When Narendra Modi took power as Prime Minister of India in 2014, it was on the promise of a boost to the economic wellbeing of all Indians through a program he called “Make in India.” In brief, his plan was to create jobs in twenty-five sectors of the economy through an initiative to encourage both Indian and multi-national companies to manufacture their products in India.
Which sounded great in theory, but ignored the fact that India was an incredibly difficult place to do business. One of the big reasons for this was that every Indian state had its own tax structure, and moving goods within the country was hugely expensive. However, Mr Modi has done what many observers thought impossible, imposing a nationwide goods and services tax (GST) to replace the complicated web of state-by-state tax law.
The new tax structure is scheduled to take effect on 1 July, and Deutsche Post-DHL said that it will therefore invest €250 million in India by 2020 to take advantage of the opportunities the new business climate will provide. This is in addition to the €70 million the company has invested in the country over the last year-and-a-half.
Announcing the investment plan during a trip to India last week, DP-DHL boss Frank Appel did not provide details of how the €250 million would be spent, other than to way the company planned to consolidate its distribution centers.