The best route for global business
expansion in India
The idea of starting a business in India is observed to be a profitable
one from various aspects.
India is one of the best countries to expand your business
internationally!
Before thinking of starting any business, a clear understanding of the
location of doing business, its market, the culture of work, and the
benefits to your business is necessary. It is also important to know
which route to be adopted to kickstart a business. We will be doing
exactly that through this blog!
Keep reading as we will take you through how India has become a
dream destination for business expansion. We will also make you
aware of the business models which can be used by small and
medium-sized enterprises (SMEs) for establishing the business in
India.
Indian culture
India is always known for its heritage and traditions. It is one of the
oldest civilizations that harbors a unique and complex diversity, that
gracefully embraces change and growth.
When we say India, the beautiful Taj Mahal, and the serene Bay of
Bengal come to our mind. But as we explore more, we see that India
offers a kaleidoscopic variety not just in culture but also in art,
spirituality, philosophy, and trade. Twenty-seven states of India have
their dance forms, music, craft, cuisine, and languages, making India
the perfect marketplace of South Asia.
As of today, India is the second-most populous country. It is one of the
fastest-growing economies in the world and is showing all-rounded
progress since its independence. India’s development can be seen
from its research, education system, space programs, technological
advancements, and trade activities.
India is catching up with other developed countries and creating better
work and employment opportunities. Be it work-life balance, work
environment, or relationship with other employees, India is always
providing a relaxed, productive, and progressive working culture for
every employee in India.
Coming to the business ethos of India, the government has played a
key role in empowering various industries and sectors. These
emerging industries in India, offer tremendous growth opportunities for
small and medium-sized businesses (SMEs).
Government initiatives for business development in India
The government of India is playing an important role in empowering
businesses in India. It is constantly inculcating new programs and
initiatives for growing business opportunities in every city and state in
the country.
For instance, the government of India is leading by developing
mobile-friendly websites and apps for citizens, giving a push to the
‘mobile-first’ mindset. This has inspired every business to make a shift
towards using online platforms with a mobile-focused approach,
making Indian customers and businesses tech savvy.
The government has launched the National Broadband Mission for
providing broadband access to all villages by 2022. You may have
also heard about the widely promoted ‘Make In India’ initiative. It is
designed to transform India into a global manufacturing hub. The
government’s India Innovation Growth Programme 2.0 (IIGP), Startup
India along with Make in India programs are enhancing the tech skills
of the population of India and encouraging young entrepreneurs and
inventors to foster innovation.
In addition, India has set a goal of developing 10 Million future-ready
tech professionals through the Ministry of Education’s Digital Skilling
program where it has designed apprenticeship programs in private
partnerships with private sector corporates in 72 different areas
including Artificial Intelligence, Cloud Computing, and Cybersecurity.
In fact, the program ‘Digital India’ introduced by the government has
given a solid boost to digitization in India. It has motivated many
companies to function remotely and transform their ways of doing
business. This proved to be helpful for companies to flourish their
business, especially in tough times such as the COVID-19 pandemic.
The government digital platform, CoWIN is a shining example. It is a
digital application used extensively for obtaining information regarding
vaccine drives during the COVID-19 pandemic.
SahiPay is another digital platform that aims to provide easy access to
insurance services. It has pushed the Fintech industry revolution
further, by giving doorstep services for banking, insurance, mutual
funds, EMI collection, and travel booking.
To understand and appreciate new India better, it is important to note
its economic growth in recent years.
Economic changes in India
The Indian economy has the distinction of being one of the
fastest-growing economies in the world. Political stability after 2014,
liberalization and progressive business policy have unleashed the
growth of the Indian economy.
As per the Reserve Bank of India, the economic growth rate for
2022-23 is projected to be at 7.8%. India is currently a middle-income
country and is the world’s fifth-largest economy. According to the
EY-FICCI (The Ernst & Young and Federation of Indian Chambers of
Commerce and Industry) report, the GDP ratio is expected to reach
0.4% by 2025 from 0.38% in 2019.
The service and industrial sectors account for 54% and 18%
respectively, of the country’s GDP. India is trying to recover from the
hit it took during the pandemic and has also retained its position as the
third-largest in the world in terms of purchasing power parity (PPP).
Emerging businesses sectors In India
Increasing investments by the government, greater political stability,
growing consumer demand, increase the flow of FDIs, and constantly
improving business trends are pushing India to explore and expand
various business sectors.
India is now a business powerhouse for entertainment,
pharmaceuticals, healthcare services, education, agriculture, logistics,
Information technology, telecommunication, textile, and infrastructure.
In recent years, India has shown huge development in fields such as
space technology, entertainment, and even trade. A closer look at
these emerging industries in India provides a better picture.
Information Technology
India is known globally to have a technologically driven knowledge
economy due to its Information Technology (IT) industry. The IT
industry plays an important role in enhancing the productivity of almost
every other country sector. Over the last decade, India has become
an IT hub for many software companies across the world. It is now
known as the world’s largest sourcing destination for the IT industry.
