Why India Is the Land of Plenty; While Recession Grips the World, One of Its Quickest-Growing Economies Is Still on the Up - and Needs the Legal Services to Back It Up. Baljit Chohan and Shan Hassam Look at Why Birmingham's Law Firms Need to Look to India
Byline: Baljit Chohan ; Shan Hassam
Flight from Birmingham International to Mumbai: pounds 450.00. A meal at your local "darber": pounds 10.00. An economy still growing at seven per cent per annum in the midst of the steepest global economic downturn in a generation: priceless.
Why, in the middle of an economic crisis that has seen LDV crash, are some Midlands businesses casting their eye towards India as the key to survival and growth? Well, because an economy more commonly believed to take jobs out of the Midlands may actually offer Midlands businesses something the UK cannot; a banking system that has escaped the pain of digesting toxic assets, a growing consumer market and a newly-elected government with the money and commitment to invest in infrastructure.
Over the past few months, Wragge & Co has seen the gradual realisation of this opportunity in our client base. We're already advising clients on how to take advantage of the rich rewards that the Indian economy offers.
So which sectors provide fertile grounds for Midland companies? Retail. Why? The growth in India's consumer market (75 per cent in the last four years) and the significant increase in disposable income have meant that India's retail industry now accounts for up to 12 per cent of the country's gross domestic product.
But will it continue to grow? Yes. India's retail sector is expected to rise to pounds 500 billion by 2013 and to pounds 800 billion by 2018.
So what? Well, traditionally we have helped India's economy without looking back (or maybe not even knowing). Ever had a chilled Kingfisher beer? How about a cup of Tetley tea? Ever shopped at Store 21? India's economy can now return the favour.
One of our clients, Marks & Spencer (through arrangements with Reliance Retail), is working on marketing themselves to the very willing and increasingly affluent consumers in India.
Tesco (through similar arrangements with Tata Group) is busily pursuing the same strategy. Clearly, if the UK and US are able to sell Pepsi to India (and get a staggering 30 per cent growth per year) and market Starbucks coffee in the homeland of tea then the opportunities for any business in this sector are indeed limitless.
Infrastructure. Why? India has long suffered from an underdeveloped infrastructure network, be it road, rail, ports or airports.
According to Bundeep Singh Rangar, chairman of IndusView, the outcome of the recent elections will create "more than pounds 426 billion worth of investments to be channelled into India's infrastructure over the next five years".
According to many sources, the Indian government will invest more than pounds 215 billion at a rate of 31 per cent of GDP per year. Australian companies have been quick to seize this opportunity with dozens of companies investing in and gaining tenders for infrastructure projects. …