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Martin van Roekel took over as CEO of BDO International Limited on 1 October 2011.

CEO INSIGHTS is a forum for online conversations about the accountancy industry in general, including accountancy around the world, standards and regulation and high growth markets

Biography

Martin van Roekel is the global CEO of BDO. BDO is an international network of independent member firms that provides advisory services in 138 countries, with 54,933 people working out of 1,202 offices worldwide.  Martin is based in the Netherlands and has over 30 years’ experience in the accountancy profession.

Martin van Roekel - CEO INSIGHTS

CEO Blog/Wonderful India: realising its potential
20 December 2012
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Wonderful India: realising its potential

Last week I was in India, visiting the cities of Delhi and Mumbai.  Compared to my first visit five years ago I was pleased to see that it is as vibrant, bustling and as full of potential as ever.  It was obvious back then, and remains apparent now, that India is a country rich with opportunity and possessing an abundance of ambitious and aspirational individuals - and businesses.  As such, it remains an interesting destination for foreign investors.  India offers a very skilled workforce as well as an exponentially growing and prosperous middle class, creating a buoyant home market to supplement export opportunities.
 
These factors combined, it’s not hard to see why CFOs recently ranked India 4th in BDO’s Global Opportunities Index for foreign investment. Based on our Ambition Survey 2012, in which we interviewed over 1,000 CFOs from mid-sized companies around the world, the highest increase in revenues from 2011 to 2012 that CFOs  saw was in India.  
 
But the news this week is that India’s economic growth rate this year is the slowest it has been for a decade (5.85%).  Despite its great potential, India remains an economic underachiever.  While I was there, I couldn’t help  comparing the country with China. Why has India’s potential not been realised as rapidly as that of China? Why has it not achieved the same foreign investment success - especially in the manufacturing industry?
 
Reflecting on my visit last week, I have identified a few possible reasons. Firstly, and most obviously: the Indian infrastructure.  Delhi is admittedly more progressive than Mumbai in terms of its airports, roads and other infrastructure, but it still lags way behind its Chinese counterparts.  The monorail in Mumbai was due to be completed two years ago but it’s still under construction. It’s apparent that it will take a very long time to improve the infrastructure in India: while this remains the case we will continue to see the nation’s economic progression stifled.
 
Secondly, as we saw in the Ambition Survey responses this year, foreign investors face plenty of difficulties when entering this market.   One multi-national corporation, for example, encountered a number of tax-related issues because of discrepancies with the local authorities, while abiding by international regulations. The big challenge for the Indian political and legal authorities is to help realise individual, company and economic growth by providing protection and minimising the risks for foreign and local investors. Clearly, this is something which will take time, but for sure needs to be addressed. 
 
So, how can investors exploit the potential in India in the short term?  I believe the answer lies in local knowledge and expertise.  BDO’s experience shows that the best way to mitigate risk and successfully navigate these complex processes is to obtain tailored, trusted and actionable advice that is both grounded in local knowledge and backed by regional and global experience.  With this balance, we have helped many of our clients achieve success in this often challenging market.
 
I do believe that India remains an appealing destination for many companies.  However, if the wonderful opportunities India offers are to be converted into a strong business case for investors, it will be necessary to  improve the applicable regulations relating to business, as well as the infrastructure.  Only then will it start to see the same success as China.
 
With my best wishes for the festive season to all our followers