The India imperative for the global corporation: for American companies searching for smart business investments abroad, India remains a powerful source of opportunity and potential financial success.

• Author: Kumar, Arun
• Position: INTERNATIONAL BUSINESS

India stands near or at the top of the agenda of almost every global corporation. This makes good business sense, since India possesses the combination of strong economic growth and depth of human resources. Taken together, these two represent short-and long-term growth and profit opportunities that few corporations and investors can find in other markets.

India's twofold opportunities--serving the demands of a growing Indian market and using the country as a source of talent, services and products for global customers--can be viewed as a "Janus strategy," depicting the two-faced Roman god of beginnings, with one face looking inward while the other looks outward.

Looking Inward

As Western economies continue to recover from the two-year financial crisis, the recession is virtually forgotten in India. After a six-month pause starting in September 2008, India's growth began to rapidly recover, fueled by strong domestic consumption. Industrial production is also rising, and most forecasters are expecting its gross domestic product to grow by 8 percent. Its political and business leaders would like to accelerate that growth to more than 10 percent.

In absolute terms, this means that India's growth in GDP could be the same as that of the United States this year. If one were to apply purchasing power parity, India's real growth would be about four times that of the U.S.

This growth translates into demand for products and services such as roads, buildings, power and communications infrastructure to create the new townships and cities that the country needs.

The demand is also for education at all levels, for the defense and national security needs of a growing power and for the consumption needs of a rapidly growing middle class that could comprise half a billion people within the next 15 years.

Still, it was reported last July in financialexpress.com that total revenues from the India operations of many leading U.S. corporations represent 2 percent or less of total global revenues, offering tremendous room for growth. Some chief executives have adjusted their India operations projections with a goal of growing revenues fivefold over five years, resulting in a 5- to 10-percent share of total global revenues. One Fortune 100 CEO apparently told his staff that India's opportunity is so big and urgent that they should adopt a "ready, shoot, aim" approach.

Many U.S. corporations recognized India's potential early and created their own initiatives and...