A taste of India appealing to many North West mid-size businesses

India is emerging as a key trading partner for mid-sized North West businesses, new research has shown.

Against the backdrop of a new UK-India Free Trade Agreement (FTA), bosses are looking to widen their international options, claims new research from Grant Thornton UK LLP’s Business Outlook Tracker, with India a core focus international growth market for the region’s mid-market.

The Tracker is a bi-monthly survey of mid-market businesses, with more than 100 taking part.

The most recent, between April 5-17, found that 25% are planning to invest more in growing internationally in the next six months. Many of these have their sights set on India, with 70% of respondents identifying the country as a focus international growth market.

The mid-market is already very familiar with doing business in India, with 60% of the businesses surveyed already having a business presence established.

Of these, almost all (92%) have plans to expand their presence, with the majority having plans to do so within the next two years.

The opportunities that an FTA would offer are also evident to the mid-market. As negotiations continue, almost two thirds (60%) of respondents agree that an FTA with India is likely to encourage their business to explore more opportunities there.

As India’s economy continues to grow in strength, the North West’s mid-market sees many benefits to establishing a business presence in this market. The top three benefits identified by the research are:

• Digital competitiveness
• A large working age population
• A large consumer market

However, while establishing a business presence in an international market can offer numerous opportunities, it also presents challenges. The biggest barriers for the mid-market to building a business presence in India identified by the research are:

• High tariffs and protectionist policies
• Infrastructure
• Ease of doing business

Carl Williams, practice leader at Grant Thornton UK LLP in the North West, said: “India is now the fifth largest economy in the world and is predicted to become the third largest by 2030.

“It therefore presents a huge opportunity for growth for businesses in the North West. As the country is only set to continue to grow, it is an excellent time for both those with an existing presence, and those looking to India for the first time, to be exploring potential opportunities in this market.”

He added: “With the uncertain geopolitical situation at the moment, India offers a stable and certain economic environment for investors and businesses, with, not only a fast growing economy, but also a large working age and consumer population.

“The anticipated UK-India Free Trade Agreement should also help propel the relationship between the two countries further and provide an excellent platform for further investment. An FTA should reduce tariffs and duties to allow for a more level playing field for overseas businesses and give greater access to a large and fast growing market.

“It should also allow for the relaxation of certain regulations and help improve the ease with which businesses in the UK can look to do business with, or within, India.”