BDO LLP | INTERNATIONAL TECH HUB
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Organisational consulting firm Korn Ferry believes India will actually have a talent surplus by 2030 - with 245 million more individuals joining the workforce. In a country with a youthful median age of 31, business in India is well-placed to thrive. THE GOVERNMENT SUPPORT From a fiscal policies perspective, the Indian landscape is quite stable when compared to the larger Asian region. An aligned political ideology helps to welcome larger multinationals and smaller businesses from overseas. The business tax rate is now close to 22% for companies in India – down from a one-time 40% - which, combined with income tax of 20% makes the country a relatively tax-friendly location. Special “economic zones” have also been created to reduce the cost of operation. Since 2015, smaller businesses have had support from the government’s Startup India initiative, which provides access to tax benefits, easier compliance and IPR fast-tracking. THE INVESTOR ANGLE India has a vibrant primary stock market with over 4,000 listed companies, but high capital costs restrict the raising of funds and business listings in the country. Debt capital averages over 9%, whereas in the UK or US loans are available at rates as low as 2%. With equity capital this steep, businesses often try and raise capital from AIM, LSC, NYSC or Singapore instead. The central government and bank is working hard to expand opportunities in this area. THE COMMON MISCONCEPTIONS Far more than a back office support hub with low labour costs, India is changing. The third largest consumption economy, Indians have moved from being savers to consumers, with purchasing power rocketing.
Educated and highly-skilled Indian workforces can now deliver digital services to as high a quality as anywhere in the world. Not only that, but India has one of the cheapest global rates for data – at just 25 cents for 1GB. For an eCommerce company, that’s a lot of money saved. THE ADDITIONAL BENEFITS With an approachable investment climate, clarity on foreign direct investment policies and focus on establishing infrastructure, India has a lot to offer potential investors.
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