The Indian economy has long been an attractive investment destination for multinational corporations. Already a large domestic market, Frontier Strategy Group’s estimates suggest the country will average growth rates between 7.4% and 7.6% over the next three years.
You Don’t Need an “India Strategy” — You Need a Strategy for Each State in India
On the surface, the Indian economy looks like an attractive investment destination for multinational corporations. But it’s one of the most difficult markets for multinational firms, with bottom line growth a perennial challenge. The main reason for the poor performance is a complex and unpredictable regulatory landscape. If multinationals want to succeed in India, they need to better understand the market – and this means understanding individual states and their business environments in a lot more detail. Most companies, including the ones mentioned above, approach India as one market when they should be thinking of the different states as individual markets. After all, what works in Gujarat will not necessarily work in West Bengal. Aside from understanding how India’s states differ, companies must also create a well-thought-out plan for allocating resources across states. A simple yet powerful three-step framework can help companies effectively prioritize markets in the country.