Population (2017): 1.3 billion
GDP: US$2.26 trillion
World Bank “Ease of Doing Business” Rank (2018): 100th
Bilateral Trade with Singapore: S$25 billion
Trading Partner Rank (2017): Singapore's 10th largest trading partner and 10th largest export destination
India’s population of 1.3 billion and growing economy present attractive business opportunities for you.
India’s economy is huge and growing fast. It is the world's seventh largest economy in terms of Gross Domestic Product (GDP) and the world’s fastest growing major economy, surpassing China, in 2015 and 2018.
Going forward, India’s GDP growth is projected to remain robust with an average growth rate of 7.3% from 2016-2020. An increase in private investment, the push for infrastructure growth, and an investment-friendly climate are expected to fuel this growth.
Rising incomes and a swelling middle class will also result in a big shift in consumer spending and consumption patterns, presenting significant opportunities for your business.
However, doing business in India can still be challenging. This is due to the lack of good infrastructure and connectivity. Moreover, the 29 states in India have different languages and customs. The country is not one market but interconnected regional markets with different business practices across the states.
Things will change as India transforms its economy and becomes more investor-friendly. India’s National Democratic Alliance government under Prime Minister Narendra Modi has launched major reforms since coming to power in 2014. Policies such as Make in India, Digital India and the Smart Cities Mission make it easier for Singapore companies to do business there.
In addition, the government’s business-friendly reforms have paved the way with a harmonised Goods and Services Tax regime for a unified market, cutting of red tape, and easier access to credit.
As a result of these initiatives, India has made a leap in the World Bank’s Ease of Doing Business Ranking, moving from 130th out of 189 economies in 2016 to 100th position in 2017.
Rising incomes and a swelling middle class in India will result in a big shift in consumer spending and consumption patterns, presenting significant opportunities for your business.
For example, more people in India are now using affordable smart mobile devices. This has in turn led to the growth of e-commerce, completely transforming the retail landscape in India. Revenue from e-commerce is likely to exceed US$100 billion (S$135 billion) by 2020 and will continue to grow.
Now is the time for you to enter the Indian market, while there is first mover advantage.
Rising affluence and an increasingly digitally-savvy population are driving consumption in India. This opens up opportunities for you to meet the increasing demand of the Indian market.
The middle-income group is projected to make up a sizeable market of US$150 billion (S$203 billion) by 2020. Besides an increase in consumption levels, rapid urbanisation has changed consumer behaviour and spending patterns.
Consumers now have increasingly global preferences, which has led to a greater demand for good quality shopping malls, consumer products and lifestyle services. In particular, the young and more sophisticated Indian consumers are seeking foreign brands and imported consumer goods.
Online retail is expected to be at par with physical stores in the next five years (2019-2023), and Indian e-commerce sales is projected to reach US$120 billion (S$162 billion) by 20201.
Accompanying the e-commerce growth is the rapid adoption of mobile payments. India is poised to become one of the fastest growing markets in the mobile payments space as an estimated 85-95% of all transactions are still conducted in cash.
Learn more about the business landscape in India and the opportunities you can find today.
1 “Indian Retail Industry Report,” IBEF, 2018
The Make in India initiative is viewed as key to India’s economic growth. It seeks to restructure the country’s economy that is traditionally focused on service and agriculture, towards higher value-added production.
The vision of the campaign is to make India a global hub for the manufacturing of goods, and to attract businesses from around the world to invest and manufacture in India. A key focus is on job creation and skill enhancement in 25 sectors of the economy.
Since the launch of the initiative, foreign investment into India has increased. The country has emerged as the top destination globally in 2016-2017 for foreign direct investment (FDI) with US$75 billion (S$101 billion) in FDI, surpassing both USA and China. India’s export of goods and services has also risen steadily to form 25% of Gross Domestic Product (GDP) and 2% of the global GDP.
Make in India, coupled with domestic consumption and demand from global markets, has driven growth in the food processing, automotive and electronics sectors.
India planned to spend 5.97 lakh crore (S$111 billion) in infrastructure projects in 2018-2019. With growing urbanisation, urban cities with a population of more than 4 million will account for nearly 70% of India’s GDP by 2030.
While Tier 1 cities like New Delhi, Mumbai, Chennai and Bangalore are popular for your business as a launching pad into India, Tier 2 and 3 cities offer the advantages of lower costs and access to large markets. The increase in air connectivity has helped investment and human capital to flow more freely to these cities, which are the engine of future growth for India.
India has outlined plans to spend S$40.4 billion in 99 Indian cities under its Smart Cities Mission. This is an urban renewal initiative by India’s government. The spending aims to transform the cities with major development and infrastructure projects.
Government to government collaboration between India and Singapore in Andhra Pradesh and Pune opens doors for your business to explore collaboration and pilot solutions in the areas of urban development, transport and logistics, and manufacturing.
Read what Mr Timothy Sun, Enterprise Singapore Regional Director based in Chennai, India, has to say about opportunities for Singapore companies in India’s smart cities.