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Global expansion is a significant step in a company’s journey. Many companies around the world look to India as a destination for international growth, but companies in India may also find advantageous business conditions, partnerships, recruitment opportunities, and consumer markets by growing outside of India. India-based companies in Europe are making a notable impact on the global stage. If you’re looking for a European business opportunity from India, this guide will cover some of the top countries you should consider.
What makes Europe a good place for India-based companies?
Deciding where to expand your company is a significant decision. Before settling on a specific city or country, you may want to think more broadly about the geographical region where you want to form connections or reach new markets. So, what makes Europe stand out from other parts of the globe? Europe as a whole and European countries individually offer some valuable advantages to India-based companies looking to go global, including:
- Market size: The European Union (EU) forms a single market of roughly 450 million consumers. The sheer size of the European market is a key reason to consider expanding operations to this continent. Both B2C and B2B companies can tap into new markets in Europe and boost their revenue.
- Trade relations: India and the EU have a strong trading relationship. The EU is India’s third-largest trading partner, accounting for just over 11 percent of total Indian trade. For the EU, India falls 10th on the list of its largest trading partners. This relationship is a bit unbalanced, but that can be a motivating factor for India-based companies wanting to make a bigger impact on the European stage. India and the EU are in talks now regarding a possible free trade agreement, which could further strengthen India-EU relations.
- English language: Another advantage that Europe offers is the prevalence of the English language. Though a relatively small percentage of Indians speak English, English is prominently used in business settings throughout India and serves as a lingua franca with other parts of the world, including Europe.
- Educated workforce: Europe is home to some of the world’s most highly educated populations. More than 40 percent of people 25 to 34 years old in the EU have completed some tertiary education. Recruiting in Europe can be a great way to find highly skilled workers who can help propel your company to success.
- Innovation partnerships: India and Europe also share a commitment to innovation. India and the EU renewed the Agreement on Scientific and Technological Cooperation once again. India and the EU cofounded research projects in areas such as solar energy, computational materials science, and vaccines. The Horizon-Europe program is open to the world, so India-based startups may be interested in participating.
Top European countries for India-based companies to expand to
Depending on your industry and your growth goals, you may find a specific country makes the most sense for your company. For most India-based companies, the following eight countries are well worth considering for European growth.
1. United Kingdom
The United Kingdom is one of the most attractive nations for companies looking to grow internationally. London is a major financial center and also boasts a significant technology sector. It’s not surprising, then, that most investments made by India-based companies in London are in software and IT services, business services, and financial services.
In the aftermath of the UK’s withdrawal from the EU, some reasons for choosing the UK have evolved. Establishing a business presence in the UK no longer means gaining entry into the EU and access to its single market. However, the UK itself has much to offer India-based companies, so it may be beneficial to expand to the UK and an EU member state. Another notable development post-Brexit is the potential for a new trade deal between India and the UK.
The UK is home to a large Indian community, which is evidenced in part by the languages spoken in the country. Four out of the five most commonly spoken immigrant languages in the UK are Punjabi, Urdu, Bengali, and Gujarati. Of course, the prevalence of English in the UK is also a helpful point of connection for doing business.
The Republic of Ireland is one of the fastest-growing economies in the EU, largely due to multinational companies operating in the country. It’s no wonder that Ireland has become an attractive destination for international companies. Ireland offers low corporate tax rates, and its workforce is especially impressive. The Irish population is one of the most well educated globally and is second only to Luxembourg in the EU for tertiary education attainment.
Ireland’s biggest industries include financial services, IT, software, pharmaceutical and med-tech, agriculture, and export and trade. India-based companies in these industries are likely to find valuable partnerships and qualified Irish workers to help grow their operations.
Companies in India have additional reasons to consider expanding to Ireland. These two nations have a strong relationship, with bilateral trade exceeding US$1 billion in goods and US$4 billion in services annually. There is also a growing population of Indian immigrants in Ireland that is nearing 40,000.
India and France have long been political allies and have enjoyed a strategic partnership since Paris publicly supported New Delhi’s nuclear program in the late 1990s. For the past two decades, relations between France and India have involved collaboration in areas such as defense, civil nuclear power, space, and security.
These two nations also share a strong commercial relationship. As of 2018, over 100 India-based businesses operated in France. In addition to being a strategic partner to India, France also offers some valuable perks for international companies more broadly. As with most other countries on this list, France’s membership in the EU and its skilled workforce are a major plus.
France is also especially attractive for startups since it’s made a name for itself as a center for innovation. The Ile-de-France region surrounding Paris is the most expansive urban area in Europe and is home to the world’s biggest startup campus, known as Station F.
Another political ally in Europe is Belgium. Belgium established diplomatic relations with India in 1947, making it one of the first European countries to do so. India and Belgium share a strong relationship politically and commercially. India is Belgium’s second-largest destination for exports and its third-largest non-EU trade partner.
International companies in various industries can gain traction in Belgium. India-based companies are especially well represented in Belgium in the IT and software sectors. Establishing a regional headquarters in Belgium can help India-based companies reach the EU market. In fact, Brussels, the capital of Belgium, has been nicknamed “the capital of Europe” and is one of the locations of the European Parliament.
Another advantage in Belgium is that the country has three official languages — Dutch, French, and German. All of these languages are prominent in other parts of Europe, as well, so you may be able to hire employees to help you communicate effectively with other Europeans.
