Project part-financed by the European Union
India is moving on to the international business agenda of more and more UK companies - and quite rightly too. It is headed to becoming one of the world’s most important markets. And one of continental proportions!
Today’s India is a far cry from the licensed “raj” that typified it until the early 1990’s. It has deregulated, demolished its harsh import licensing regime and as part of a continuing process allows full foreign ownership in a growing number of sectors. It welcomes foreign goods, technology and investment. Its currency - the rupee - has been convertible on trade account for many years. The economy, underpinned by a booming private sector and a rapidly growing consumer class, is growing around the 8% mark.
There is a strong cultural heritage between our two countries and we have much in common - including a love of cricket! English is the language of commerce and our legal systems are substantially the same. Indeed the way we go about our daily work is very similar. We therefore feel very much at home as we visit and do business in India.
And it doesn’t stop at just doing business in India. An increasing number of UK companies are finding that the economics of a base or a partnership in India enables them to access third country markets that they might otherwise have eluded them.
But whilst India has changed, it still remains bureaucratic and its infrastructure leaves a lot to be desired - to put it mildly! The environment can be demanding and Indian businessmen are amongst the world’s smartest negotiators. It takes time and patience to do business - often longer than the initial forecast. But the rewards can be considerable and remember this is a market of continental proportions and one that is growing rapidly.
So how do you prepare to do business in India?
Well - and much of this is self evident - the first thing to do is to satisfy yourself that there is a market for your product or service. India is one of the most price competitive markets in the world, so try to do some research on competitive local pricing. And will your product stand up to Indian conditions - heat, damp, dust, electrical fluctuations and so? How about your packaging - will it stand up to India’s transport conditions? The Indian market place is vast and whilst some parts are growing fast, others are not growing at all. So where in India should you be looking to do business? Who with and why?
There is help in coming to terms with all this all this from UK Trade & Investment (UKTI) where a variety of services are available to help you including market information reports, lists of potential agents, distributors, partners and so on. UKTI also arranges and financially supports trade missions to the big cities of India. These often take in a major industry specific exhibition which can be a great way to make a first visit to this market.
Further details of UKTI services and local contacts are on www.uktradeinvest.gov.uk . The India country pages on that site contain useful summaries of all India’s major industrial and commercial sectors. Your local contacts for international trade can be contacted at www.tradeyorkshire.com
First time visitors are often shocked by the contrasts that greet them. The journey from most airports includes sights of abject poverty to immense wealth and amongst the world’s most congested roads. India is a country of huge contrasts and nothing can prepare the first time visitor for them.
Plan your visit carefully. And don’t forget you will need a visit visa. You can download the application from www.hcilondon.net Try to be sure you are meeting the decision makers in the companies you want to visit - not always as easy as it sounds. Check whether there are any national or local holidays during your visit and be sure to leave enough time between meetings to get from one to the other. Crossing some of India’s big cities can literally take hours. Taxis are safe but can and do get lost. Better to ask for a hotel car. There is a wide range of hotel accommodation in India including some of the world’s best. The big travel season is October to March and during this time hotels are often fully booked. So book your hotels as soon as you can - and ask the hotel to arrange to meet you at the airport as you arrive. That can save a lot of hassle. Internal air travel is good and plentiful. Overnight trains are fun and show you parts of India you would not otherwise see.
India is a relationship based society. And business is very much about relationships. These take time to build - and to maintain. But they are hugely important. Often it is the quality of the relationship rather than the provisions of agreements that will resolve disagreements or disputes. So be sure you have the time and capacity for this - and are sending the right people to India with seniority and authority. First meetings may be all about relationship building rather than discussing business. The decision making process can take several meetings and involve several people. And often bureaucracy rears its head to delay and occasionally prevent decisions.
Connections are important too. One of the benefits of going on a UKTI sponsored trade mission is that the British High Commission can often useits connections to get you to see people you might otherwise have to wait ages to see. Connections are the fast track to decision makers.
Entering the Indian market successfully generally takes longer - and therefore costs more - than most companies originally estimate. Surprises and delays seem to pop out of the wood work. So gain and maintain top management commitment to your market entry strategies. It helps to have an Indian “champion” in the board room - all the better if it is the chief executive.
Age and “keeping face” are important factors to remember. Age demands respect and in many companies is part of the hierarchy. Forms of address vary widely from “Sir” and “Madam” through to first names from the very first meeting. Some of India’s older companies have a formal style and others, particularly in the newer industries such as IT, are informal in both their style and dress codes. The fear of losing face or the presence of seniors restricts some from contributing to a discussion. The good and much used “no problem” can often mean quite the opposite. Drawing out comment or explanation can sometimes be tough but invariably is worth it. The secret perhaps is always to ask open questions.
Once back from the visit to India stay in touch and follow up. You may well have left India thinking you were the proverbial answer to the maiden’s prayer but out of sight is also out of mind. So you will almost certainly have to chase the promised actions.
Above all though, enjoy India.
Photo Credits: Karthik Raja at www.pbase.com/yardbird.
