‘The UK and India are two countries with an ambitious, confident, global outlook. As the UK leaves the EU and India continues its rise in the world, we should seize the opportunities ahead.’ – Theresa May, 2016
India is a country on the move. With runaway economic growth and widespread reforms, its asserting its position in the global economy. In recent years major multinationals – from Europe, the US and Asia Pacific – have entered the market and found success. Now middle market businesses are looking to get in on the action.
Amid tectonic shifts across the EU, international expansion has shot up the CEO agenda. Many see it is a strategic imperative, a chance to offset uncertainty and shaky returns at home. In RSM’s middle market survey - carried out three months after the referendum - 47 per cent of UK businesses said overseas expansion was now a core part of their growth strategy.
For years, India was widely seen as the outsourcing capital of the world. Today it is building a new reputation: whilst not without some considerable challenges, India is fast-becoming one of the hottest prospects for those in the UK middle market chasing long-term strategic growth. The right preparation and strategy is, however, critical.
An economic growth engine: India is a shining light in the global economy. The IMF predicts that it will this year overtake the UK, its former colonial ruler, to become the fifth largest economy in the world. Prospects remain bright – the country is set to jump into fourth place by 2022.
A demographic dividend: India is home to a young, dynamic and educated workforce. According to Goldman Sachs, there are 96 million college graduates in India, 15 million more than in China. While wages are rising, UK businesses can still secure double-digital cost differentials.
Widespread reform: India’s Prime Minister Narenda Modi rose to power on a clear mandate to reduce business barriers. Whether it’s introducing a national indirect tax system, investing in infrastructure or making it easier to repatriate dividends, the message is clear: India is open for business.
Secure legacy ties: There are few language barriers in India – unlike other BRIC markets, deals are almost always negotiated and sealed in English. In the wake of Brexit, longstanding legacy ties seem to be tightening. India was the first country outside Europe that Prime Minister Theresa May visited following the referendum. While new bilateral agreements are yet to be inked, there are positive indications that the right deal will be secured for both parties.
Over coming months, our Spotlight on India series will explore how UK middle market businesses can harness opportunities in India, while also mitigating risks. For further information and help weighing up expansion options, please contact Suneel Gupta or your usual RSM contact.