Germany has the distinction of being the largest economy and consumer market in the EU. This fact alone can be a major draw for expanding to Germany. There are some other notable benefits that Germany offers international companies, such as its central position in Europe, which can make it a desirable location for a regional headquarters. Berlin serves as a major European hub, offering direct flights to and from many destinations including Indian cities.
There are also some reasons for India-based companies specifically to consider Germany for their European expansion. These countries have a long history of trade and continue to enjoy a strong business relationship. Germany is India’s largest European trading partner, and India-based companies have invested heavily in Germany, especially in the IT, automotive, pharmaceutical, and biotech sectors. More than 200 India-based companies are currently operating in Germany.
There are also many Indian students — possibly around 20,000 — studying in Germany, and the German government welcomes these students and would like to see even more. Some India-based companies may want to take advantage of this by hiring a mix of Indian nationals and native Germans to run a German subsidiary.
Another country that offers a centralized location in Europe is Poland. Poland’s economy tripled in size in the early 2000s, and its GDP reached an all-time high in 2019. Compared to Western European countries, Poland offers similarly advanced technology and R&D infrastructure at a lower cost.
Because Poland has only recently become a major economy, it was able to skip straight to adopting the most modern technologies. Poland has quickly developed a reputation for excellence in tech and engineering. It’s no surprise that this country has become increasingly attractive to international companies looking to expand in Europe.
Poland and India have long had a positive relationship. Investments by India-based companies in Poland exceed US$3 billion. India’s Ministry of External Affairs points to several key industries where India-based companies should consider collaborating with Poland. These include agriculture and food processing, textiles, energy, pharmaceuticals and chemicals, information technology (IT), and information and communications technology (ICT). India-based IT companies in Poland are currently employing more than 10,000 professionals in the country.
Denmark is another excellent European destination to consider. There are several factors that make Denmark stand out as a desirable location for your company’s growth. For one, it can take just four days to start a business in Denmark, which is a testament to the business-friendly laws and minimal red tape. Denmark currently ranks fourth in the world and first in Europe for its ease of doing business. International recruiters will also appreciate that the Danish workforce is well educated, with 45 percent having completed tertiary education.
India-based companies have additional reasons to choose Denmark for their expansion since these countries have strong ties. Around 5,000 Indian professionals are working in Denmark, either for Denmark-based companies or for India-based IT companies operating in the country. Additionally, about six times that many Indian IT professionals are working in India for major Danish companies.
Recently, Denmark and India entered into a Green Strategic Partnership, which elevated the countries’ relationship. This partnership is focused on various positive goals, including implementing more climate-friendly technologies, creating jobs, and expanding the countries’ political and economic relations.
Denmark’s neighbor, Sweden, is another popular destination to consider for your India-based company’s growth. In fact, close to two-thirds of Forbes Global 2000 companies that have established operations in the Nordic region have chosen to locate their regional headquarters in Sweden. The country has an open, thriving economy, and companies enjoy low corporate tax rates.
Sweden is also home to a highly educated and engaged workforce. Nearly half of Swedes have completed tertiary education, and many more have a partial tertiary education. The technology sector in Sweden is significant, with IT, transportation, and green tech well represented. Sweden is also known for other industries, such as manufacturing, tourism, and pharmaceuticals.
For India-based companies, it’s also significant that Sweden and India share a strong relationship — a relationship that has expanded in the last few years. The relationship between Sweden and India is focused on innovation and technology partnerships. Sweden is considered the second most innovative country in the world, making this an attractive place for India-based startups in Europe.
How will ETIAS visa requirements affect travel from India to Europe?
The Schengen Area includes most of the EU and a few other parts of Europe. Within this area, travelers can go from country to country without contending with any sort of border control. Some countries outside of the Schengen Area have agreements within the area that exempt them from needing visas. However, with recently increased security measures, these travelers must apply for a visa waiver via the new European Travel Information and Authorization System (ETIAS), which is set to be fully implemented by the end of 2022.
The new ETIAS program does not apply to Indian citizens since Indians must acquire a visa to travel to the Schengen Area. A Schengen visa allows travelers to stay in the area for up to 90 days within a six-month period to conduct business or engage in tourist activities. Since a large number of Schengen visas are issued to Indians, EU countries are considering launching a program to expedite Schengen visas for Indian passport holders.
Even if this program comes to fruition, visa requirements make it difficult for Indians to travel back and forth between headquarters in India and a subsidiary in Europe. For this reason and to save time and costs, India-based companies may want to consider hiring Europeans to work remotely. Remote work has risen in popularity across the globe, so now is an opportune time to consider this option for your company’s growth.
Grow your company with Globalization Partners
Growing your company outside of India is a major step. Globalization Partners offers the technology you need to make this process go smoothly. Our global employment platform can help you plan and execute your expansion from start to finish. Globalization Partners has a presence throughout Europe and more than 185 countries.
When you want to hire European talent to work for your company, Globalization Partners will legally employ them in the European countries where you’re recruiting. This allows you to forgo establishing subsidiaries and avoid HR tasks so you can focus on your company’s core competencies. We will handle logistics like employment contracts, payroll, and legal compliance while you enjoy effortless international employment relationships. To learn more about international hiring, download our eBook on the topic, and request a proposal today to get started.