India Is Opening Up For Business: Martin Sorrell In India’s BQ
This is a series of articles by leaders on how India can raise its Business Quotient.
As India celebrates its 70th year of independence, it is clear that the country has progressed well beyond its early days of ‘do or die’. It’s now sitting on a goldmine of economic potential.
When the term BRIC was coined by Jim O’Neill in 2001, it positioned Brazil, Russia, India and China as economic powers soon to rival those of the G7 nations. Sixteen years later, the pace of the other BRIC nations has somewhat stalled and only India has maintained its momentum. Recent OECD forecasts predicted India to be the fastest growing economy within the G20 and the IMF has predicted a gross domestic product growth of 7.2 percent for this year alone.
India still has huge untapped potential – a fact of which Prime Minister Modi and his government are well aware.
In the face of increasing protectionism globally, projecting a positive national brand, always important, has become even more so. The Prime Minister, personally, has been showing the way. The country needs to build a consistent brand image of a nation that is open and eager for business – as evidenced by everything from policy changes to investment in infrastructure and digital accessibility. In Mahatma Gandhi’s words, “action expresses priorities.”
On his visit to the United Kingdom earlier this year, Finance Minister Arun Jaitley declared that India is now one of the most “open economies in the world” and emphasised the country’s core determination: to create jobs by attracting foreign investment and so establish India as a major manufacturing hub.
For this message to be at its most powerful, every one of India’s 29 states must take it on, with the first-mover states standing to gain the most. The message must be highly vocal, consistent in tone and extremely visible: a state open for tourism; a state open for investment; a state that provides support for entrepreneurs; a nation that offers a warm and welcome helping hand to potential partners in every sector.
Today, successful deal-making demands far more than a few signatures on monetary agreements.
You need to listen to your partners, have real empathy with their aims and help them deliver not only financially but culturally. Only then will new relationships flourish and prove themselves sustainable.
For all these reasons, ‘Make in India’ is to be roundly applauded: a concerted push to attract higher foreign direct investment and also to boost the productivity of local manufacturers.
Every sign and every signal must let the world see that India is not only open for business but is easier than ever to do business with.
Another laudable ambition is to boost the productivity of local manufacturers. BrandZ is WPP’s global brand valuation report and its India edition, which ranks the 50 most valuable Indian brands, will be released next month. One of its key metrics is Brand Power, which measures consumers’ propensity towards a certain brand. The report will examine how Indian brands perform in the market, the factors influencing brand choices, and the spending habits of rural and urban consumers.
Foreign players have built their presence by investing heavily in brand and distribution. Not all local businesses have been as active. Domestic consumers are still highly dependent on neighbouring imports. Looking ahead, Indian manufacturers may have to redress this imbalance: it could make a critical difference, not only to their own share of the market but, importantly, to existing trade deficits.
On the investment front, India’s attempts to draw greater foreign direct investment is also to be commended. Despite the government’s work thus far, India’s private investment climate remains weak: India’s ranking in the World Bank’s ‘Ease of Doing Business’ report improved by only one position, from 131 to 130 last year. Reforms to create a more business-friendly regulatory environment will certainly help.
Finally, going digital. This ambitious plan for India’s future will create tremendous opportunities and affect all levels of the economy. Digital India, when fully implemented, will allow access to health, education, and banking in the most rural parts of the country.
OECD data shows that some 30 percent of young Indians are NEETs – not in education, employment or training.
India has the task of creating 80 million new jobs within the next decade to fill that gap.
Digital empowerment can lead to financial empowerment for more of the population – through job creation in the areas of technology, telecoms, e-commerce and others. Government data shows that the e-commerce market will grow 19 percent to an estimated $33 billion in 2017.
An HSBC study predicts that e-commerce has the potential to create 12 million new jobs over a decade by tapping opportunities in logistics, customer care, IT and management.
What could hinder India’s progress? Perhaps more than anything, a failure to communicate, enthuse and inspire at all social levels. Yes, the big picture and the grand digital vision are important and inspiring rhetoric has its value. But it will be critical that they are understood and embraced by those grappling as they are with the realities of life; by those not yet able to afford a smartphone.
India must buy into its future from the bottom up.
Sir Martin Sorrell is founder and chief executive officer of WPP.
The views expressed here are those of the author’s and do not necessarily represent the views of BloombergQuint or its editorial team.
