Leveraging emerging business opportunities in India
26th July 2023
As one of the world’s fastest growing major economies and an attractive investment destination, India represents a key growth market for South Yorkshire SME businesses, exporters and entrepreneurs with broad-ranging opportunities across various industries
As one of the world’s fastest growing major economies and an attractive investment destination, India represents a key growth market for South Yorkshire SME businesses, exporters and entrepreneurs with broad-ranging opportunities across various industries and sectors. Despite the economic shockwaves and uncertainty arising from the COVID-19 pandemic, global economists foresee tremendous growth potential for the Indian market.
According to several economic institutions and global agencies, India is projected to become the world’s third largest economy by 2030, providing a wealth of new and emerging opportunities for South Yorkshire businesses to participate, expand and invest in the burgeoning market. Given the dynamics, geography, diversity and complexity, business initiatives in India require strategic planning with a careful consideration of cultural sensitives and understanding, market intelligence and support from professional service providers.
In terms of geographic profile, India comprises 28 States and 8 Union Territories. It is clearly not a single “business market” but dynamic in terms of regions and states, each with their own languages, geographies, economic outlooks, cultural practices and consumer preferences. It is often said – there are many Indias within India performing at varying degrees in terms of economic growth and business expansion. Alongside the mega cities like Mumbai, Delhi, Bengaluru, Kolkata and Chennai, there has been an unprecedented expansion of tier two and tier three cities across the nation, offering huge untapped business potential and opportunities.
Recently, the Reserve Bank of India (India’s central bank and banking system’s regulator) has made a forecast that the economy will grow by 6.5% for the 2023 to 2024 fiscal year. Despite the ongoing challenges of the pandemic, India’s economy is poised to grow and expand, contributing positively to the global economy, including sustained fiscal and monetary support, as well as private investments.
In May 2021, the UK and Indian Governments concluded an Enhanced Trade Partnership, as a first step towards a future Free Trade Agreement (FTA). Both Governments are currently in the middle of active and advanced negotiations for concluding an ambitious Free Trade Agreement, expected to be finalized by the end of this year. Leveraging on the expanding bilateral relationships, many UK regions are proactively turbocharging and strategising their business links and networks with India.
New market entrants should focus on developing regional business engagement plans evidenced by local market research so that they can customise their products, technology and services to penetrate local target audiences. In other words, businesses should carefully select and consider defined markets with the highest economic dividend, as different regions have different industry clusters, sectors and economic activities. Working in collaboration with an in-country partner inevitably adds value, credibility and reassurance for UK businesses to navigate the cultural landscape and develop effective strategies tailored to the local markets.
Why India is an attractive market?
- The largest democracy in the world, which offers economic and political stability to foreign investors.
- One of the fastest growing major economies in the world, currently fifth largest and projected to be third largest by 2030.
- The most populous nation in the world with over 1.4 billion people, spread across 28 different states and 8 union territories with regional, cultural and linguistic differences.
- A rapidly burgeoning middle class consumer base, with one of the largest global youth populations.
- Government reforms enabling a pro-business culture and environment.
- Post-Brexit, India has become an even more important market for UK goods, services and technologies.
- UK and India have agreed an Enhanced Trade Partnership (ETP) and 2030 Roadmap for UK-India future relations, which includes doubling bilateral trade within the next decade. The ambitious Roadmap covers five key themes: healthcare; climate change; defence and security; trade and investment; and the people-to-people links.
- UK and India are currently working towards achieving a comprehensive and mutually beneficial Free Trade Agreement (FTA) for which formal negotiations are under progress.
The Government of India’s flagship ‘Make in India’ initiative was launched in 2014, as part of a refreshed focus on energizing the country’s manufacturing sector and expanding its export base. The primary objectives of this major national programme are to attract overseas investment, foster innovation, promote entrepreneurship, enhance skill development, create employment, protect intellectual property rights and strengthen India’s world class manufacturing infrastructure. The programme focuses on 25 key sectors as set out within the dedicated website for this initiative https://www.makeinindia.com.
For Western businesses seeking global supply chain diversification post-pandemic, India provides unique opportunities as an alternative global manufacturing destination for raw materials and products, especially for those businesses seeking to de-risk over reliance on China. It is often said that India has a dual advantage, alongside the Make in India manufacturing programme, it has a rapidly growing middle class with increased purchasing power for luxury goods and services.
India has also emerged as a rapidly expanding innovation-led economy and is the third largest start-up ecosystem globally (after the USA and China), driving significant economic, employment and social growth. With a huge number of internet subscribers and emerging technologies, these dynamic start-ups are providing innovative solutions in areas such as e-commerce, fintech, edtech, medtech and others. In this regard, the technology sector provides substantial opportunities for cross-border collaboration, research and development.
Indian unicorns are also rapidly thriving with over 100 new startups geared to enter the unicorn club by the end of next year. According to Invest India (India’s national investment and promotion agency) the country is home to 108 unicorns as at May 2023 (privately held startup companies with a value of over $1 billion). After creating a successful base, operations and brand in India, many of these start-ups are going global and expanding their international footprint. Examples of well-known unicorns operating in the UK include Ola Cabs, OYO Rooms, BYJU’s amongst others.
The Sheffield Chamber of Commerce, through the Sheffield International trade Centre are delighted to be working with the India Business Group and Sheffield City Council to bring an enhanced level of assistance to South Yorkshire SMEs to make the most of the rapidly developing business relations between India and the UK.
The Sheffield International Trade Centre is ready to offer assistance with all aspects of customs procedures, declarations of Origin and preferential trade rules and regulations. Through our partners we can assist with the special Tax arrangements between the 2 nations, Freight management for air and sea shipments ensuring your import or export dealing with India are always compliant and correct between the 2 customs regimes.
The forthcoming UK-India Free Trade Agreement will open this market for both inward and outward investment to and from South Yorkshire, the benefits will be seen and felt across the full range of business sectors in this region and be equally beneficial for the smaller SME to the largest multinational.
For more information, please contact the team at the Sheffield International Trade Centre by email to email@example.com