India has a large educated, English-speaking population. This constitutes a competitive advantage vis-à-vis other emerging markets. This advantage has for instance been utilized to export IT services to the benefit of the Indian economy. Consequently, India is often referred to as “the world’s back office”.
India was not hit as hard by the global financial crisis as other countries mainly due to strong domestic demand. However, over the past couple of years India has been adversely affected by the declining demand on the world market, and the Euro crisis, which has resulted in declining growth rates. Moreover, India faces numerous structural challenges, such as immense poverty, inadequate infrastructure, and increasing urbanization. Thus, ensuring future growth depends on the continuous implementation of reforms in the financial and infrastructure sectors, as well as further liberalizations of the trade and investment regime.
An investment in India should not be considered as short-term. It is difficult and resource intensive and it requires a robust and a long-term strategy to engage in this market. This is especially true for small- and medium-sized Danish enterprises. It is therefore necessary to consider and prepare thoroughly to find the right niches and business models, that work in these challenges but highly dynamic market.