For the past two decades, India has been one of the world’s fastest growing economies. The economic liberalization that started in 1991 charted a transformative course for the country, converting it from a low-consumption agriculture-dependent economy to one of the world’s largest marketplaces.
Along this journey, the country has seen two major global economic crises, a succession of coalition governments, an IT and outsourcing revolution and further fragmentation of its political landscape. But throughout this period, India has remained open for business and has offered opportunities to global companies that have bet on its growth story.
India has several strengths: favorable demographics, high levels of tertiary education, rising per capita incomes, English proficiency and a flourishing democracy.
At the same time there are also challenges: integration with the global economy has made India more susceptible to systemic financial shocks, its government needs to deliver equitable growth for its vast population while keeping inflation under control, it needs effective measures to manage corruption and put in place policies to protect local business while attracting overseas capital.
All these factors make India an exciting and challenging place to do business. For global companies coming into India, the learning curve can be very steep and mistakes made along the way can be costly.