India, is the land of more than 1.4 bn people. It is indeed the most populous democracy. About 47% of this number is under the age of 25 years. Imagine being blessed with that kind of working population. It is an asset. As a country, it is a big market, but with that kind of young population, it is also a hot pot of budding entrepreneurs and a promising workforce. Now add to this pot, a mix of unbridled optimism, catalysed by soaring infrastructure.
It is time to spread the wings and fly.
Today we are the world’s fifth largest economy at 3.7 trillion $ on route to becoming third-largest by 2027 with a projected growth rate of 7% YoY. That is, we will add upwards of 259 billion $ to our economy next year. To put that figure into perspective, of the 187 countries in the world, 136 do not have a GDP of the size that we will add to our economy in a year!
The past decade, with its ups and downs, has shown us first-hand the dynamic nature of the Indian business environment. And yet, in our own pursuit of expansion and growth, we encounter a plethora of challenges that are uniquely Indian in nature.
Take the cultural kaleidoscope of our country, for instance. Across its myriad regions, languages, customs, traditions there is a unique challenge to the corporate world. It necessitates tailored corporate strategies, the effects of which trickle down to the bottom line. FMCG companies, for example, have benefited immensely by tailoring their product offering, packaging, marketing and all as per the local needs. Localization efforts, such as adapting product bundles and marketing strategies to suit regional preferences, can significantly enhance market penetration. Similarly, from IT industry perspective there are LLMs and SLMs being used extensively in GenAI/ML context to bring local flavour to technology offerings.
Next, the regulatory environment in India is a complex maze posing significant hurdles to business expansion. Remaining compliant involves ongoing attention to detail and flexibility when it comes to foreign investment legislation and tax laws. To reduce regulatory risks, working with local legal experts and putting in place strong compliance structures are crucial. Indian economy is also “known” for its bureaucratic hurdles and red tapism. Even though the recent years, blessed by digitization, make-in-India, PLI scheme for manufacturing, have sped up and streamlined processes, there are areas like farm and labour that need a policy overhaul. Corporates, need to proactively embrace these welcome changes and stay on top of further enhancements in the regulatory environment.
Infrastructural deficiencies present another set of challenges that businesses operating in India must contend with. Despite the significant strides in recent years, inadequate physical and digital infrastructure remains a bottleneck for growth in sectors that are heavily dependent on warehousing and goods movement to markets across the country. We need more roads, more railroads, more trains, more ports and airports in the country, and more infrastructure in tier 2 and 3 cities.
Business strategies and policies are also directly dependent on the greater regulatory and politico-economic environment of the country that the organisations do business in. Tax structures, trade policies, inflation, banking regulations are to name a few important areas that would have direct effects on one’s business policies. It is of utmost importance, that you stay abreast of any changes in the regulatory, politico-economic environment. Reaching out to experts who can anticipate such changes, help businesses prepare for them and recalibrate business strategy and policies, can help businesses navigate such a dynamic situation successfully.
Making your way through these unique challenges of India’s business landscape demands a blend of operational agility, cultural sensitivity, and strategic insight. A lot has been achieved, and a lot can still be done.
As Robert Frost wrote,
The woods are lovely, dark and deep,
But I have promises to keep,
And miles to go before I sleep,
And miles to go before I sleep.
Written By:-
Vinod Pahlawat, Chief Growth Officer at CMS IT Services.
