Business Dynamics in India

A curtain raiser with 5 graphic insights

The biggest democracy & the fastest growing big economy – estimated to be 5 trillion USD in 2027, India also boasts having the youngest demography among OECD countries.

With a middleclass, bigger that the population of EU and a young population with disposable incomes, the question for European companies in not “if” but “how” to grow in India. India strategy is no longer an option but an imperative today for European companies – irrespective of their size and sector.

A few datapoints to start-off our conversation:

1. Similar to the European Union – only a bit older…

It is critical mapping your offerings, partner or supplier search, with clusters, opportunity spaces and local advantages. A comparative analysis of location, industry clusters, central and local incentives and availability of relevant talent would help you take the right decision and build synergies.

2. The middle-class

Estimated to be 432 million strong in 2021 and growing at a frantic pace, the India middle-class outnumbers the entire population of the European Union!

With growing disposable incomes and upward aspirational mobility, the time is ripe for European brands to enter the market with a long-term view. Understanding the customer, adapting to the local taste and intelligent pricing are critical factors to success.

3. Ease of setting up in India (with/without Indian partner)

Setting up a company in India is simple. You can choose to have a local entity or a foreign one – you do not need a local partner unless you operate in the few restricted sectors.

You can decide on the structure based on your business objective while keeping in mind the tax structure as mentioned in the next point.

4. Attractive Tax rates and DTAA treaties

India has Double Tax Avoidance Treaties with most of the countries around the globe. With the simplified tax structure and the Digitalization of the Tax Office, your life is much easier – working on the kind of repatriation strategy or any relevant aspect.

5. Digital India, and a thriving start-up ecosystem with 102 Unicorns

The “India Digital Stack” is revolutionizing life and Doing business in India – from Digital payments to filing returns to tracking shipments, and beyond.

 The start-up ecosystem – with more than 100 unicorns already thriving – is dynamic, and thanks to a huge talent-pool, is making life easier across sectors including healthcare, food, retail, education, industry and governance.

Some take-aways:

• The fastest growing economy with a huge middle-class with growing disposable incomes, – you are already late if you are not in India!
• Like the EU India has inherent complexity and homogeneity – which needs to be mapped and understood for nuances cultural, historical, linguistic, etc. to “know” and “locate” your target customer
• Legal and regulatory frameworks are very similar to EU – even the business language is English!
• It is important to do your homework and fine-tune your strategies – local knowledge and insights are critical
• Digital India is open for you to participate a be a part of the growth story. India is not only the biggest destination for IT development but one of the most sophisticated digital ecosystems

We shall be following up this graphic curtain raiser with some focused insights – on sectors, clusters, geographies and cultural aspects – please feel free to share your suggestions and ideas on what you would like me to talk about…