India Market Entry Strategy
Any organization can move forward with small incremental changes but building for the future in today’s rapidly evolving environment means taking bold chances and making insightful decisions. Indian economy finally offers one such lucrative opportunity to global businesses, investors, entrepreneurs and growth enablers.
At 9% annual GDP growth forecasted until year 2035, India is one of the fastest growing economies in the world. Stronger economy, business friendly tax and legal reforms, increased domestic consumer spending and massive digitization initiatives are contributing to the future growth.
India Entry Strategy
Research
End to end business and market research including govt policies, incentives, company tax & ownership structure
Strategy
Business & Operational strategies including capital investment & financial projections
Implementation
Joint Ventures, Alliances or manufacturing plants along with business registration, facilities and leadership teams
INDIA MARKET ENTRY
A $3 Trillion economy that is rapidly rising thanks to slew of economic reforms and ease of doing business in last 3-4 years, India is home to nearly 1.37 Billion people with world’s largest democracy. Middle class population is booming with a surge in spending power due to rising incomes which is contributing to an accelerated economic growth with FMCG, Consumer Lifestyle, FinTech, Healthcare, Renewable Energy, EdTech and E-commerce sectors growing at a rapid pace.
By allowing 100% Foreign Direct Investment (FDI) across major sectors, India has significantly opened its doors to foreign markets allowing for international businesses to succeed in India. Corporate Tax cuts announced in September 2019 now helps India fiercely compete with other Asian economies. To further make it a business friendly destination, government has tremendously eased the timelines of getting regulatory permits by making it quick as well as relatively easy to obtain them.
Fluent English speaking population, excellent education standards and globally experienced talent pool provides competing workforce that continues to encourage reputed MNCs in building a successful organization in India. Recent government push towards manufacturing through Invest in India campaign, dictates use of renewable energy sources like solar, wind, biomass, biofuels, bioplastics and electric vehicles which creating new market opportunities that are set to permanently integrate into the Indian economy.
Digital transformation initiatives by government of India across the country inclusive of rural towns and villages, is leading to an e-commerce, fintech, edtech and technology boom that offers exciting opportunities and sets India up for coming decade of an economic growth engine.
Indian Economy Statistics in 2023
GDP Growth
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8% Annual GDP growth since 2010
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9% Annual GDP growth expected from 2023 to 2035
Demographics
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Highly educated, fluent English speaking and youngest population
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50% population below the age of 25, 65% population below the age of 35.
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650 million active internet users in 2023, projected to touch 800 million internet users by 2025.
Startup
Ecosystem
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Third largest startup ecosystem in world after US & China
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14,000 startups founded in 2022
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3000+ AI, Big Data, Blockchain, AR/VR, Web 3, IoT & Robotics startups raising more than $4 billion in VC investments.
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84 Unicorns (startups with more than $1 billion valuation) in 2022.
Rising Sectors & Incomes
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Data Analytics, Artificial Intelligence (AI), Internet of things (IoT) gaining quick adoption.
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Enterprise software, FinTech & Health Care comprise 50% of the startups.
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400% increase in consumer spending expected by 2030 thanks to rising middle class and higher incomes.
Top Business Opportunities in India
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With a strong focus on Technology Advancements, Infrastructure upgrades, Rapid Urbanization, & rising incomes, Government has set a $5 trillion economy goal by 2026 from current $3 Trillion
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Government has now allowed 100% Foreign Direct Investments (FDI) in Retail Industry, currently a $900 Billion market, growing at approx. 18% CAGR for last 2-3 years and is expected to continue this unprecedented momentum till 2024 and beyond.
