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India’s Growth and Economic Outlook

India has come a long way in its quest for economic stability and international expansion. These reports detail the chronological development of India’s economy and factors affecting its advancement.

Indian Paths to Global Growth

India now counts among the most active players on the global stage with a number of companies have established global and regional leadership positions in industries ranging from pharmaceuticals, automotive and consumer goods, to telecommunications, infrastructure and resources.

Indian businesses’ traditional strength as low-cost producers has played a major role in their overseas growth. However, as global markets grow more crowded and complex, these enterprises will likely need to rely on more than just their low-cost advantage. They will have to build global brands and provide products and services developed from an in-depth understanding of diverse international consumers.

Innovation will prove critical to these efforts, as will improvements in operational efficiency and the ability to harness the skills of leading international talent.

To help Indian executives plot successful courses to international growth, Accenture conducted a formal research program examining the strategies of companies across Asia.

The research points to six factors that attribute to the success of Advanced globalizers:

  1. Defining a clear path for international expansion

  2. Standing out in crowded markets

  3. Building dynamic global operating models

  4. Attracting and retaining global talent

  5. Reaching across cultural barriers

  6. Creating a globally minded leadership team

DOWNLOAD THE FULL REPORT [PDF, 209 KB]

Key Insights

The opening up of the Indian economy after 1991 and the resulting tighter integration with the global economy have powered Indian companies’ global ambitions. In addition, rapid domestic economic growth has provided a solid foundation for companies seeking to globalise, delivering strong balance sheets and easy access to capital. The need to secure access to raw materials has also been a major driver. As an outgrowth of these efforts, a number of Indian companies have established global and regional leadership positions in industries such as pharmaceuticals, automotive, consumer goods, telecommunications, infrastructure and resources.

Not surprisingly, 92 percent of the Indian companies in our study say they’re strongly committed to international growth, with 47 percent planning to expand aggressively – the highest level of determination among all the national groups we surveyed. Indian companies seem to be following their more mature peers from other Asian countries in continuing to push for overseas expansion.

But a strategy is only as strong as a company’s ability to execute it. Only 38 percent of the Indian businesses in our study believe that they have the right operational capabilities to expand overseas and few Indian enterprises are confident in the ability of their business processes and IT structures to support international expansion.

Recommendations

For Indian companies to achieve their global ambitions, they need to establish clear goals for expansion and articulate what will differentiate them in each international market they target. They will also have to formulate plans for gaining the required insights into customer needs and wants, and then use those insights to develop successful offerings. In addition, many Indian companies will need to review their operating models to ensure that they are scalable and efficient. Perhaps most importantly, they will have to make certain that they have the people, culture and leaders in place to succeed in the international markets they have targeted.

India in 2013: A quick recovery is a must

Stubborn inflation, a restrained credit environment and low business confidence were all factors challenging India’s economy in 2013.

The following are some of the points addressed in the India 2013 report:

Key themes for the year 2013

Fiscal prudence and inflation management are needed to avoid stagflation

Business imperatives

  • Work with suppliers to plug inflationary pressure points along the supply chain.

  • Develop public-private partnership (PPP) models to create profitable business opportunities and to help governments achieve efficiency in their spending.

  • Improve business processes to cut costs.

Getting more out of existing capital will prove critical

Business imperatives

  • Enhance operational efficiency of capital expenditure

  • Invest in cutting-edge technologies and new outsourcing opportunities to redesign workflows and speed up project execution.

Rural consumption will continue to drive domestic demand

Business imperatives

  • Build a strategy for rural market entry and growth that leverages businesses’ existing footprint in traditional Indian consumer markets.

  • Develop a corporate social responsibility (CSR) strategy to help build infrastructure and relationships that will benefit future business initiatives.

  • Invest in nascent technologies to improve the efficiency of far-flung rural supply chains.

Domestic reforms will be critical to India’s global competitiveness

Business imperatives

  • Encourage foreign confidence by supporting the quick implementation of new FDI rules.

  • Partner with government to demonstrate commitment to a stable and transparent regulatory environment.

