How to make money in India, long term

India as a consumer market of 1.1 billion people is an attractive proposition for any Commercial Enterprise. Earning even $1 from each person is worth $1.1Bn. A lot of MNCs have bought this math and entered the country, expecting to make money with their existing models. Their assumptions are flawed at 2 levels.

One, the size of the 'consuming' population is not 1.1Bn but 800mn - the remaining 300mn live below the poverty line.

Second, the GDP per capita, even on purchasing power parity is $3700 - at best 1/12th that of the US.

Given these 2 factors, the expected size of prize of a business in India is at best 1/5th of that in the US. The math is 800/(300X12) ; 300 being the population of the US.

So, in order for an enterprise to make money in India at the levels that its huge population warrants, it should focus on improving the Purchasing power of Individuals. The single biggest known way of improving people's purchasing power is to improve their skills, i.e. through education.

Hence my plea: If you want to make money in India, invest for the long term, invest in educating its population. They'll grow up to earn more, consume more and by extension, put more money back into your pockets.

Hope some corporations embrace this long term business plan. I'm sure they'll see the returns in their shareholder value.