International Expansion to India: A Guide

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Expanding your business abroad is a long, complex process with many factors to weigh up, and every country offers different opportunities and challenges that will suit some companies more than others.

For any business going global, India is an increasingly viable option, with a fast-growing economy and labour force. But in order to decide if it’s the right move for your company, you must take a more detailed look at what the country has to offer and how that relates to your business.

The Indian Economy

India is a burgeoning economy. According to a National Bureau of Economic Research report, the country has more than doubled its GDP per capita since the 1980s. Located right in the middle of South Asia, India is the seventh largest economy in the world, and has a population of approximately 1,200 million people – the second most populous in the world. It also has the world’s second largest labour force. India’s cities in particular are expanding at unprecedented rates.

Choosing Your Location

The country is so vast that the challenges and benefits of expanding your business there will partially depend on which part of the country you choose to settle in.

North India is generally not as economically and commercially developed as other parts of the country, but has some strong sectors, including renewable energy, automotive and medical/consumer goods. This part of the country also has significant wealth, with Punjab in particular enjoying a good relationship with the US, and a strong consumer culture that represents one of India’s biggest markets for luxury goods.

India’s western region is also economically strong in many sectors, including renewable energy, textiles, wine, pharmaceuticals and steel, to name a few. It has seen good rates of economic growth and a reduction in poverty, creating a growing consumer class with disposable income and an educated workforce who increasingly desire western products.

And then there’s Eastern India, whose many ports serve as a gateway to Southeast Asia. The major sectors in this region include metals and minerals, agriculture, oil and gas and services.

Important Factors to Consider

The main benefits of expanding your business to India more generally include a rising consumer class with expanding disposable incomes, and the fact that English is widely spoken across the country – a huge bonus for companies going international.

However, businesses need to be relatively flexible when expanding to India. For example, the culture may be very different to what you’re used to. Meetings can be rescheduled at short notice – a practice called ‘preponing,’ which means to move a meeting to earlier than originally planned. If your company can be quite flexible in this way, then this could work to your advantage – otherwise, it could be quite a stressful way to operate and mean you miss out on business opportunities.

India can be very hierarchical in the office environment – which also may be better suited to companies with a more traditional structure.

Expanding to India will inevitably mean a huge cultural shift that requires a lot of preparation up front. Despite economic growth, almost half live on less than £1 per day, and infrastructure problems, such as with roads, railways and ports, as well as with education, power grids and telecommunications, still persist in some parts of the country.

International expansion to any region can be a complex affair, and your company might benefit from seeking the advice of international expansion experts, such as Galvin International, who can help you determine and then implementthe best approach for your business.