With its long-standing trade and cultural links with the UK, India offers British business perhaps the best opportunities of all the emerging BRIC nations. These strong ties enable UK companies to take advantage of the many opportunities available.
British trade with India passed the £5 billion mark in 2010. Its economy currently ranks eleventh in the world and the country is one of the G-20 major economies. Growth in 2012 remains at above 7 per cent. However its public debt of 62 per cent of GDP is the highest of all the emerging economies.
Although India has numerous languages and hundreds of dialects, Hindi is the official language, although English remains a common tongue especially in the world of business. It also has a vast population of around 1.2 billion people. Religion remains influential. The majority are Hindus, although Muslims, Buddhists and other faiths make up sizeable minorities in the country.
Despite widespread development India is still largely rural with 70 per cent of people living outside the main 200 towns and cities. Widespread poverty remains.
Although India can be complicated and challenging from a business perspective, after China it’s the world’s second fastest growing world market with a rapidly expanding consumer class and therefore cannot be ignored. A few years ago business was largely confined to Mumbai, Delhi and Bangalore but has now spread further afield to such places as Nagpur, Ahmedabad, Chandigarh, Pune, Jaipur and other locations.
In the decades after independence in 1947 India adopted a strictly Socialist approach to economic development, characterised by wide-scale protectionism, public ownership and heavy regulation on the one hand and massive inefficiency and corruption on the other. This produced an annual “Hindu growth rate” of around three per cent. However, for the past 20 years India has undergone a huge liberalisation process shifting it towards a firmly market-based economy. In that time both growth and international trade have increased spectacularly. In the past ten years alone GDP per head of population in India has trebled.
India is dominated by its massive service economy which accounts for 57 per cent of GDP followed by industry at nearly 29 per cent and agriculture at almost 15 per cent (giving it the second biggest output in the world). Its labour force extends to 500 million people. It is the nineteenth largest exporter in the world and the tenth biggest importer.