India is known as a difficult country for foreign companies, but under the country's new prime minister the investment climate is improving rapidly. This offers Dutch entrepreneurs enormous opportunities.
The presentation of the Indian budget for 2015/2016, the first of the Modi government, was a breath of fresh air. From the home of my parents-in-law in Trivandrum, South India, I watched on television how Indian Finance Minister Arun Jaitley presented one measure after another that will make doing business in India much more attractive and easier.
On the one hand, there are the hard measures: corporation tax is being cut to 25%, all sorts of import duties are being scaled back and the Reserve Bank of India is being given the formal task of keeping inflation within limits (maximum 6%). On the other hand, there are the soft measures: there will be a one-stop shop for foreign companies to go to if they want to set up an Indian limited company, visa policy will be eased and the tax system will be greatly simplified.
Modi is not only working on the preconditions, his cabinet is also making huge investments in the country in the coming years. More than 11 billion dollars will be invested in improving the country's infrastructure. This money will be spent, among other things, on the construction of 100 thousand kilometres of motorway, the construction and expansion of ports and the improvement of the railway network. Delhi is also investing in social facilities, such as the construction of millions of public toilets.
Recent developments in India offer Dutch companies enormous opportunities. Some Dutch SMEs, such as Syntech International and Fresh Food Technology, are already benefiting from them, but many Dutch companies are still ignoring the country because of the outdated notion that doing business in India is too difficult. Now that Prime Minister Modi is thoroughly improving India's investment climate, it is time to wake up and change that negative image. For entrepreneurs who want to conquer the world's largest growth market, it is now or never.
Bart Hergaarden is partner of IndiaConnected.
Respond bart@indiaconnected.nl or @barthergaarden