Altios International: Doing Business in India
“India welcomes the world to explore economic opportunities our nation has to offer. Guided by the mantra of Reform, Perform and Transform, we are determined to further improve our rankings and scale greater economic growth” says Prime Minister, Narendra Modi
According to World Bank figures for 2017, India has become the world’s sixth largest economy. The current GDP has increased to 6.6 percent in 2017-18 and is expected to grow 7.3 percent in 2018-19. It is further estimated to reach $6 trillion by FY27, thus making India the fifth most attractive market for investments. The country’s Foreign Direct Investment (FDI) inflows have reached $209 billion during April 2014 – December 2017 with the maximum contribution coming from sectors such as services, computer software and hardware, telecommunications, construction, trading and automobiles.
The Indian government has taken certain initiatives in order to facilitate "Ease of Doing Business in India". With the implementation of a new tax system called the Goods and Service Tax, or GST (equivalent to French VAT) – India has become an increasingly tax compliant society. To make India an investor friendly economy , the government has also launched certain campaigns to spur economic development. This includes:
- Digital India (ensuring digital accessibility to government services for Indian citizens),
- Skill India (training Indian youth in new skills),
- Make in India (boosting the manufacturing sector and increasing employment)
- Startup India (creating three pillars to support young entrepreneurs: simplification and handholding, support through funding and incentives, industry-academia partnerships and incubation)
- Smart Cities (urban renewal)
According to the International Monetary Fund, India is projected to generate growth of 7.4% in 2018 and 7.8% in 2019, boosted by household spending and the tax reform.
Trade Statistics: According to the department of commerce, total exports in May 2018 were valued at $28.86 billion compared to $24.01 billion during May 2017 exhibiting a positive growth of over 20%. Some of the major export commodities include engineering goods, petroleum products, chemicals, drugs and pharmaceuticals & cotton yarn/fabs/made-ups/, handloom products etc. Total imports in May 2018 were valued at $43.48 billion compared to $37.86 billion the previous year, thus registering a positive growth of 9.72%. Major commodities of import with high growth include petroleum, crude & products, electronic goods, machinery, electrical and non-electrical, coal, coke and briquettes, organic and inorganic chemicals. Major trading partners include the EU, China, United States and the United Arab Emirates.
India has one of the fastest growing service sectors in the world by becoming a major exporter of IT services, Business Process Outsourcing (BPO) services, and software services with $154 billion in revenue in FY 2017. And, it is forging ahead with changes to the infrastructure, healthcare and automobile sectors with a significant effort being made on green technology.
Defense and civil aviation are also expecting significant expansion following an increase in the upper limit of foreign direct investments (FDI) in defense to 49%. With the launch of the Digital India campaign, demand for technology related services such as constructing a broadband infrastructure, creating identity solutions, payment systems, web or mobile based delivery structures is also expected to increase.
ALTIOS International has been present in India since 2008 and offers a complete portfolio of advisory and subsidiary management services to clients from over 18 countries. With a local office in Delhi backed by a highly seasoned team of consultants, engineers and finance professionals, ALTIOS helps clients enter and succeed in the Indian market.
Madhav Raina-Thapan, Managing Director, ALTIOS India, describes how the cultural difference and governance system makes doing business in India relatively more complex than in the West. On top of this, consumer price sensitivity makes it even more challenging for companies from the west to adapt to the needs of the market.
“With an experience gained over the many years of assisting Western clients on the market, ALTIOS India has been able to create its own niche service offering for the market. We have been able to assist clients from initial market entry assessment
s to end-to-end investment advisory and execution on greenfield/brownfield projects.
With major policy overhauling carried out in last few years and recent thrust being given to Make in India initiatives, the country is set to attract investors who not only see India as a potential market but also as a manufacturing base for other Asian markets.
Population : 1.3 bn inhabitants
Capital: New Delhi
GDP (2018): $2.848 tn
Currency: Indian Rupee (INR)
Unemployment: 8.8% (2017)
India Brand Equity Foundation (IBEF) https://www.ibef.org/economy/indian-economy-overview
Ministry of Commerce and Industry http://commerce.gov.in/#
UK India Business Council https://www.ukibc.com/india-guide/why-india/emerging-sectors/