The growth of the IT and business service market in India is projected
to reach $19.93 billion, by 2025.
Telecommunication
The Indian telecom industry has grown at a rapid pace
post-liberalization. New technology such as Wi-max, Virtual Private
Network (VPN), and data services have been instrumental in
enhancing business in the IT and BPO sectors. It is estimated that
over the next few years, the rising use of mobile phones and reduction
in data costs will add 500 million new internet users approximately,
thereby creating various new business opportunities in India.
Additionally, by 2025, India will start to have 5G-centric technologies
such as robotics, cloud computing, AI, etc.
Entertainment
The entertainment industry in India has grown out of its
black-and-white era and entered multiplex and Over-The-Top (OTT)
platforms such as Netflix, Amazon Prime, etc. This is because of the
advances in virtual reality and the use of 3D and special effects by
developers.
This has also provided new business opportunities to ancillary sectors
such as dubbing, recording studios, animation, cinematography, and
other content-creating options.
Aerospace and Defense
India is the third largest military spender. It is also known to have the
second largest armed force in the world. India is revolutionizing its
defense sector, by empowering startups and research projects. The
government has also designed a few schemes such as DTIS (Defence
Testing Infrastructure Scheme) and iDEX (innovations for Defence
Excellence) to uplift the defense and private sectors.
Commercial space sector
India’s commercial space stands out as one of the most promising
business sectors in the world. India’s space program, ISRO (Indian
Space Research Organization), is the sixth largest space agency in
the world, harboring a large fleet of remote sensing and
communication satellites. India’s space sector has earned worldwide
recognition for its successful Mars mission lunar probes and for
launching 104 satellites in one mission for fraction of the cost of
western nations.
Fintech India
Fintech or BFSI (Banking, financial services, and insurance) has
revolutionized the way financial services are provided in India. The
fintech startup ecosystem saw a huge capital inflow to reach $4.6
billion funding across 160 deals in the first half of 2020. Fintech is also
bringing in newer trends in various industries. In addition, government
financial initiatives such as Jan Dhan Yojana and India Stack are
accelerating the digital revolution even in rural parts of the country.
Textile
India is now among the world’s largest producers and consumers of
cotton. As per the Ministry of Textiles, India recorded its highest-ever
textile and apparel exports of $44.4 billion, in the financial year
2021-22. Availability of raw materials and skilled manpower,
increasing domestic market, and the rise of e-commerce are a few
growth drivers of the textile industry in India.
Agriculture
The agricultural sector is a major source of employment for India’s
population and hence proves to be an important driving factor of the
Indian economy. The agriculture sector accounts for 28% of the
country’s GDP. The increasing adoption of drones, remote sensing
technologies, and advanced irrigation systems have provided a boost
to the agricultural market in India.
Trade routes of India
India is constantly exploring overseas markets to develop new
business opportunities. The Department of Commerce has strategized
various policies and procedures for the expansion of trade and export
services.
You will find it interesting to know that Indian export is not limited to
spices and cotton, but has crossed all barriers and become a major
exporter of electronics and electrical equipment, pharmaceutical
products, AI technology, vehicles, and various software services.
As of 2020, India is at number 18 in total exports and is also the
world’s largest exporter of diamonds. It has also established markets
in countries such as the U.S, Singapore, China, the Netherlands,
Australia, Turkey, and so on. For more in-depth information regarding
India’s top trade partners, refer to the Observatory of Economic
Complexity. It also provides information regarding the import and
export evaluation of India.
Service exports have taken a large leap in recent years. The IT and
Information Technology Enabled Services (ITES) are contributing
almost 50% of India’s total export services. The service exports scaled
up to $148.3 billion in the year 2020-21. This growth was despite the
effect of COVID-19 pandemic on India’s travel, tourism, aviation, and
hospitality sectors.
The new-age digital business in India
With the availability of smartphones and high-speed Internet
connectivity, India is on its way to becoming a digitally advanced
country. Emerging technologies such as Artificial Intelligence (AI),
Cloud, and autonomous systems have caused a rapid digital
transformation and led to business expansion in India.
This transformation has helped in the development of various sectors.
For instance, in the healthcare sector, the development of
teleconsultation and telemedicine has made it easy to provide
healthcare services in remote and rural areas of India.
The use of advanced banking applications and websites has made it
easy to perform online transactions at any time of the day through
smartphones and tablets. UPI payment options like PhonePe, Google
Pay, and BHIM have saved our time and efforts. The time when we
stood in lines for paying our bills has definitely ended!
Digital payments are used frequently for purchasing entertainment and
sports tickets. Moreover, digitization has led to the growth of
e-commerce and therefore led to global business expansion in India.
You name any brand for buying any product, from merchandise,
jewelry, footwear, and other accessories to furniture and housing
appliances. You search for it and it’s available on every digital
platform.
