
This innovative initiative aims to build 100 smart cities across India to meet with the growing demands of urbanisation. The first 20 cities have been identified and the vision is to provide smart solutions in these cities for better overall infrastructure, general connectivity and improved quality of life for residents through the provision of IT platforms. UK businesses can help with sharing cutting edge technologies, planning, designing and building these smart cities with its unrivalled expertise in consulting, science, research, development and project management skills.
4. Skill India
With approximately 50% of its citizens below the age of 25, India has the World’s largest youth population. This initiative aims to skill and train millions of Indians in a range of skills. This programme and other related initiatives offer entrepreneurs, education providers and edtech companies tremendous partnership opportunities for plugging teaching requirements, vocational training, practical business skills training, professional training and innovation within India’s public and private sectors.
5. Clean India
As the largest ever cleanliness campaign, this initiative seeks to clean the streets, roads, cities, towns and villages of India. In addition to improving the general hygiene and standards of wellbeing, it entails the construction of thousands of toilets in rural areas and installing, cleaning and recycling sewage water which will help improve living standards. The opportunities for foreign businesses range from supplying sustainable technologies, through to water treatment solutions and waste management.
The range of measures and initiative set out above cover almost every sector. Spanning across a broad range of industries, the opportunities seek to facilitate foreign investment into India and promote cross border collaborations. There is a limited window of opportunity to strike, engage and become part of the Indian growth story.
For more information please contact Mark Blunden.
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