Why India Can Be a Great Option for Your Business Expansion in 2022 and beyond


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You might already have a plan for business expansion into India, but if not, you may want to take a glance at the opportunities the country has to offer.  

India is one of the fastest-growing major economies in the world. Besides, as the second-most populous country, India is home to millions of talented individuals that can help you grow your business. 

However, complicated labor laws, cultural diversity, foreign investment laws, and price-sensitive customers prove a hindrance for companies looking for business expansion in India. However, the good side of the coin is you can overcome these challenges with the right strategies. 

This article will give you a glimpse of the roadmap for successful business expansion in India. We will also talk about what makes India one of the best countries to expand your business in.

Why Should India Be Your First Choice for Business Expansion?

India is leading the bounce back from the pandemic with a 12.7% GDP growth in the third quarter of 2021. The future also looks promising. The Reserve Bank of India has projected the economic growth rate for 2022-23 at 7.8%. 

The growth is driven mainly by government capital spending. Besides, India has attracted the highest ever foreign direct investment (FDI) inflow of $81.72 billion during FY 2020-21.

Besides, India is continuously improving the ease of doing business, giving private and foreign companies a positive edge. In fact, in sectors like agriculture & animal husbandry, auto-components, automobiles & biotechnology, 100% FDI investment is allowed. In addition, in industries like insurance, petroleum refining (by PSUs), and power exchanges, up to 49%, FDI is permitted. 

Here are some more reasons to consider India for business expansion:

No Language Barrier

English is used extensively in the Indian corporate world. In fact, most companies in India consider English and communication skills as necessary when hiring employees. 

Large Pool of Skilled Workers

It’s no secret that India has a large pool of skilled workers. No matter the industry you’re in or how experienced people you need, you can find them easily in India. You can also consider partnering with third-party recruiters to make it easier for you to fill necessary positions. 

Low Cost of Labor

Since the average cost of living in India is lower than that of developer countries like the USA, UK, and Canada, labor cost is also less. It is also worth mentioning that wages in tier two and tier three cities in India are lower than tier one.

Ease of Doing Business

As mentioned above, India has significantly improved its business policies, making it easier for companies to do business. 

The World Bank has discontinued its “Ease of Doing Business” report that ranks countries against each other based on the regulatory environment and other factors that affect a business through its life cycle. However, according to the last report published in 2019, India is ranked 63 in ease of doing business, compared to 77 in 2018 and 100 in 2017. 

The significant improvement is due to the government implementing new reforms across parameters, such as dealing with construction permits, starting a business, trading across borders, and resolving insolvency. 

Increased Internet Penetration

In 2021, India had over 845.68 million internet users. The figure is projected to increase to 1.18 billion by 2026. 

The increased internet penetration enables businesses to reach and sell their products online to Indian customers. In fact, the Indian eCommerce market is poised to reach $111.4 billion by 2025, up from $46.2 billion in 2020. The number is further expected to reach $350 billion. 

Strong and Diversified Infrastructure and Logistics Base

In the last few years, India has established a robust base for manufacturing a wide range of goods to meet the requirements of various industries. For instance, India manufactures most of its products for heavy electrical, power generation and transmission, automobiles, ships, mining, and crude oil refining. 

Besides, amidst the global shortage of semiconductors, the government of India announced a $10 billion incentive plan to encourage the manufacturing of semiconductors in the country. 

Looking someone For Your Business Expansion?

How to Get Started With Business Expansion in India in 2022?

There are two ways to enter the Indian market. 

  • First, incorporate your company in India. 
  • Second, partner with an Indian company. 

That said, here are the steps to expand your business in India.

Partner With an Indian Company

As mentioned above, Indian laws are complicated and ever-changing. Partnering with a local company can go a long way in successfully navigating the complexities of the new business environment. 

For instance, a PEO organization can provide you the much-needed assistance in hiring Indian employees. Your PEO partner will take care of all your HR-related tasks, including payroll, benefits management, and compliance. If required, they can also give you valuable insights into the Indian market, competition, regulations, and other important issues. 

Source Your Products Locally

Unless you use exclusive raw materials, sourcing your products locally would be the best choice. In India, most businesses can find the necessary products required for manufacturing. 

Apart from cost savings, sourcing your products locally will help you cater to your customers’ expectations in India. Since it is a vast country with many different cultures, religions, and languages, localisation will help you meet customer needs and preferences. 

Even global fast food joint, McDonald’s sources more than 96% of its products and supplies locally because half of the Indians are vegetarian. 

Price Your Products Right

India is a very price-sensitive country. Even Netflix recently reduced its prices to attract more Indian customers. However, this doesn’t mean you should price your products so low that it affects your margins. All you have to do is make sure that your prices are competitive. It will, in fact, take a lot of planning and optimization to find the right pricing for the Indian market. 

Plan for Long Term

As with any other new market, the Indian market is not easy to breakthrough, at least not in the first few months. This is why you will also find companies compromising on short-term profitability to establish themselves in the country. 

And since India offers such tremendous opportunities, there is no dearth of competition. 

Therefore, it is essential to plan for long-term growth rather than making money from the first day.   

Summing Up

By expanding your business to India, you can take advantage of the huge market and attract thousands of customers (if not tens of thousands). Besides, the large pool of skilled workers in the country will help you find the right people for your business. 

If you’re still not sure if India is the right market for your business expansion, let us know your concerns in the comments, and we will address them ASAP!

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