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SimulTrans Localization Blog: SimulTips

India: An Emerging Light for Localization in 2018

[fa icon="calendar"] December 29, 2017 / by Vinodh Nedyavila

India’s economic growth.jpg

India is set to become the world’s fifth largest economy (in real GDP terms) in 2018, surpassing Britain and France. According to Statista, India’s real GDP in 2017 grew 6.72% from the previous year. India’s real GDP growth is forecasted at 7.37% for 2018 (even higher than China’s forecasted 6.8%) and expected to increase further in the next decade.

Given that India is one of the fastest growing economies (if not the fastest growing) in the world, what are the drivers behind India’s strong economic performance, and how does localization come into play?


Drivers of India’s Economic Growth

1. Infrastructure Development and Foreign Direct Investment

Recently, India’s government has placed more emphasis on developing the country’s poor infrastructure. To shed some light on the enormous potential of India’s infrastructure sector – India has the world’s second largest road network and the fourth largest railway network, but much of these are obsolete, inefficient, or malfunctioning and could do with upgrading or reconstructing. A sharp rise in infrastructure development projects, mainly focused on power, roads, railways, bridges, dams, and urban infrastructure, has allowed for expansion in both the construction and manufacturing sectors as well.

These infrastructure development initiatives have caught the attention of foreign investors. Although India’s government funds the majority of its infrastructure development, foreign direct investment (FDI) from countries such as Mauritius, Singapore, Netherlands, USA, Germany, and Japan continue to help grow India’s infrastructure sector, which now represents approximately 5% of India’s GDP.

2. Population Growth and Urbanization

India’s population is currently over 1.3 billion (17% of the world population) with a strong population growth rate of 1.2%. India’s working population (519 million people) makes up 41% of its total population. 12% of Indians work in urban areas, and India’s urban population growth is 2.3%.

Growth in the working population combined with urbanization in India means more Indian consumers have purchasing power. Consumption is more centralized in urban areas where people are more exposed to global brands, fashion trends, modern technology, and better jobs and business opportunities.

3. Young Population and Higher Education

India has a remarkably young population when compared to most other countries, especially China. 50% of Indians are under age 25, and 66% are under age 35. The importance of education is culturally engrained in India. India’s technological universities (IIT) are world class, and there are now over 7 million college graduates per year. Many of these graduates become engineers in India’s expanding IT sector, with some even making their way to other global IT hubs (e.g. Silicon Valley).

Although creating enough jobs to match the jump in number of college graduates continues to be challenging, improvements in India’s education system along with the rising number of educated, skilled, and tech-savvy youths have enabled India’s workforce to expand. These are major factors behind the greater purchasing power enjoyed by Indian consumers. Sustained growth in purchasing power in India is expected to continue for at least the next 20 years.

4. Rise of the “Urban Mass”

The increase of consumption in India is largely a product of its rising “urban mass” – 129 million working Indians with average income over US$3,200 (10% of India’s population and 25% of India’s workforce). Trends indicate that both the number of people and income levels within India’s urban mass will rise in the next 5-10 years, making the urban mass an integral part of India’s continued GDP growth.

The urban mass can be divided into “educated urban mass” and “urban blue collar” subgroups. It is important to note that the “educated urban mass” generally consists of people who are not college educated and work in lower level government and corporate jobs and in small and medium enterprises (SMEs). The “urban blue collar” group consists of people who are not college educated and work in urban labor jobs or are migrant workers. Although most of the urban mass is not college educated, the aggregate income of the urban mass is over US$415 billion – 18% of India’s GDP!


Localization in Indian Languages

Localization is one option for any expanding business to raise brand and product awareness, generate demand, establish trust, and to nurture and support its global client base. Although English is one of the 23 official languages of India, less than 20% of the population is English literate. This means that the vast majority of Indian consumers can benefit from localized products and services, and that localization can prove key to tapping into India’s expanding urban mass.

The five most widely spoken Indian languages are:

  1. Hindi (366 million speakers)
  2. Bengali (83 million speakers)
  3. Telugu (74 million speakers)
  4. Marathi (72 million speakers)
  5. Tamil (61 million speakers)

The number of Hindi speakers alone exceeds the current U.S. population (325 million), clearly showing the enormous potential localization has in the Indian market. By the end of 2017, there are expected to be 340 million smartphone users in India, indicating the potential gains that could be made by localizing software for mobile apps, games, and eCommerce platforms.

As 2018 approaches and India’s economy continues to surge, will you touch the emerging light that is India's growing consumer base through localization? Click below for a free personal consultation with a SimulTrans expert about localization in Indian languages. Wishing everyone a very Happy New Year!

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Topics: International Business Strategy

Vinodh Nedyavila

Written by Vinodh Nedyavila

Vinodh is an Account Manager and Marketing Specialist at SimulTrans' HQ in Mountain View, California, and focuses on new business development, inbound marketing, and creative writing. With a background in Economics and International Relations, and experience working in the US, Singapore, and Japan, he is a valued member of the ever-expanding SimulTrans team, and passionate about bringing the world closer together through localization services.