A trade mission from the United States is in India to explore the potential of a market where a buoyant economy and a growing middle class have American companies looking to take advantage of a huge business opportunity.
Representatives from 15 U.S. companies visited the financial hub, Mumbai and the southern IT hub, Hyderabad before coming to New Delhi to scout for franchise partners for their businesses.
They include popular food chains like Denny’s, Wendy’s, Pollo Tropical and Johnny Rockets as well as electronics retailer RadioShack and Wonderworks amusement parks.
The companies are here as part of the first-ever franchising trade mission from the U.S. to India.
The U.S. Assistant Secretary of Commerce for Manufacturing and Services, Nicole Y. Lamb-Hale, who is leading the mission, says India is ready for a boom in franchising . The franchise market in India is estimated at $3.3 billion and growing at about 30 percent annually.
Lamb-Hale says besides providing new opportunities for American businesses, the entry of new U.S. companies will also benefit local businessmen.
"The thing that is really nice about it is that it is great for Indian entrepreneurs, because they have a proven business concept, they can benefit from technology transfer and best practices, and have their own businesses and adapt it to the Indian market, so it is really a nice win-win situation to create jobs here and create jobs in the U.S.," she said.
The growing economy has given India's middle class more disposable income to spend on services, entertainment and food. To tap the potential of this growing market in a country of 1.2 billion people, some companies, like Denny’s Corporation, plan to begin operations as early as next year.
Lamb-Hale is also talking to Indian officials about easing foreign investment restrictions. At the moment India caps foreign investment in single brand retail at 51 percent, and bars foreign ownership in multi-brand retail. Washington has also been urging New Delhi to relax investment restrictions in the insurance sector.
Lamb-Hale says such restrictions can be restrictive for some businesses, but is optimistic about some changes.
"Each company is going to have its own perspective, but certainly investment caps like that may make the market for some businesses less attractive, and I think the government of India has expressed a willingness to listen to that and I think in some areas some easing may come about," she said.
American officials say relaxing foreign investment restrictions will give fresh momentum to bilateral trade, which is about $48 billion. The trade mission in India is part of a U.S. government initiative to double exports in five years and create jobs in the U.S.