3 Reasons Why India Is a Lucrative Market for Business
Tim Cook, CEO of Apple, recently visited India to open Apple’s first store in Mumbai. The reason — India now makes $6M of revenue for Apple phones. Many more foreign companies — Samsung and Foxconn are now considering India for their subsequent investments. In the last five years, India has become a hotspot for investors. The growth trajectory is so remarkable that other global economies are falling short.
When Avnish Bajaj, founder of Matrix India, recently came to my podcast, Figuring Out, we discussed why more businesses are coming to India. Let’s look at the reasons.
1. Economic boom
India is, at present, the fifth largest economy in the world. By 2027–2028 India is expected to ascend the ladder to the number three position. This financial development has been a boon not just for Indians but for foreign investors as well. India is one of the few countries which did not have to bear the brunt of recession in the post-COVID world.
The government has developed Yojanas (schemes) to help push industries and ease the smooth transition of foreign companies extending here, such as — Make In India and Startup Initiatives. Micro and small enterprises have grown to contribute about 45% to the country’s GDP and are indeed the backbone of the economy.
2. Huge human resources
With a population of 1.4M, India is a lucrative market for international companies. More workforce means the smoother running of each sector, ultimately benefiting the company. More than 50% are young, and 65% are below 35. Young people with creative mindsets are ready to take on the world. And foreign investors are tapping into that potential.
In a country where setting up business and startups were considered playing with career, we now have 68 unicorns, as per the most recent survey. This has been made possible by the younger generation, who want to do something for themselves. Gen Z is a generation saving only 17% of their income, unlike their parents, who tried saving 54%. When there’s more spending, more consumerism brings more business to India.
3. Rise of the middle class
India’s middle class in the last few years has grown to be affluent. They do not want to be stuck using essential or cheaper products; they want to and can get their hands on luxury items or more expensive stuff. People from Tier III and Tier IV cities are now moving to Tier II cities in search of better opportunities and a better growth curve. They want what’s best for them. They have changed the definition of middle-class Indians, and they are no longer afraid to take risks and make significant career shifts.
Do you know why this happened? Because of new and exciting job opportunities. It is clear to many people that if they are good at something, they should try making money. Hence, the rise in the number of young content creators and bloggers. Everything has been made a platform for fame and wealth. Young people invest in mutual funds and stocks, which also compound wealth. And that is directly affecting the change in consumerism, making India a lucrative market for investment.
Along with digitalization, the growing infrastructure is also bringing business to India. Moreover, India has good transportation connections both within the country and abroad. Hence, from research and development to export, the path is smooth. All of these have made India a lucrative spot for foreign investors.
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