India: Creating Business Opportunities Out Of A Crisis
As the Coronavirus pandemic spread of out China in the latter part of 2019, early 2020, countries across the world were left trying to respond to a situation most couldn’t have imagined outside of a paper exercise just a few months before. The response included ‘lockdowns’, which saw businesses asking staff to work from home, or not work at all. It wasn’t long before both companies and countries began to count the economic cost of Covid-19.
India wasn’t exempt from the Covid-19 pandemic. However, thanks to the government’s rapid response (informed by previous Ebola and Nipah outbreaks), the impact was much less than in other countries. The country immediately quarantined all incoming travellers, for example, and cancelled mass gatherings. As a result, Indian infection and death rates remain low; an illustration of this is India has six deaths per million vs 611 in the UK.
Business Opportunities In India Post-Lockdown
India’s low infection and death rates mean they are already reducing their restrictive lockdown measures and planning to get back to work in a post-Coronavirus world. And, while this world may initially seem like one with few opportunities, the reality is now is a great time for companies looking to invest in business opportunities in India. Here’s why:
India’s government is focused on its economy. In fact, it’s one of the ‘five pillars of self-reliance’ recently announced by Prime Minister Modi, along with a $280 billion stimulus package in response to the pandemic. Equivalent to 10% of India’s GDP, it’s designed to reduce economic reliance on other countries. In his announcement, the Prime Minister asked citizens to buy domestic products to drive the country forward. For companies looking to set-up in India, therefore, now’s a good time to do so.
Investing in an Indian company is exactly what Facebook did recently when they bought a 9.99% share in Jio. While India is already Facebook’s biggest market, its partnership with Jio will allow it to expand its footprint further, reaching a wider audience, and move into other e-commerce sectors.
As one of the fastest-growing economies in the world, there are lots of Indian businesses that are thriving and would offer great investment opportunities for companies wanting to get their ‘foot in the door’ of the Indian market.
One of the reasons India’s economy is growing so rapidly is its workforce. India is a young country. By 2022, it will have the youngest population in the world; 65% will be of working age. This offers great opportunities for companies looking to set up offices or manufacturing facilities because there are plenty of potential employees. Furthermore, a growing number of these employees have disposable income. This seems to be part of Apple’s reasoning as they look to move manufacturing from China to India. They sell $1.5bn of phones in India but produce less than $0.5bn locally.
India also benefits for having many highly-qualified and trained individuals that are seen as a top talent for many businesses locally and globally.
Finally, there are structural reforms across the Indian states. Very much like the Prime Minister’s recent announcement, states have begun announcing reforms designed to restart their local economies after the lockdown and attract business previously destined for China.
In Maharashtra, for example, they are introducing ‘mega permissions’ for companies looking to invest, making it easier for them to set up and start operating quickly. They are also relaxing labour laws, as is Gujarat.
All this means there really isn’t a better time to invest in India, especially for companies looking to increase their global footprint and customer base as well as take advantage of a wide range of financial incentives and the high levels of talent that India can provide.