There are many startup ideas that took the digital route and developed
successful business models. There are 105 Indian startups that have
already made it to the unicorn club as of July 2022.
One such startup example is Dream11, a fantasy sports platform
founded in 2008. The company is developed to let customers play
fantasy sports such as hockey, cricket, football, and many more. It has
raised over $400 million and became the first Indian fantasy sports
platform to enter the unicorn list in 2019.
India as a business destination for all
India has an open economy and hence provides many investment
opportunities for FDI in many sectors. As per United Nations
Conference on Trade and Development (UNCTAD), India scaled up to
the 7th position for Foreign Direct Investment (FDI) in the world. India
has also jumped 14 places and landed in 63rd position on the World
Bank’s Doing Business 2020 study.
The ease of doing business in India and its advantages for SME
For many years, India is considered one of the most profitable
destinations for testing business. Factors like digital advancements,
adapting to remote working, and the high availability of a skilled and
educated workforce have encouraged various business enthusiasts to
establish their businesses in India. A few examples of such companies
are Procter & Gamble (P&G), Sony Corporation, Nike, CITI Group,
Amazon, Uber, Unilever, and Google. The ease of doing business in
India can be best understood by the success story of Google Pay.
Google Pay, was initially designed as a Google wallet. It was launched
in India as Tez app in September 2017 and later rebranded to Google
Pay in August 2018. Within a year from its debut, Google Pay was
being used by more than 22 million people and businesses every
month and recorded transitions worth over $30 Billion.
Sundar Pichai, the CEO of Google, said that the debut of Google Pay
in the Indian market has been instrumental in understanding how to
revamp its digital payment model globally. As of 2021, using the India
model, Google Pay was launched in 42 countries worldwide. In
addition, with the rising number of online payments and UPI
transactions, the Indian economy is known as one of the leading
innovators in digital finance.
It is now clear, how India offers an attractive market for testing foreign
businesses. So how can you establish your business in India? What
are the different business models being used to expand your business
in India?
There are multiple options available for you. At the end of this blog, we
have shared the evolution of business models and also an emerging
business model, International PEO/EOR.
Remote hiring, a new way of conducting business in India
India offers a large pool of English speaking population that is well
versed with technology. It is also a favorable workplace due to
employee benefits and employee-friendly work policies. India’s work
culture is constantly evolving and developing as per requirement. For
Instance, during the COVID-19 pandemic, employees of India adapted
to remote working.
Now, well into the pandemic, employees were able to set a precise
workflow by using online portals and tools like Zoom meetings.
Companies in India have also gotten accustomed to remote hiring and
onboarding. If this interests you then please, refer to our blog Building
remote teams in India. It will give you a comprehensive overview of
everything you need to know about hiring remote employees in India.
Evolution of business models in India
For many years, the conventional way of expanding your business in
India was by either directly set up an entity or through outsourcing.
These were the ideal options many foreign companies used for doing
business in India.
For instance, International Business Machines (IBM) company,
re-entered India in 1987. Since then, it has expanded its operations by
setting up offices in different cities and states of India. Uber is another
notable example that expanded its business operations in India. It
entered India in 2013 and has been constantly growing in the
ride-sharing space. It has now become one of the most valuable
startups in the world.
Recently, India has witnessed tremendous change and transition in
ways of conducting business. It has now evolved from franchising,
e-commerce, outsourcing, subsidiary formation, and freelancing
options to newer models such as International PEO services or EOR
and remote hiring.
From our experience at Remunance, we can see that most of the
startups and SMEs are making the best use of these new models to
build their remote teams in India. SMEs from more than 16 countries
have taken this quick and cost-effective path to build remote teams of
various sizes ranging from anywhere between 4 to 50 employees.
These new business models will definitely change the way business is
conducted by tapping into the Indian workforce.
How an International PEO/EOR works?
Professional Employer Organization in India or EOR in India provides
services to foreign companies who wish to establish their business in
India. These services are a better alternative to outsourcing. This is
because PEO/EOR handles all the legalities and compliance issues
that are usually faced while outsourcing.
To know more about how PEO services are a better option for entering
the Indian market, refer to our blog PEO..better alternative to
outsourcing
International PEO/EOR is by far the best option for any small and
medium business who wishes to test the Indian market. The
PEO/EOR company will be the legal employer in India, for foreign
companies and take care of all the HR services including employee
recruitment and training, employee benefits, and payroll.
How Remunance helps in expanding your business in India
Every business is different and therefore needs tailor-made business
strategies to align with your goals. Remunance’s PEO/EOR services,
will do exactly the same and provide you with a unique basket of
services that suit your business needs!
Remunance understands the Indian market and its trends. With our
technologically advanced and transparent solutions, we can help you
get started in no time!
Remunance will provide you with comprehensive solutions and
streamline your entire journey of establishing your remote team in
India.
Click here to learn more about Remunance services and how we can
help you
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