In a wobbly financial world, the Indian economy manages to retain a steady composure, with critical parameters displaying stability that stems from strong economic growth, comfortable forex reserves and a manageable current account deficit, among others.
Reflecting on the economic prowess of India, Prime Minister Narendra Modi made the stunning announcement that India will become the third-largest economy in the world by FY 2028. This milestone will likely be achieved two years earlier than projected, with India surpassing Japan and Germany at the current growth rate. India would then account for a 4% share of the global GDP; only trailing behind the USA and China. That being said, India will need to target a sustainable 8% growth to provide sufficient employment to millions of job aspirants.
Presently, on the back of strong domestic investment, the GDP for FY 2024 is projected at 6.1% by economists. However, the Reserve Bank of India (RBI), India’s central bank, maintains the growth estimate at 6.5%. One of the key performance indicators, the Goods & Services Tax (GST), India’s single tax, clocked USD 19.5bn for June 2023, reporting 12% higher collections over the same month last year. GST, introduced six years ago, has come of age riding a vigorous economy, continued economic momentum, and strong anti-evasion measures.
Another reason for cheer is India’s forex reserves which closed at USD 607bn, crossing the benchmark of USD 600bn after 15 months. Additionally, India remains a favourite insofar as Foreign Direct Investment (FDI) is concerned, reporting a 10% increase in inflows, despite an overall global decline in FDI investments. The all-important reforms agenda may take a back seat with the central elections slated for the summer of 2024. Hopefully, the plan will return to centre stage after the elections with a stable central government.
Moving to India’s foreign trade, the persistent geopolitical tensions, disruption in global supply chains due to the Russia-Ukraine war, monetary tightening, and recessionary fears have led to weakened global demand. The April-June quarter of 2023 showed a slowdown in merchandise exports as compared to the heady growth of the preceding year which was partly fuelled by high oil and food prices. Against this backdrop, India has an agreement with the UAE to trade in local currencies, and is internationalising the Indian rupee, after entering into a similar arrangement with Russia. Acceptance of the rupee as a base currency is essential to insulate India’s trade performance with its growing heft in the global economy. This will also bring succour to exporters and protect against exchange-rate risks.
On the business front, a story gathering large momentum is India’s meteoric rise as a global powerhouse of start-ups. With 98,000+ start-ups, 400+ incubators, and 108+ unicorns, India is emerging as the world’s start-up capital. The success of the start-up community is partly driven by India’s famed digital public infrastructure. These ventures are transforming India’s socio-economic landscape, attracting the interest of international investors and foreign governments. To ensure that adequate corporate governance and self-governance are integrated into the start-ups, a newly established Startup20 Engagement Group under India’s G20 presidency has recommended a possible Startup Governance Maturity Level Framework, addressing each stage of a start-up’s journey.
On the energy front, India seeks to become energy independent by 2047 and achieve a net zero goal by 2070. Using renewable energy across all economic spheres is central to this goal. Green Hydrogen is considered a promising alternative for enabling this transition. The Government approved a National Green Hydrogen Mission in January 2023 to make India a leading producer and supplier of Green Hydrogen in the world. The mission outcome projected by 2030 is development of a green hydrogen production capacity of at least 5 MMT (Million Metric Tonnes) per annum with an associated renewable energy capacity addition of about 125 GW in the country, with over USD 100bn investment that has the potential to create 6,00,000 jobs and achieve a reduction in fossil fuel imports to the tune of nearly USD 12bn.
India continues to attract global attention where hiring talent is concerned with an estimated projection of nearly half a million new appointments by Global Capability Centres (GCC) that are being set up by multinationals. The government is drawing up a skill-upgrade plan which includes partnering with 30 countries, focusing on specific sector requirements, as part of its multi-pronged strategy to train and supply skilled Indian workers across the globe. To support this initiative, around 30 ‘Skill India International Centres’ are being set up nationwide.
With a satisfactory monsoon in progress across most parts of India (which has a deep impact on the economy), India can look forward to the deliverance of a robust economic performance for this financial year.
Between 30 May 2023 and 30 July 2023, around 82 M&A deals were announced, of which 41 deals were closed. The aggregate value of deals announced was USD 2,856.69mn; dominated by 63 domestic deals (USD 1,119.69mn) and 19 cross-border deals (USD 1,737mn).
In terms of sectors (considering only closed deals), the Consumer Discretionary sector saw deals worth USD 265.65mn, followed by the Financials sector with deals worth USD 56.96mn and Healthcare sector with deals worth USD 38.53mn.
