This article is an extract from Pathfinder Business magazine.
India may often appear daunting, yet it offers infinite opportunities for doing business. ‘It’s a market of continental proportions,’ says Julian Stretch, director of the India and British partnership network. ‘There are as many differences among the states there as there are in Europe.’
So don’t imagine you’ll discover all you need to know during a four-day visit to Mumbai — India has 29 states and cultural understanding requires time, patience and dedication. If you learn that early, doors may open.
It is, says Stretch, somewhere that Britain ought to have a head start. Culture matters — and much is shared between India and the UK. English is the language of commerce and the legal systems are similar. ‘We both enjoy cricket and cups of tea,’ says Stretch, who spent most of his working life setting up businesses for Rank Xerox in the subcontinent. ‘We have an edge.’
Time spent discussing Sunil Gavaskar’s batting average over a cup of Earl Grey may help. The tide is running in favour of entrepreneurs: amid demand for expertise of almost every kind, regulations on business ownership by foreign investors are being relaxed; and tariffs on imports, which peaked at 350 per cent in 1991, have dropped to 20 per cent.
Trade missions, run through the government body UKTI, can help with contacts and the legal maze. The British High Commission has commercial departments in all the major cities. Half India’s population is under 30 and the ‘addressable market’ for businesses is expected to surge as internal migration swells the urban population from 318m to 523m. Goldman Sachs predicts India will overtake the US to be the world’s second economy after China by 2042 — this year it is expected to grow eight per cent. But much hinges on reforms to cut the fiscal deficit, promote competition and invest in infrastructure, healthcare and education.
India has attracted big financial players such as Aviva, Prudential and Standard Chartered, which has over 80 branches. And the rapidly growing middle class — estimates put it at nearly 150m — has attracted some classic British brands. Weetabix was recently launched into India’s 40 biggest cities.
The golden rule is to do market research. ‘Make sure your product will work,’ says Stretch. ‘If it’s electrical, will it stand up to power surges or failures? Will packaging stand up to Indian conditions of humidity, dust, monsoon? India is a demanding market in terms of value for money.’
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