Having research and development centers in India also allows companies to localize their existing products to fit the target demographic. For tech companies, those are people who are newly acquainted with technology and are connecting to the internet for the first time.
Analysts have argued that localization of products and services in emerging markets like India is key to success for multinationals.
Ashutosh Sharma, a research director and vice president at Forrester, told CNBC that, when it comes to the Indian market, there are some similarities to the West on the surface: an English-speaking, younger demographic with growing disposable income.
But beyond that, it’s a lot more complicated. “When you scratch the surface, there’s a lot of issues with respect to the digital population in India,” he said. “First of all, the awareness level beyond using their mobile phones for (social media) is non-existent.”
Sharma also pointed out that language is an issue in a country with more than a dozen main languages and hundreds of dialects. In fact, beyond the major cities, few people interact in English. Moreover, the disposable income in India’s smaller cities and rural areas is low.
“So people are very careful about the way they spend money. There’s not that much money to go around with respect to the income level,” said Sharma.
But the Indian government has expressed well-documented interest in promoting digital literacy and technological advancements throughout the country. On a national level, that includes Prime Minister Narendra Modi’s “Digital India” campaign to improve online infrastructure and services, the rolling out of a national identification system, and the newly passed goods and services legislation that requires businesses to file their tax returns online.