India is projected to experience by 2024 a growth of 6.5% of GDP, making it the top indicator of global economic progress.
Big companies like Apple, Foxconn, Parimatch and Tesla are eager to invest in this country. Parimatch and other companies are optimistic about the Indian economy, but Indian business has problems that need to be addressed.
What factors entice companies to invest in India?
India surpasses China as the most populous country in the world, with a population of more than 1.42800 million. This number slightly exceeds China’s population of 1.425 billion. In addition, half of India’s population is made up of individuals of working age under the age of 30, who are more willing to work at low wages than those in the United States and Europe. India’s economic growth rate, which has been around 7% in recent years, is well above the global average of 3.2%. According to the World Bank, India’s GDP has experienced its highest growth since 2014, increasing by 83% compared to the economies of developed countries.
But it is not only this factor that entices prominent brands to establish a presence in India. After the deterioration of U.S. relations with China and Russia, a conflict in Ukraine in 2022, and international sanctions on the economy, wealthy investors recognized India as a reliable investment destination.
In addition, it was announced that in 2024, Prime Minister Narendra Modi will serve his 3rd term as he secured a majority of seats in Parliament based on the election results. Modi’s government has actively encouraged multinational companies to set up manufacturing facilities in the country, allocating billions to strengthening infrastructure such as roads, ports, airports and railways. Modi has promised to achieve a tenfold increase in India’s economy by 100th anniversary of India’s independence by 2047. This ambitious goal is an incentive for companies such as Parimatch.
Tim Cook, Apple’s CEO, expressed his enthusiasm for the Indian market and cited the company’s 2-digit phenomenal growth. In an interview with the Economic Times of India, he called it “an incredibly exciting market.” Parimatch also sees an attractive Indian market for potential investments worth millions.
In 2023/11, Foxconn Technology, a supplier of Apple (AAPL), announced plans to invest more than $11.5 billion in expanding its business in India. According to CNBC, the Taiwanese company submitted a formal application to Taiwan and said the funds would be utilized for construction projects to meet its operational requirements. The investment will be made by Hon Hai Technology India Mega Development, a 100%-owned subsidiary of the company.
Foxconn already owns a key manufacturing facility in Tamil Nadu, India, and previously disclosed multi-million dollar ventures in Karnataka and Terangana.
Ahead of the Indian election, Prime Minister Modi visited the United States in 2023/7. During his visit, he met with Tesla CEO Elon Musk. According to CNBC, Prime Minister Modi expressed great enthusiasm for India’s future and said it was more likely than any other major country in the world. In a video interview on Prime Minister Narendra Modi’s official YouTube page, Musk publicly acknowledged his admiration for Modi. He praised Modi’s dedication to India and his willingness to accept new companies while ensuring that they contribute to the progress of the country. This conversation took place in New York.
Unfortunately, until now, both Tesla and bookmaker Parimatch have not been able to invest in the country. Nevertheless, India seems to have a big promise compared to China and other countries. “Following China, India is the only economy that can achieve economies of scale because of its vast market,” Nomura economists say in an India report. “India is one of the few countries that has attracted investor interest in different sectors,” they further stressed.
Problems for investors
Meanwhile, the New York Times highlights a trend of concern amid global investor enthusiasm for India. Despite the interest, Indian companies are not consistent with the pace of investment. Delays in investment in key aspects such as new machinery and infrastructure are causing a decline in its contribution to the Indian economy. While there is an inflow of funds into the Indian stock market, long-term foreign investment, as supported by statistical data, is declining. In 2023, despite India’s economic success, foreign investment in the country fell by 29%. Looking ahead to 2024, the New York Times predicts that foreign investment will not exceed $120 billion. That’s down significantly from the figures of previous 12 years when investment peaked at $550 billion in 2021.
According to Taxguru, the responsibility of Modi’s government course on import substitution lies in higher taxes imposed on non-resident companies compared to Indian companies. This government policy is designed to boost exports, not imports, and promote domestic business. Experts in the publication argue that such measures are aimed at promoting the growth of the domestic industry.
This poses more challenges for companies like Parimatch, which believe in the prospects of the Indian economy. Therefore, Parimatch continues to seek ways to overcome these challenges and strive to contribute to the development of the market.
Problems of the bookmaker in India
Parimatch, a well-known betting company, is ready to invest heavily in the Indian economy. However, Parimatch had faced significant challenges due to the deteriorating business environment in India even before it began operating in the market. Specifically, the company faces the problem of brand counterfeiting. The entities responsible for this illegal action continue to operate in the Indian market and are causing damage to reputation for the international operator.
As a result, Parimatch’s business expansion plans have become more complex. The company is part of an international holding that engages in betting activities and organizes gambling in many countries around the world. Parimatch firmly believes that the current business conditions in India have not yet promoted the growth of foreign companies. According to Parimatch, this situation significantly hinders business operations in the country and discourages foreign investment.
India’s economy will grow
India’s economic growth is expected to continue, but an annual growth rate of just 6% is not enough to satisfy India’s aspirations. Consistent GDP growth of 8-9% per year is essential to achieve the government’s goal of surpassing China, gaining the status of an advanced country by 2047 and becoming the world’s third largest economy after the United States and China. Parimatch is ready to help Indians to achieve this dynamic growth through good investment conditions.