India’s economy has seen remarkable growth in recent years and there are numerous factors that are anticipated to drive this trend even further in the near future. It is no surprise then why India is experiencing such tremendous economic expansion. At the same time it is also important to note that the Indian economy is complex, and there are several risks and challenges to be considered. Besides political stability, economic reform, and the overall international economic situation, other components might have a say in the national economic growth.
Saying all this; It is important to highlight that there are several reasons for anyone to consider investing in India’s Venture environment. 2021 was a banner year for Investments in India (PE-VC investment doubled). VC investments experienced staggering growth in 2020, with a 3.8x increase compared to the global average of 1.9x growth. This accounted for 50% of all private capital deployment.
A few reasons to consider investing in India and why investing in India in 2023 will be different from investing in Silicon Valley or US startups
Firstly, Indian Talent & Entrepreneurs is staying at Home
In recent years, India has seen a surge in the number of talented entrepreneurs and professionals staying back in their homeland rather than moving abroad. This has led to the end of the Indian brain drain, where highly skilled individuals would leave their homeland for greener pastures. The result is that founders are either staying in India or even coming back to build businesses and create opportunities.
This trend is being driven by a strong entrepreneurial spirit among Indians and an effort from the government to make it easier to do business in India. This has led to an increase in venture capital investments into Indian startups, and more people are looking at opportunities within the country instead of abroad. With this shift, India is poised to become one of the leading economies in the world as more people stay home and contribute to its growth.
Secondly, The Scale is just “ginormous”; and not just the bugs 🙂
India is a rapidly growing economy, and its Gen Z population is one of the main drivers of this growth. With over 600 million people under the age of 28, India has a huge potential for economic growth. This generation has access to the latest technology and are well-equipped to take advantage of the opportunities that come with it. India is home to the second largest internet user base in the world. This is largely due to the rise of Jio and other platforms, which have made unlimited data more affordable and scalable. The increased internet penetration has opened up numerous opportunities for businesses and individuals alike, allowing them to access resources like never before.
Indians are also more open to new ideas and approaches than previous generations, making them ideal for driving innovation in India.
if we just look at Sheer Numbers
GDP growth: India’s GDP has been growing at an average rate of 7% per year over the past decade. According to World Bank, India’s GDP growth is projected to reach 11.5% in fiscal year 2022, making it one of the fastest-growing major economies in the world.
FDI: Foreign Direct Investment (FDI) in India has been growing rapidly in recent years. According to the Reserve Bank of India, FDI inflows into India reached US$ 74.39 billion in 2020–21; and a recent World Bank report said India will be the first country in the world to receive $ 100 billion from remittances during; being the world’s top recipient of remittances.
Government initiatives: The Indian government has been actively promoting entrepreneurship and start-ups through various initiatives and policies, and also focusing on improving infrastructure and ease of doing business which could attract more investments.
Per capita income: is set to rise from US$2,278 now to US$5,242 in 2031, setting the stage for a discretionary spending boom. More importantly, the number of households earning in excess of US$35,000/year is likely to rise fivefold in the coming decade, to over 25m.
Finally, ambitious Indian entrepreneurs wish to expand their horizons internationally.
India is fast becoming a hub for startups and entrepreneurs who are hungry, technical and relentless in their pursuit of global ambitions. With over 100 unicorns, India is now home to some of the most successful companies in the world. These scrappy founders have been able to leverage their technical skills and business acumen to make a mark on the global stage. This article will explore how Indian founders are taking their businesses global, what challenges they face and how they are overcoming them.
The Indian scrappy founders have been making a mark in the global startup ecosystem with their innovative and disruptive ideas. They are now looking to expand their reach and go global, while still leveraging the local consumer base they have built.
The “Build Local and Grow Global” approach is becoming more popular among Indian entrepreneurs, who want to create a global presence while still providing value to their local customers. This approach allows companies to test their product in the Indian market at a much lower cost and decreased “burn” rates. It also helps them build up their customer base and expand into other countries such as the US or Europe for increased revenue with less risk involved. India is still much more cost-effective compared to other countries, which can help businesses to reduce their costs and increase their profitability. By having a localized focus first, they can ensure that they are able to provide the best possible product or service before hyper scaling.
Also, the Indian workforce is known for its hard work and dedication, which makes them an ideal choice for companies. Indian talent can be used to develop cutting-edge products and services that will help businesses stay ahead of the curve, even in Global markets. This means that businesses can benefit from having access to a wide range of skillsets without having to invest heavily in recruiting or training new staff members.
All in all, before investing in any companies, it’s important to do your homework and perform sufficient research. Additionally, you might want to consult with a venture professional from India to make sure you’re making the right call when it comes to investments. Despite that, in 2023 India can still be a great place to invest in startups and make size-able profits. The current macroeconomic climate also showcases that there will be good deals — so stay sharp and stay on the lookout 🙂
Author:
Guneet Bedi
