Opportunities, Challenges, and Strategies for New Zealand Businesses in the Indian Market

Topics: India, New Zealand, Government of India Pages: 9 (3297 words) Published: May 24, 2013
Since the economic liberalisation in the 1991-92, India’s global presence has been steadily increasing. It is one of the fastest growing economies of the world with growth rates of 6-7 per cent per annum. Due to it favourable demographic and geographical location, India plays an important role in world today and economic strategies of EU and USA can be testimony to this. India can become the third ‘global economic giant’ by 2050 and its share of global GDP in $ terms could increase from 2% in 2009 to around 13% in 2050 (Hawksworth, Zimmern, & Boxshall, 2013). New Zealand on the other hand has traditionally been a small economy and has heavily relied on United Kingdom and rest of the world. The nation has not faired very well economically due to its remote geographical location, small size of firms and its dependency on primary sector. However, there has been recent shift towards secondary and tertiary sector and also towards other economies of the world primarily focusing on India and China. India at present is New Zealand’s 7th largest market. India has a huge consumer market of over 1.2 billion and rising. According to (Beinhocker, Farrell, & Zai, 2007), India will be the world’s fifth largest consumer market with middle class rising to 583 million. Hence, it provides a great opportunity to New Zealand business to tap this huge market which is not available to them in their country. The other opportunities arising in in India are in its manufacturing sector which has been lagging behind in the overall development of the nation but is now being the focus of attention. India has emerged as a global headquarter for frugal innovations and engineering due to it sensitivity to low resource environment. India thus, presents an opportunity of a unique business model whereby it is attracting global talent in value creation through rapid transformation in product engineering business and business in New Zealand focus on innovation to survive thus, they can benefit from this too. The firms in New Zealand which are looking forward in reducing their cost can benefit from the well-educated and low cost workforce through business process outsourcing. Though the Indian firms have skills and capital but what they lack is the expertise and innovative ability which is offered by their New Zealand counterparts which lack the capital. Hence, India offers the opportunity to New Zealand firms to fill the potential gap and leverage the best out of them for a sustainable growth. The various sectors which the New Zealand firm can enter and deliver in Indian market are as follows: 1.Infrastructure:

According to the Twelfth Plan five year plan of the Government of India, there will be and estimated investment of 55.7 lakh crore in the infrastructure sectors which as per the prevailing rates would be roughly one trillion dollars with a private investment rising from 36.61 per cent in the eleventh plan to 48 per cent in the twelfth plan to meet the targets (Planning Commission - Govt of India, 2013). There is huge number of projects being under taken through Public Private Partnership (PPP) in the development of airports, ports, highways, power and now in railways too. Expertise of New Zealand firms is highly looked upon by their Indian counterparts in engineering consultancy and construction. New Zealand firms can offer services like project feasibility, planning, designing and implementation which are in short skill in India. Also they can perform a quality check and control which is often lacking in their Indian counterparts. A good example of this can be Beca Group which entered the Indian market in 1997-98 to provide consultancy to their Indian partners on road and highway development projects. Another firm which helped the government by providing consultancy services was Robinson Seismic which entered India after the Gujarat earthquake of 2011. New Zealand firms can offer another support services related to infrastructural development. Firms...
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