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Under the “ Make in India” campaign, government is aggressively pushing for India as next generation manufacturing hub providing single stop and easy business licenses, expedited special legal counsel for disputes and resolutions, monetary incentives, rebates and tax benefits to all foreign entities wanting to establish a presence in India
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To meet rising energy demand and curb pollution levels, India has set a target of meeting 40% of its energy demand through renewable energy sources like solar, wind, geothermal, waste to energy/biomass & biofuels by the year 2030
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To increase its manufacturing sector base, country offers tax free opportunities in Special Economic Zones in India (SEZ) to promote export entirely to other nations
Barriers to market entry in India
Doing business in India clearly presents a long term opportunity but we are cognizant of the market entry hurdles which may be a cause of concern for foreign companies or investment firms. At Arete Ventures, we have negated these hurdles with well executed risk mitigation plan for our reputed USA & European clients by developing a prudent India market entry strategy with quantifiable results. Our accumulated knowledge and proven experience across all sectors helps foreign investors leverage as well as optimize business entry strategies for robust growth in Indian markets.
Whether you are looking to sell or manufacture a product in India, our practical experience and business network will not only answer your key objectives but also quickly create the right investment or expansion strategy. Whether it is buying the right company at fair price, creating a joint venture (JV), finding distribution agents, or registering a private limited company in India, Arete Ventures helped numerous foreign firms succeed in Indian market with our proven strategic consulting expertise. We work alongside with you always until objectives are fully met.
Our proprietary market insights and consulting practices have benefitted startup entrepreneurs, small and medium scale (SME) businesses from Europe & North America. Our track record of implementing the strategic business models has been a runaway success for global businesses that have worked with us in the past.
Entry modes of FDI in India
Since opening the doors to foreign countries and international markets in 1991 through economic liberalization, Indian economy has come a long way in improving the investment climate. FDI being a non-debt financial resource has served well in India’s economic development of India and at the same time, it helped foreign companies take advantage of lower wages in domestic markets, income tax benefits, quick licenses and approvals etc.
Post Covid 19 pandemic, India registered the highest FDI inflows of $84 billion in 2022 which is one of the historic highs and increased by nearly 10% compared to 2021. Computer Software & Hardware received nearly $21 billion followed by telecom, construction, automotive, chemicals, pharma/life sciences and others. Singapore was the top FDI investor ($15.7 Billion) in local markets followed by United States ($12.8 Billion), UAE ($4 Billion), Mauritius ($3.5 Billion) and UK, Netherlands, Cayman Islands all investing about $2 billion each.
To make FDI in Indian economy attractive, government introduced 3 entry modes of FDI in India namely Automatic route , Government Route & a combination of both. This allows international companies enter new market in India by operating either as a foreign company (Liaison, Branch or Project Office) or as an Indian company ( Joint ventures with Indian partner or wholly owned subsidiary).
Our Approach
Arete Ventures serves as a one stop solution for all your requirements of doing business and delivering turnkey projects in India. This can include services like new business registration, office set up, hiring, business development, finding an Indian partner for JV, contract manufacturing or distributorship, government permits & licenses, regulatory compliance and other aspects. From being a joint venture consultant in India to setting up teams, regulatory compliances & licenses, we help our client focus on growing the business rapidly in their target markets without worrying about local administration challenges.
Due Diligence/ Market Research
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Analyzing current & future outlook of the market sector
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Competition Analysis
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Pricing Strategy & Product Positioning
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Spotting Positive Divergences (if any) / Demand & Supply Gap Analysis
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Picking right location
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Government Policies, Incentives & Regulations that may impact or benefit that particular sector
Developing a market entry strategy for India
With a client centric approach, Arete’s strategy consulting experts develop a business model incorporating proprietary as well as actionable data insights. We help our clients enter the Indian market through our comprehensive market entry strategies. These include market research, investment thesis, curated insights, expectations of an Indian customer and target market opportunities. Thus, providing a clear financial strategy with higher return on investment (ROI) for their products or services.
Implementation & Strategy Execution
One of our strongest forte, Arete consulting teams stand alongside our clients in executing the India business strategy throughout the course of turnkey projects. Our hands on operational experience has helped reputed international businesses succeed exceedingly well in the Indian markets. Our strategy execution teams help concentrate client’s focus entirely on business growth while we take full care of the local work including recruiting teams, setting up offices, accounting, tax and payroll services, licenses/ permits, facilitating meetings, evaluating partners and representing our clients locally.
India Market Entry Services
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Comprehensive Market Research & Due Diligence
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Financial, Business and Economic Analysis of sector
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Government Policies, Regulations & Incentives