Posts Tagged ‘India’

June 20th, 2011

Let’s talk India

In my May 17 blog post, I already brought up the Let’s Talk Asia conference, sharing my thoughts on the China presentation. But another workshop I attended, on India – also a major player in Asia – made me realize that although different, this country also offers tremendous opportunities.

So here is some useful information I picked up from the participants and especially from one entrepreneur who started doing business in India back in 2004 with an agent, then opened an office in 2007 and now, in 2010, proudly announces that 50% of his employees are based in that country. (more…)

November 18th, 2009

SMEs can now also export to China and India

For the past few years, everybody’s been talking about the huge market potential in China, its 300 million middle class consumers and phenomenal growth. It’s the same for India. However, although sourcing in China is quite popular, only a handful of Laval and Quebec firms sell their wares there.

The fact is that China and India are distant chaotic markets fraught with entry, cultural and other barriers. It’s not easy for a small Quebec company to find its niche in the Pacific Rim without getting burned by having others copy its products or not finding the right business partner.

That said, I’m starting to hear more and more cases of Laval companies landing big contracts in Asia and we’re fielding a growing number of questions about the legal, financial and other aspects of exporting to China.  It’s very exciting to see small businesses leverage their niche expertise to stand out on the international stage. On October 19, the Globe and Mail published an article on Canadian exports in its Report on Business. Click here to read it.

SYNERGX and JMF Cranes & Hoists are two examples of Laval companies that succeed in these markets. M. Menghini, President of JMF, was telling me how the Indian market is full of opportunities for his company. He is also considering hiring a full-time representative to develop this market and evaluating the possibility to develop a partnership with a local firm.

There are many similarities between doing business in the U.S., Europe and Asia. For instance, you must make sure to know your partner well, have a clear, complete and detailed contract, and maintain a close relationship with your customer. Just because the customer is far way, speaks another language and is from a different culture doesn’t mean the rules are different. You can make the process easier by learning about the country’s business practices and surrounding yourself with the right partners.

Although they were published in 2006 and 2007, the following guides from Export Development Canada are still very relevant for our companies:

October 8th, 2009

You need patience and perseverance to do business in India

On September 21, I attended a seminar organized by the Manufacturiers et exportateurs du Québec, intended to present business opportunities and the future outlook in India. Quebec Premier was on hand to announce the 2010 Quebec India mission, which will take place from January 31 to February 6, 2010.

I’d like to share with you the comments of some Quebec companies that have been successful in this market. There were testimonials from, among others, MPB Communications and EXFO (IT), SNC-Lavalin and Premier Tech (infrastructure, energy and environment), and CAE and CVTECH (aeronautics). Everyone agrees that opportunities abound in this market.

Here are two examples of successes in this complex market.

  • CAE exports to India since 1971. Initially, sales were direct. In 2004, CAE chooses to set up in the market and they went from 13 to 320 employees in 2009. To be successful in India it is important to establish good relations with government and local partners, says Mr. Marc St-Hilaire, Vice-President, Technology. In addition, business in India has allowed them to have a direct point of contact with the market
  • CVTech was approached by Tata Motors for its expertise in order to develop a continuously variable transmission (CVT) for the NANO car. Mr. Alain Charest, vice president indicated that the market potential is enormous as the government invests a lot, the English language facilitates negotiations and wages are low for skilled labour.

However, despite the abundant opportunities in India, doing business there is a challenge. First, red tape can make negotiations very slow and complicated. The country’s legal and tax system is extremely cumbersome. Consequently, we recommend taking a regional rather than a global approach. That said, bear in mind that each of the 28 States has its own particularities. You’ll find plenty of consultants ready to help you out but be aware that they don’t always have the requisite skills. Ask the Canadian authorities in India for referrals. Second, employee turnover is high: 100% every five years. Third, road, port, airport, rail and urban infrastructures are lacking. And fourth, energy demand has outstripped supply for many years with the result that power failures are common.

Other than these challenges, there also cultural differences to consider, for instance:

  • The notion of  ‘yes’ (yes in India doesn’t always mean yes);
  • The notion of time is quite different (things are done much more slowly);
  • Cell phones rule, even in business meetings (never turned off);
  • Negotiations move at a very slow pace;
  • Family and religion play an important role in Indians’ lives;
  • Caste barriers persist despite being outlawed many years ago;
  • The group takes precedence over the individual;
  • Hierarchy is very important in business, hence less room for initiative-taking.

In conclusion, opportunities abound for Quebec SMEs in India. However, before jumping in, you should carefully evaluate whether the benefits will outweigh the efforts required to develop this market.

For more information about the Indian market, I highly recommend EDC’s guide on how to do business in India and take knowledge of the following statistics:

  • India is expected to become one of the four largest economies in the world within 20 years. Its population, estimated at 1.166 billion this year, is growing at a rate of 1.6% per year.
  • About half of the population is under age 25 and highly educated. For example, the country turns out 300,000 engineering and 1,000,000 IT graduates every year.
  • India has a massive pool of qualified workers who speak English.
  • Consisting of about 300 million consumers, the middle class will make up 41% of the population by 2025 or roughly 600 million people.
  • India was less affected by the financial crisis than most other countries because of its solid banking system, robust domestic consumption (accounts for about 60% of its GDP) and the government’s prompt and aggressive monetary and fiscal response, for instance, a $500 million investment in infrastructure over the next five years.
  • There are a number of sectors with strong potential for Laval firms, such as energy/environment, infrastructures, aeronautics and IT.

If you’d like to know more about a particular sector, I invite you to post your questions on this blog.