These three areas offer European companies interesting opportunities
The Indian lockdown at the beginning of the corona crisis pandemic made operating business in the country more difficult for a few weeks. Work from home started, a halt was put to import and export chains. Production lines were temporarily shut down. At the same time, emerging new habits offer interesting opportunities for companies in the long run. Shashank Verma, Head of Sales Order Management at Maier+Vidorno, reveals which sectors you should keep a close eye on.
From cash to online payments: E-commerce is booming
According to Verma, India faced major challenges when the Modi government announced a lockdown because of the corona crisis in mid-March, 2020. “Indian working sealed off overnight and you couldn’t leave your house. Everything, even food, was delivered. As a result, online shopping in India is a common thing. We even see an increase in online car sales. Normally we like to go to big shopping malls here in India, but now everyone is trying to stay away from large crowds as much as possible. Online shopping is an efficient and safe solution even after the population is vaccinated.”
Although it is perfectly normal in India to pay for an online product at the door, the major online platforms such as Amazon India, BigBasket, Flipkart, and Zomato encourage their customers to use online payment options such as e-wallets, credit cards, debit cards, online banking, etc. Because of the curfew, it got very difficult to get to the ATMs and withdraw cash. In this situation, online or e-payments is the default choice. According to Verma, this is very important development for companies planning to tap into the Indian e-commerce market.
India will knock China off the throne: India on track to become the world’s largest manufacturing site
Until the outbreak of the COVID-19 virus, entrepreneurs immediately thought of China for outsourcing their production. Fokker Elmo build a new factory in India, not a second factory in China. The company is now benefiting from this decision in the corona crisis. Verma sees that the Indian government also wants to seize this opportunity. “One of the big challenges, if you want to produce in India, is to buy industrialized land. States have to search for land that is available for this purpose. They did so successfully. A total of twice the size of Luxembourg is now available for producers planning to move from China to India or to open a second production facility.”
“India also wants to make itself more prominent as an export era,” says Verma. “We will therefore see that the easy rules are for companies that produce in India but do not go to the Indian market with their products. An example of this is General Motors. They are not selling in India since 2017, but continue to produce for export.” The new Indian PLI (Production Linked Incentive) funding further supports this goal. This regulation allows manufacturers of smartphones, for example, to move their production very advantageously to India. “Apple is coming to India and as we know, Samsung has the largest mobile phone factory in the world in Noida. Our government wants to build on this success, so I expect incentives for other industries as well.”
India seeks technological solutions that limit human contact
According to Verma, the self-service options increased because of the outbreak of the corona crisis in India. “International companies that have this type of technological solution should definitely consider the Indian market as a market. Ideally, these solutions should reduce the need for human contact for simple everyday tasks, such as washing the car or paying at a self-service checkout. Due to the current situation, there is a great interest in solutions for independent and remote execution. This applies not only to the consumer sector but also to distribution, agriculture and the medical sector.”
In addition, Verma expects India to offer more to international companies in the field of highly skilled workers. “Normally we see a lot of young, intelligent, and technically trained Indians moving abroad to train or find a job. Because of the corona crisis, however, this is impossible at the moment. India therefore currently has less talent migration. This highly educated group of young people wants to start their careers in an international organization or can introduce their new start-up ventures. This creates jobs within India and promotes economic growth. This creates a win-win situation for international companies looking for motivated and ambitious talent.”
“Be vocal about local”
To get the country out of the corona crisis, there is a support plan from the Indian government that relies very much on isolation. Prime Minister Modi encouraged his people to buy Indian products as much as possible: “be vocal about local.” “However, international companies should not worry about their position in the country. India wants to attract more foreign investment,” says Verma. “Normally, India imports billions of products from China. The outbreak of the virus is now pushing us to be less dependent on imports. The statement “vocal for local” is therefore not intended to prevent foreign companies from coming to India. Instead, encourage Indians to produce more products in their own country. At the same time, we see the arrival of foreign companies as a great opportunity for our country.”