The globally mobile workforce is a crucial element in the success of organisations seeking to expand their reach and gain a competitive advantage in the global marketplace. It enables companies to unlock new markets, connect with diverse consumer bases and gain insights into local cultures and business practices.
The pandemic indefinitely changed the world of work, especially international workforce mobility, ushering in new trends that are transforming the erstwhile space. It thus becomes crucial for organisations to meticulously evaluate how these trends impact their compliance framework as they engage in talent mobility, globally.
Global Mobility Trends
How to Manage the Impact of Changing Trends on Global Mobility Frameworks
To thrive in a constantly evolving world, organisations must proactively brace to tackle the challenges posed by global mobility. This approach allows them to reap the benefits of a diverse and globally competent workforce and provides employees with an opportunity for personal and professional growth as they embark on cross-border journeys.
Global mobility as a discipline, is not new, but COVID–19 outlined its prominence like never before. The pandemic transformed the already VUCA (Volatility, Uncertainty, Complexity, and Ambiguity) business environment to BANI (Brittle, Anxious, Nonlinear and Incomprehensible) as the swings and frequency of the former increased multifold. To combat this frenzy, businesses realised the need for diversification, be it in revenue streams or talent, and mobility naturally emerged as the key stratagem to serve these purposes.
Organisations need to explore new geographies to expand their customer base and markets. This requires the physical presence of staff in new locations to gain intelligence on the local business environment and hiring local talent to build relationships. Mobility assists with both. Research shows that a company with 50% international business can optimise its performance by hiring 25% of its executives from the countries in which it plans to operate.
The concentration of talent pool in one country is a thing of the past; modern organisations focus on tapping the global talent market. It helps in offsetting the labour market risks through diversification and provides avenues of skill development and knowledge transfer to existing employees. The movement of employees between geographies results in an exchange of ideas and skills that helps foster a culture of learning and continuous improvement.1
Employees are inclined to stay with organisations that invest in their personal and professional growth. The war for talent is real and global opportunities are undoubtedly an incentive. In a study done with 600 professionals and HR executives, 96% agreed that effective mobility programs increased employee performance and retention.2
Mobility results in the rampant and widespread exchange of ideas - innovations in one nook are made available in another. The cross-country movement of employees accentuates knowledge transfer, which helps organisations gain a competitive advantage to bring holistic solutions. Moreover, such collaboration fosters cultural sensitivity and adaptability, crucial for furthering a harmonious and inclusive work environment.
Modern-day organisations need leaders that demonstrate adaptability, sensitivity, inclusion, spontaneous thinking along with technical expertise. Mobility provides the requisite exposure to hone such skills, thereby preparing future leaders and minimising the skill gap.
Besides being a key contributor to business strategies, mobility is evolving to align with emerging global needs -
Global mobility contributes to all ESG components:
DE&I initiatives bring diversified experiences, knowledge, and perspectives that together provide impetus to organisational growth. Mobility has the potential to congregate people from different ethnicities and backgrounds, furthering the DE&I goals.
The pandemic brought a shift to remote work - employees now travel for leisure while continuing to work. Organisations, therefore, are looking at ‘taking work to employees rather than bringing employees to work’. 74% of employers want to shift at least 5% of their previously on-site employees to full-time remote work post-COVID.3
‘Agile’, a concept from the IT space, has found its way to organisations at large. Agility is a combination of speed, ability to change, and resilience – much needed to stay relevant in today’s market. The rapid change in business variables poses a need to adapt, keep the workforce abreast and be resilient to adversities, and all this needs to be done expeditiously. We need to ‘fall fast’ (Simon Sinek) and start again.
Mobility provides much-needed exposure, making employees adaptable while keeping them au-fait with market changes, client requirements, and technological shifts – a recipe to step up the game.
In a nutshell, talent mobility is a multipronged tool for organisations that assists with business strategies, keeps pace with global trends, and helps to tap a diversified talent pool – a concoction for success.
As Saber Ben Hassen says - “Of all the books in the world, the best stories are found between the pages of a passport” - these are the success stories of businesses, individuals, and multinationals that have set foot beyond their national boundaries.
Hybrid and remote working opened up new ways to work and new recruitment channels, providing opportunities and access to new talent pools, while changes in regulations have opened up opportunities for immigration and overseas recruitment.
Watch this video as experts from Walker Morris and BDO taking the UK as a reference discuss working and recruiting from anywhere with a focus on immigration, tax and global mobility.
Indian Tiffin’s Editorial team also refers BDO in India and its associates, partners, employees, advisors and assigns
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