India in the spotlight: A leader’s guide

Leading Off

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Leading Off

Few global companies can afford to ignore the growing importance of India. As the world’s fifth-largest economy, with a rapidly expanding middle class and one of the largest consumer markets in the world, India presents promising opportunities in almost every sector, from chemicals to healthcare to fashion. But many challenges remain. In a new article on India—part of our McKinsey Explainers series—we discuss seven factors shaping the country, and this week, we explore some of these trends in depth.

An image linking to the web page “Achieving extraordinary growth: Myths and realities” on McKinsey.com.

Indian companies could play a critical role in advancing the country toward economic inclusion, according to McKinsey research. An estimated 77 percent of Indians live below the economic empowerment line, which we define as having the means to meet the full range of essential needs and begin attaining economic security. In our analysis of the performance of 837 Indian publicly traded companies between 2012 and 2022, we found that one in every five companies doubled their revenue every five years and quadrupled it in ten, achieving revenue growth of 15 percent or more, compounded annually. This vigorous expansion can catalyze India’s GDP growth, especially if other companies follow the leaders and accelerate their core businesses through digital technology and data, agile resource reallocation, and investing in leadership capabilities.

An image linking to the web page “How Blackstone is helping to build India’s next generation of global companies” on McKinsey.com.

Investors used to balk at the lack of adequate exits and options in India. But the market has changed, says Amit Dixit, Blackstone Private Equity’s head of Asia, in a conversation with McKinsey senior partner Vivek Pandit. “You don’t have to put your head in the storm,” says Dixit. “We tend to be long-term investors and don’t have to either invest or exit anything right away.” One of Blackstone’s most effective strategies in India is to partner and align closely with stakeholders. “We’re ensuring that the right people, with the right alignment, are in critical leadership roles in our companies,” Dixit says. “And when I say ‘leadership role,’ I don’t mean just the CEO or CFO. Typically, our management teams have equity programs extending to 150 to 200 people. We have recognized the power of ownership and brought that equity ownership culture into the Indian management teams, and that’s worked well.”

An image linking to the web page “Salesforce’s Arundhati Bhattacharya on lifelong learning and talent reinvention” on McKinsey.com.

Lead by developing an India strategy.

— Edited by Rama Ramaswami, senior editor, New York

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by "McKinsey Leading Off" <publishing@email.mckinsey.com> - 04:49 - 5 Aug 2024