India as a Major Marketplace and Business Center in the World Economy

During early 1990s, in a move to boost the foreign reserve and to recover the economy that was struck with the cost of holding 3 general elections in less than 2 years, the Indian government opened up its economy to the foreign investors. At that time many conservationists criticized the move stating that it will have a huge impact on the local industry and the local economy. Now, after more than 15 years since its implementation, it has proven wrong all the criticism and skepticism. India is one of the largest growing economies in the world and is clearly one of the largest growing marketplaces in the world.

In order for any country’s economy to succeed, it has to have a strong middle class society. India’s middle class society constitutes of more than 300 million people. This size is as big as the entire population of the United States. The outsourcing of high technology labor from United States and the European countries has created a fast growing middle class with a growing purchasing power. The largest middle class in the world coupled with this new consumerism has made it very attractive and profitable for all the major corporations of the western world. India is also seen as a large place to be the business center of the world. With a large population of low cost, highly skilled technically qualified people, many large western corporations are shifting part of their business in India. In addition to the growing economy and the population, the other big advantage India has is the command over English. India, a former British colony, has adapted English as its unofficial official language. This has also helped in integrating the largely diverse population that speaks more than 20 different languages. Almost every urban Indian can read, write and speak English with equal fluency. This also gives a confidence to the western corporations in communicating with their Indian counterparts with ease. On the other hand, there is a big competition among the major Indian cities and provinces to attract more and more overseas investors. The local authorities are offering great incentives to the investors and businessmen to come and start business in their local areas. These incentives include free land, free electricity and a break in sales and income taxes. This reduces the infrastructural and operational cost for the investors and increases their overall profitability.

India offers a double edge advantage to the western corporations. One, a large consumer base with a great purchasing power and the second a large population of technically qualified people who can do the same quality of work at a much lower cost. This has made India such an attractive marketplace that is very hard to deny. Although, it might impact local jobs in the western country in the short term, but at the end, it allows the corporations to remain competitive and profitable. It also helps their overall earning and ultimately helps the entire world economy.