NEW DELHI, March 4: Call it a second wave from across the Atlantic. A fresh crop of US companies is hitting India with a vengeance. Whether it’s consulting major Bain, internet biggie Google, the second rung FMCG major Church & Dwight, or, for that matter, mattress manufacturer, King Koil. American firms who missed the first wave are lining up to enter India. Look beyond manufacturing. There’s more noise in services such as retail, IT, and online advertising.

Several more are finalizing plans to land on the Indian shores, if we go by FIPB applications. Interestingly, if the first lot of American corporations who entered India were made of Fortune 500 companies, the new wave is bringing the lot from amongst the Fortune 2000 companies, who choose to play the waiting game.

“The American companies are looking at globalizing much more aggressively. Most of them have had a period of sustained profitability, and have the financial strength to invest in growing markets.

And with the environment in India becoming increasingly business friendly, the transition is much easier for companies now,” says Ashish J. Singh, managing director of Bain India. It’s an opportunity that the likes of American Safety Razor, and Kraft Foods wouldn’t want to pass up.

Then there’s always the clutch of US IT firms, which continue to look towards India. Recently, firms ExtraQuest, Bright Star and EscrowTech made known their interest in India — though some are big, most of them are niche players. Now service players are keen to tap the Indian market.

Services account for 52 per cent of India’s GDP against 35 per cent two decades back. This sector is a lucrative market and is growing at around 10 per cent. It holds a huge opportunity that nobody wants to miss out on. According to Chaitanya Khurana, general manager, Cornerstone, the company did research on growth in the Asian context and found that India and China offered great potential.

“There is great value addition in starting up India operations now as we can service the global clients in India and Indian companies going abroad,” he said.

Analysts believe the newcomers and those who are waiting in the wings are being drawn by the success stories of established American companies in India. They have managed to crack open the market and are reaping the rewards of patience now.

And it’s well understood that the market is going to get even more lucrative with GDP growing estimated at eight per cent, and per capita income rising.

There’s another attraction at work: about 70 per cent of India’s citizens is less than 36 years old. Moreover, the country is home to 20 per cent of the world’s population under the age of 24.

Already among the top-10, India’s consumer market has the potential to touch $40 billion by 2010, studies say. It’s a market that will only get juicier, as sectors like retail open up, and players like Wal-Mart are given a ticket to ride in. And new set of companies see this country as the road to fast growth.

EXCISE DUTY ON CARS: Global car majors like Ford, General Motors, Toyota and others are not too happy with the recent budgetary move by the Indian government to reduce excise duty on small cars (up to 4,000mm in length, with engine capacity up to 1,200cc for petrol cars and 1,500cc for diesel) to 16 per cent from 24 per cent, as it throws their growth plans in India out of gear. The policy decision of the government is seen as being detrimental to building a globally competitive India.

Car manufacturers indicate that this excise reduction has sent some confusing signals. Over the last 7-8 years, excise slabs on cars have been coming down progressively from a peak of 40 per cent. Manufacturers are wondering if this current reduction is a one year episode or a long-term decision.

The Indian government has stated that the tax reduction is in line with India’s strategy to become an export hub for small and fuel efficient cars. —By Arrangement With Times of India