Ignore the Indian market at your peril

By Jonathan Morris, July 15, 2010

When the Prime Minister, David Cameron, and the Chancellor of the Exchequer, George Osborne, lead a large business delegation to India later this month, they will demonstrate the significance our new government attaches to one of its key foreign policy commitments - forging a new "special relationship" with India.

It is very important that they do so, for India represents to UK businesses an exciting economy to target at a time when our more traditional export markets, such as the US and Western Europe, are struggling to pull themselves out of the effects of the financial downturn.

Whilst the UK is barely out of recession, India is basking in predictions of economic growth this year of more than 9 per cent. It is true that inflation, economic inequalities and ongoing tensions with Pakistan are matters of concern, but the overall economic outlook for India remains positive. And with a middle class estimated at more than 40 million people (and growing), it would be rather strange to ignore this vibrant market.

Following last year's Indian general election, economic liberalisation is also continuing apace. That is not to say that doing business in India is straightforward. It rarely is in developing countries. However,
a failure to appreciate the great strides which have been made since 1991, when changes to the highly regulated economy began, would be grossly unjust.

Will India become a global economic superpower? To do so not only must the policy of liberalisation continue, but the enormous challenge of improving the country's infrastructure will have to be met.

Whilst the figures may seem daunting (according to recent figures, US$90 billion of investment will be needed over the next five years), the current Indian government appears committed to implementing this goal.

A good example is the construction of the new T3 terminal which opened at Delhi's international airport earlier this month, something which would have been almost unthinkable only a few years ago.

It seems safe to assume that India will continue to provide UK companies with exciting opportunities to grow their businesses.

We just need to be confident enough to take a few risks and so have a chance of realising them.

Jonathan Morris is a partner at the international law firm Berwin Leighton Paisner LLP

    Last updated: 11:20am, July 15 2010