India is a hugely attractive place to do cross-border business for many reasons, from being a major economic player to housing hundreds of fast-growing industries. Many companies flock to India to hire talent, outsource services, conduct trade, and start new businesses.
India’s economy is the sixth largest in the world. As a developing economy, new opportunities and untapped markets are constantly emerging in India. The country has a thriving technology sector and business services industry. Many foreign companies take advantage of this by outsourcing tech and business services to the country. Other vital sectors in India include pharmaceuticals, chemicals, fast-moving consumer goods (FMCG), and automobiles.
With a huge English-speaking population, and the low salaries and operational cost of doing business—relative to the cultural West—India is an undeniably attractive candidate for hiring employees and doing business.
Second only to China, India has one of the largest populations in the world. This is beneficial for doing business in the country due to the:
India has over 1.3 billion people and a working population of 507 million. The sheer number of people across such a diverse economy makes it a prime market for foreign businesses to access.
The biggest sectors by number of workers in India are agriculture, non-financial services, real estate, manufacturing, public administration services, and financial services. The tech sector is huge and set to reach $500 billion by 2030.
India’s workforce is also considered to be one of the most entrepreneurial around the globe, acting as a key driver behind its economic growth. Therefore, businesses wanting to grow by hiring in India may benefit from tapping into India’s innovative energy.
Expanding into India or accessing the local talent pool has relatively low costs compared to many other economies. Foreign companies can benefit from the following:
India’s operations, infrastructure, bills, and services are all very economical relative to most Western countries. Essential services, including internet, phone contracts, water, and electricity, can be secured at a fraction of the cost they would incur in western nations.
Labor costs in India are also comparatively much lower than western wages. There is no national minimum wage, although there are some state and specific industry regulations. Average wages are INR 14,000 to INR 31,900 per month (approx. $170 to $387). Reduced labor costs allow businesses to minimize their hiring and team costs, using their capital to grow in other areas.
However, companies must still consider the relevant benefits and contributions. There are statutory benefits India, as well as additional benefits employers may choose to provide to attract key talent.
India has a large, dynamic trade marketing, including:
India’s top three trading partners are the U.S., China, and the EU. These count for 11.6%, 11.4%, and 10.8% of India’s total trade, respectively. The EU is also a leading foreign investor within the country. With GDP growth predicted at 5.9% by the IMF, India's fast-growing economy is an attractive choice for trade and investment.
India has an extensive network of institutions that meet international standards. These are mostly supported by trade agreements. In addition to the U.S., China, and the EU, India has agreements with Australia, Japan, South Asia, Singapore, Malaysia, Thailand, the UK, New Zealand, and more.
The government has also made a concerted effort to facilitate and encourage international trade. Laws introduced in the New Foreign Trade Policy 2021 enable more straightforward foreign trade, particularly through digitizing many processes.
India has one of the largest English-speaking populations of any nation. This massively boosts the ease of doing international business, particularly for the U.S. and other English-speaking countries.
While recent numbers are only estimates based on India’s last census, English is the second most widely spoken language in India after Hindi. Some 130 million residents speak English. However, not everyone included speaks with the same proficiency. While 256,000 people surveyed spoke it natively, 83 million reported speaking it as a second language, and 46 million people as a third language.
High levels of English allow more foreign companies to conduct business in the country with ease. Companies that already operate in English, for example, would not need to translate contracts, employ additional staff members for local communications, or deal with communication errors.
The Indian government has introduced various initiatives to encourage international business and trade. These initiatives include encouraging international business and entrepreneurship and offering multiple benefits to companies and startups, to name just a few.
Initiatives like Startup India allow companies that fulfill certain criteria to be recognized as startups by the Department for Promotion of Industry and Internal Trade (DPIIT). Startups can access a range of tax and compliance benefits and access funding and mentoring.
Startup India supports businesses through:
India offers incredible expansion opportunities, but it’s essential that businesses of all sizes and sectors have a firm understanding of the market before building their team in-country. Global Expansion’s Employer of Record (EOR) services simplify each aspect of hiring in India, including onboarding, payroll, and ongoing HR tasks—each of which you can manage with our award-winning software.
But Global Expansion is more than an EOR software company: we’re the global employment extension of your team, providing expert advice at each leg of your journey.
Contact us today to discover how simple it can be to build your team in India.