While India continues to be an attractive destination for international investors and businesses, success would depend on how well they prepare to face ground realities, a visiting expert has said.
Nitin Shingala, Regional Director of the TMF Group in India said that despite streamlined systems and procedures, compliance and other issues could be daunting and even deterring.
“Foreign companies will do well with expert assistance in business registration, putting in place robust accounting processes, taxation and other compliance issues. The laws in India can be baffling with federal legislation, and statutes differing between various States in the country,” he said.
Mr Shingala was speaking at a Lunchtime Forum on ‘Insights to India’ organised by ASB Bank at its North Wharf (Auckland) office on May 5. Richard White, New Zealand’s Trade Commissioner for North & East India based in New Delhi and Mike Atkins, Head of Trade Finance at ASB were among the other speakers.
Immense potential
Mr Shingala said that India offers immense potential for foreign capital and businesses.
“New Zealanders will find a number of common factors in India. While the two Governments are negotiating for a Free Trade Agreement, the existing and emerging opportunities should not be lost. Companies, irrespective of their size, that established their presence with sound plans and strategies, have done well. Consultancy firms that are global in extent and national in substance have enabled foreign companies to work through legal and other complexities,” he said.
Huge investments
He provided a number of examples to illustrate the importance of India as a profitable business destination. According to him, Vodafone invested £1 billion in March 2014 to increase its stake to 100% following the acquisition of a spectrum license for total investment of £1.9 billion.
Maruti Suzuki is the biggest success story with 37% market share, while Audi reported 11% growth in 2013 sales at 10,002 units. In 2008, Samsung invested US$13 million to set up a Research & Development Centre. Today it is a leader in the television and refrigerator market with annual revenue of US$ 5 billion.
Mr Shingala quoted the Ernst & Young 2014 Survey, saying that India is expected to be among the top three economies of the world by 2020, particularly for economic growth and manufacturing.
Substantially improved infrastructure, extensive R&D facilities, and a strong manufacturing base have all made India a regional and global operations hub, competing directly with developed economies. With consumer spending placed at US$ 1.06 trillion (2011), the country offers ample scope for international players.
Communications growth
The number of telephone subscribers is more than 932 million, while the Internet is expected to cover 243 million users by the end of this year and 330 million by 2016,” he said.
According to him, VMware, an American software company has announced an investment of US$500 million over the next three years, Lactalis Corporation, the world’s largest dairy products group acquired Hyderabad-based Tirumala Milk Products for US$275-300 million and Luxury watch brand Jaeger-LeCoultre has filed for 100% single brand application to enter the Indian retail market.
Global leader
The TMF Group is stated to be a global leader in financial data, news and analytics through state-of-the-art technology, providing comprehensive accounting, tax compliance, pay roll and human resources services for businesses.
Established as a Trust Company in The Netherlands in 1988, it has grown to account for 100 offices in 75 countries, employing more than 4000 professionals serving about 35,500 clients, 40% of them among Fortune 500 companies.
TMF has four offices in India (Mumbai, Noida, Delhi and Bangalore) with a complement of 110 staff. Its New Zealand office, based in Auckland, is led by Managing Director John Thorman.
