‘India, a lucrative market despite GST’
Mark Vale, President of High Growth and Emerging Markets, UPS, talks about the opportunities and challenges in the emerging markets and where the Indian market stands for the group.
Why has UPS chosen emerging economies to develop its business?
The global economic landscape is shifting. According to PWC, the gap between China, India and the US, the three biggest economies, and the rest of the world will widen over the next few decades. India could have the potential to just overtake the US as the world’s second largest economy by 2050 in PPP terms. We have spent the last four years building a network to connect the world through different resources and operations. Despite getting strong opportunities in Europe and US, we are keen to continue expanding our business in emerging economies because the “Emerging 7” countries like India, Indonesia, China, Turkey and others represent important high growth opportunities for UPS. The world is changing, more and more trade is going South, goods are coming out of Far East into Africa through Middle East and India is supplying heavily to western Europe and US. We position UPS as a trade enabler for India. We’re making ourselves more visible for companies in the global network. Investing two billion dollars in European infrastructure gives us the ability to take Indian small and medium size companies and give them good services into key markets which are Europe and US. The transformation is being witnessed in these E7 countries.
How has the Indian market evolved for the company?
With GST, many opportunities are present in the Indian market. UPS’s latest integrated facility in Hyderabad is another step to support local business and SMEs and offer integrated services for small package, supply chain solutions and contract logistics for faster and more efficient access to international markets. Initiatives like 100 smart cities and ‘Make in India’ attract global brands like UPS to invest in the country.
What kind of challenges are you facing?
Challenges are everywhere but in emerging countries one of the key things we look into is investment in infrastructure for smooth movement of goods flows. In India, the government is doing great to position the country on a par with the international standards and continues to grow fast. Secondly, there are many different markets and we have to sit down and focus where we should invest our capital. Clearly, UPS has made a decision to invest more heavily on high-growth markets to grow more quickly and be more connected with the needs of government, local customs and customers. India is definitely one of them. There are so many positive things going on in India presently. The government is trying to move for a change with steps like GST and demonetisation. Although it was a tough decision, these steps are expected be very beneficial in the long run for the Indian economy. And, moreover, developing a talented and competent workforce is another challenge but things are improving.
We position UPS as a trade enabler for India. We’re making ourselves more visible for companies in the global network