Businesses tapping India, other emerging nations for expansion
New Delhi: Globalisation is no more a one way street, as a significant number of business leaders are looking for international expansion opportunities in higher growth emerging markets including India, a report says.
According to assurance, tax and advisory firm Grant Thornton's International Business Report (IBR), globally, 57 percent of those business leaders considering international expansion are looking at the five biggest emerging economies - China, India, Russia, Brazil and Mexico.
The report added that many business leaders in mature economies, who are stuck with weak growth rates at home are looking for expansion opportunities in higher growth economies, while their peers in emerging economies are looking to access technologies and skills from mature economies.
"Dynamic businesses are constantly looking for growth opportunities and expanding into different markets can boost business growth prospects. Emerging economies traditionally offer low-cost inputs such as labour and land, and also vast consumer markets," Grant Thornton in India National Managing Partner Vishesh Chandiok said.
Around 63 percent of Japanese businesses and 45 percent of those in the G-7 are looking at opportunities in China, while 59 percent of German businesses are looking at Russia and 57 percent of North American businesses are looking at Latin America.
As much as 50 percent of Indian businesses are looking at opportunities in the Middle East.
"International expansion is no longer a one-way street. Increasingly cash-rich businesses in emerging economies are looking for expansion opportunities in mature markets, whether through opening premises or buying distressed assets," the report said.
About 59 percent of businesses in Turkey, Russia (37 percent), India (33 percent) and China (27 percent) are looking at opportunities in Western Europe.
"Reason might tell businesses not to invest in slow-growing mature economies. But instinct might suggest that acquiring a struggling company would provide access to strategic markets, workers or technologies," Chandiok added.
Regarding India, Chandiok said "the size of the Indian market and the young, dynamic, well-qualified workforce offer tangible opportunities, but investors should partner with a strong, credible local advisor to allow them a 'soft landing' with complex Indian regulations".