Time is ripe to enter India

India is currently the most dynamic economy in the world. Narendra Modi, who was elected to premiership in a landslide victory in the country a year ago, has been carrying out sweeping structural reforms to make the economy more appealing to investors at home and abroad. He has been touting the so-called “Make in India” campaign to turn the country into an industrial powerhouse through deregulations and foreign investment.

Thanks to improvements in manufacturing competitiveness and business environment, foreign direct investment to India has increased by 30 percent since Modi took office. China and Japan are making fast inroads. The International Monetary Fund estimates India’s economy will grow by 7.5 percent this year, beating China’s 6.8 percent pace. Some are already speculating that India could be the next China, or could even grow as big.

South Korea and India elevated bilateral ties to a “special strategic partnership” during Modi’s visit to Seoul and in summit talks with President Park Geun-hye. The two leaders agreed to expand the existing Comprehensive Economic Partnership Agreement trade pact by June next year. The Modi government’s campaign to strengthen manufacturing to drive the economy could learn from Korea’s industrialization and modernization experience. During his two-day stay, Modi met executives of Hyundai Motor, Samsung Electronics and LG Electronics among other business leaders and visited the Hyundai Heavy Industries shipyard in Ulsan.

India is a growing market with a population of 1.28 billion. We must not miss business opportunities during the country’s transitional stage. But the heavily religious and conservative market is still not easy for foreign companies to get into. Hyundai Motor has succeeded to make itself the second-largest carmaker in the country. But Posco has not been able to construct a steel mill there even with a contract to do so due to opposition from residents and because of regulations.

Industry insiders say India can be a difficult market to crack and succeed in without thorough study and endeavours to understand the cultural and religious differences amid the poor infrastructure, lack of transparency and rigid social hierarchy. But we nevertheless must enter the market. We should seek out a new growth engine and opportunities there through a careful and clever strategy.

JoongAng Ilbo, May 20, Page 30