India is one of the world’s fastest growing major economies, with numerous investment opportunities. India’s GDP is growing at a healthy rate, which is expected to continue. The government of India aims to achieve a GDP of $5 trillion by FY 2025, which opens up numerous opportunities for investment across sectors.
Whether it is prioritising macroeconomic stability by establishing a framework to combat inflation, doing GST reforms, creating a common market, opening new sectors, privatisation, or infrastructure development, India has effectively overcome the current challenges with a strong political will.
1. Enormous Market Potential
India’s current population of 1.3 billion, which is growing at a 1.1% annual rate, is expected to overtake China as the most populous country by 2024. This provides enormous market potential for a wide range of products and services across industries. In addition, rising per capita income and Purchasing Power Parity (PPP) will create a market for a plethora of new products and services. India has a young working population that will be a key driver of long-term economic growth in the country. India’s median population age is between 28 and 30 years.
2. Govt Support, Reforms and Policies
The world’s leading corporations are looking for investment opportunities in the Indian market. India’s domestic market is also appealing, and there have been portfolio flows and reasonable inflows in recent months. Overall, India remains a very appealing destination for direct and portfolio investment, with investors appreciating the macroeconomic stability that this government has been willing to impose even in difficult circumstances. Global investors are interested in India due to its apparent stability in inflation, fiscal deficit, and growth.
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3. Low Manufacturing Costs
There is no denying that infrastructure is the foundation of the development arch. India has made tremendous progress in infrastructure development. Finance Minister Nirmala Sitharaman has proposed the National Infrastructure Pipeline to attract infrastructure investment. It is critical to reaching the goal of a $5 trillion economy by 2025. India has one of the world’s lowest manufacturing costs and scalability. According to a BCG report, India ranks second among world countries in terms of lowest manufacturing costs.
4. Young and abundant manpower
India has one of the world’s youngest populations, with more than half of the population under the age of 25 and more than 65% under the age of 35. The average age of the Indian population is expected to be 29 years old by 2020. This provides a consistent supply of labour at a low cost. India’s skilled and semi-skilled workforce is a valuable human resource. Labor is cheap, which lowers production costs and increases competitiveness.
5. Rapid Business Reforms
The country’s purchasing power is enormous. These elements will undoubtedly entice any investor. No multinational can overlook the fact that key manufacturing sites and key suppliers are easily accessible from Indian manufacturing hubs. As a result, the development cost is significantly reduced. India is rapidly implementing business reforms. Recent reforms have included changes to FDI policy, the implementation of the Goods and Services Tax (GST), and other business-related reforms that have improved the Ease of Doing Business.
6. Favourable Industrial Climate
With appealing industrial policies, programmes such as Skill India and Digital India, and significant investments in industrial corridors, seaports, airports, roads, and railways, India provides a favourable investment climate for manufacturing firms.
(By Ravi Singhal, CEO, GCL)
