India was hit hard in the first wave of the pandemic. In September, there were more than a million active cases, and over 150,000 have died to date. The economy took a subsequent hit as lockdowns and restrictions impacted businesses and productivity.
However, the country has remained largely unscathed by the second wave that’s sweeping much of the world. With the country bouncing back from the virus, and boosts to the economy announced in last month’s budget, India is set to see a year of substantial growth and recovery. Data reveals that the Indian economy is set to grow by 10% in the next fiscal year, making it the fastest growing emerging market economy in the world.
India is set to see growth across the small business sector, following this month’s welcome announcement of tax holiday extensions and £1.6 billion of funding – more than double last year’s figure – allocated to the Ministry of Micro, Small and Medium Enterprises (MSME). Other measures to be put in place included collateral free loans for businesses, and the launch of a fund of funds for MSMEs.
With SMEs accounting for 99.9% of the UK’s business population (6.0 million businesses), and three fifths of the employment, SMEs holding the potential to power a strong recovery to the UK economy, Rishi Sunak and the government should take inspiration from India to give the UK economy a similar boost.
India’s bounce back may also present a more direct solution for the UK. The UK and India have just agreed to an Enhanced Trade Partnership (ETP), offering UK businesses new opportunities for trade and investment in one of the world’s fastest growing economies.
Nayan Gala, founding partner at venture capitalist firm JPIN VCATS shares his view on India’s recovery and the lessons the UK can learn.
“It’s great to see India recover so well from the pandemic, and it offers opportunities for the UK. The economic expansion predicted for India through small businesses will also be the cornerstone of the UK’s recovery – and growth is something that startups and small businesses excel in, even in the toughest of circumstances.
The UK will also benefit from India’s economic boom through the Enhanced Trade Partnership. India is a 21st-century powerhouse – the UK-India trading relationship is already worth almost £24 billion, with 383 Indian companies in the UK employing more than 82,000 people. The deal will really allow the UK to benefit from the immense growth India is about to experience.”