  • Proactively engage foreign partners to make them aware of the new opportunities created by regulatory change in India.

Increased trade liberalization will set the stage for more balanced business growth

Business imperatives

  • Determine which capabilities will translate into a differentiated competitive position abroad.

  • Redesign operating models to position for global growth.

DOWNLOAD THE FULL REPORT [PDF, 209 KB]

India in 2014: Creating Value with Speed and Quality

The year 2014 was expected to be a watershed for India in political and economic terms. The nation conducted its 16th general election to form the new central government and implement several radical economic policies, such as deregulation of diesel prices and expansion of direct cash transfer of subsidies.

The following are some of the points addressed in the India 2013 report:

Key themes for the year 2014

The growth engine needs a firm push

  • India’s growth engine has slowed pessimistic growth outlook has eroded consumers’ confidence.

  • Sales of consumer goods, vehicles and services such as tourism are likely to be further hurt

  • Robust agricultural growth stemming from a good monsoon season could help reverse this trend.

The fiscal book must balance quality and speed

Operating imperatives

  • Move quickly toward digitized strategic sourcing

  • Adopt a digital shared services model

  • Focus on cash and credit management

Inflation must be confronted

Operating imperatives

  • Government should invest in “connected agriculture”.

  • Industry should be flexible and manage costs.

A new trade dynamic is needed

Operating imperatives

  • Trade agreements must be made cautiously.

  • Government must provide viable investment alternatives to gold.

  • Industry must create value from evolving trade regimes.

Fast-digitizing rural markets are the silver lining

Operating imperatives

  • Government must continue investing in scalable digital platforms.

  • Industry must use technology to create advantage and create a talent management strategy.

Business confidence needs boosting

Operating imperatives

  • Government must execute taxation and sectoral reforms as well as reduce cost of capital.

  • Industry must leverage data analytics.

DOWNLOAD THE FULL REPORT [PDF, 209 KB]

India in 2016: Driving Inclusive Economic Resurgence

Building a strong foundation to drive inclusive economic resurgence is an imperative for India in FY2016* if the nation hopes to launch itself on a double-digit growth trajectory. The time is right, and expectations are high. With inflation under control, a trade deficit of about 1 percent of gross domestic product (GDP), substantive foreign-exchange reserves and an expanding digitally literate populace, growth stakeholders— government and industry—can now aggressively push a reform agenda.

Key elements of the agenda include:

  • Putting the nation’s macroeconomic health back on track.

  • Commissioning state-of-the-art physical infrastructure and building a talent pool with the right skills to drive growth.

  • Creating a policy environment conducive to attracting manufacturing investment.

  • Raising public participation in decision making and in execution of socioeconomic policies

Since assuming power in May 2014, India’s new government has been actively leveraging a range of policy instruments available at its disposal to achieve such goals. For example, through proceeds gathered from disinvestment in profitable public-sector undertakings, auctions of coal blocks and sale of telecom spectrum, the government is generating revenues for bridging fiscal-deficit numbers. By moving toward promulgation of a single goods and service tax (GST) regime across the nation and by launching programs such as “Make in India,” the government is actively wooing longterm inbound investments. In its first budget, the government has also announced a slew of steps toward creating legislative and financial mechanisms to develop high-quality infrastructure. And the “Digital India” campaign aims to promote adoption of digital technologies to deliver government services and promote scalable e-governance.

DOWNLOAD THE FULL REPORT [PDF, 209 KB]

About the Institute for High Performance

The Accenture Institute for High Performance develops and publishes practical insights into critical management issues and global economic trends. Its worldwide team of researchers connects with Accenture’s business leaders to demonstrate how organizations become and remain high performers through original, rigorous research and analysis.

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Authors

Raghav Narsalay
Managing Director of Innovation Research as well as for India and China Research

 

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Mamta Kapur
Thought Leadership Research Manager

 

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Smriti Mathur
Thought Leadership Research Specialist

 

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Luv Nijhawan
Thought Leadership Research Associate Manager

 

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Aarohi Sen
Thought Leadership Research Associate Manager

 

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