Assessing Your Company’s
Readiness for India
Marvin Hough, Telfer School of Management
Montreal - Oct 25, 2012
Information contained within this package is proprietary and confidential
My Experience
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B. Comm – MBA – University of Alberta
AIESEC Traineeships – Denmark, Belgium
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EDC Career – 30 years – Assignments in Credits Insurance, Financing, Risk
Analysis, National Business Development and International Business
Development
- Business Development in Canada - Ottawa, Toronto and Vancouver
- International Business Development assignments:
India ( DFAIT assignment),
China –( establishment of EDC’s first representation )
Mexico ( EDC Chief Rep)
Regional Vice President, IBD for both Asia Pacific and Latin America
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Telfer School of Management – 2008 - Present
EMBA/Undergrad Teaching and EMBA International Consulting Trips ( China,
South Africa, Brazil)
Executive Programs – India Forum, Focus India Program
Information contained within this package is proprietary and confidential
India’s Growth on the World Stage
2002
GDP USD trillion
14
12
60
China
50
US
10
2050
GDP USD trillion
US
40
8
6
4
2
0
30
Japan
20
Germany
China
India
Brazil
Russia
0
10
Italy
20
Russia
10
UK
France
30
India
Brazil
0
40
50
0
Germany
Italy
20
GDP per capita 000 USD
Source: Goldman Sachs Economic Paper # 99; BCG analysis
Slide Source: Alan Rosling of Tata Sons
Information contained within this package is proprietary and confidential
40
UK
Japan
France
60
80
100
GDP per capita 000 USD
Bubble size corresponds to GDP size
Canada Needs to Focus on India
• As a partner in the global knowledge economy
Indian objective to obtain access to proprietary S&T
• As a collaborator in infrastructure development
Indian objective to invest heavily in domestic
infrastructure investment over the next 10 years
• As a market for Canadian commodities & value added products and
services
Indian objective to obtain long-term access to natural resources and
energy security
• As an investor and receiver of investment
• As an outsourcing center and link to global supply chains
Information contained within this package is proprietary and confidential
Canadas Trade Strategy for India
• Achieve the signing of the Comprehensive Economic Partnership
Agreement
• Increase bilateral trade to $ 15 billion within 5 years
• Increase investment flows, focusing on Infrastructure and Capital
Projects, Science and Technology, Energy and Education
• Make Canada an attractive trading partner and establish a “ Canada
Brand”
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Double Indian students in Canada within 5 years
• Continue to promote Canada as a science and technology partner
• Expand multilateral engagement with India in forums such as the WTO
and G 20
Information contained within this package is proprietary and confidential
Canada – India Bilateral Trade
Most Promising Business
Sectors:
– Agriculture, Food and
Beverages
– Service Industries and
Capital Projects
– Information and
Communication Technology
(ICT)
– Oil and Gas Equipment and
Services
– Electric Power Equipment
and Services
– Aerospace and Defence
Canada's Trade with India
2500
Millions of CAD$
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2000
1500
Exports
Imports
1000
500
0
2007
2008
2009
2010
Source: Global Commerce Strategy and DFAIT Office of the Chief Economist, based on
statistics from Statistics Canada
Information contained within this package is proprietary and confidential
Indian Business Environment
Accelerators
Decelerators
• English language
• Inadequate Infrastructure
• Liberalization and market reforms
• Distance to market
• Strong private sector
• Knowledge barriers
• Intellectual Power and Innovation
• Price sensitivity – buyer’s market
 Cost-competitiveness of labor for
services
• Up-front cost to develop relationships
 Cost of operations
• Red tape ( India ranks 122 out of 181
countries in ease of doing business)
 Common law legal system
• Onerous labour regulation
 Developed banking sector &
capital markets
• Bureaucracy and corruption in public
sector
 Offshore outsourcing center
• High tariffs, non-tariff barriers, custom
processing delays
 Increasingly attractive foreign
investment destination
 Increased integration into the
global economy
• Tax rates and regulations
• Security Issues
* As per Price Water House Coopers (2003)
Information contained within this package is proprietary and confidential
India - What are the challenges?
Information contained within this package is proprietary and confidential
Business Culture
Time as rigid and exact
Time as soft and elastic
Focused, concentration on Task
Subject to distractions, interruptions
Sequence talking, turn taking
Overlap talk
Achieved Status
Ascribed Status
Earned Accomplishment
Special privilege
Shared Authority
Clear Authority figures
Consultation and Teamwork
Direction and Relationships
Tradition is interesting
Tradition is critical and valued
Information contained within this package is proprietary and confidential
World Bank Report Sub-national Doing Business in
India Report 2009
7 topics measured in India:
Starting a business
Dealing with construction permits
Registering property
Enforcing contracts
Trading across borders
Paying taxes
Closing a business
Data were collected with the help of
280 private sector contributors and
230 public sector officials
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Information contained within this package is proprietary and confidential
Doing Business in India – Where is it easiest?
Rank
Rank
City, State
1
Ludhiana, Punjab (easiest)
10
Mumbai, Maharashtra
2
Hyderabad, Andhra Pradesh
11
Indore, Madhya Pradesh
3
Bhubaneshwar, Orissa
12
Noida, Uttar Pradesh
4
Gurgaon, Haryana
13
Bengaluru, Karnataka
5
Ahmedabad, Gujarat
14
Patna, Bihar
6
New Delhi, Delhi
15
Chennai, Tamil Nadu
7
Jaipur, Rajasthan
16
Kochi, Kerala
8
Guwahati, Assam
17
Kolkata, West Bengal
9
Ranchi, Jharkhand
Source : Doing Business database.
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Information contained within this package is proprietary and confidential
The Need for Innovative Thinking
$2500.00
$35.00
Information contained within this package is proprietary and confidential
Top 10 - Considerations for Doing Business in India
1. Local presence is very important - To help you through the challenges
including getting through the significant number of government permits
and licenses – even now after liberalization.
2. A strong relationship network is key – Relationships are important to
verify information, understand government policies, identify tomorrow’s
opportunities, resolve issues
3. Timelines – Understand that things just take longer to transact even if
approvals are in place. Indians act on their own time schedule.
4. Scope of the market – The sheer size and enormity of India’s social
challenges should not deter you.
5. Willingness to provide technology and knowledge transfer will increase
your attractiveness as a business partner.
Information contained within this package is proprietary and confidential
Top 10 - Considerations for Doing Business in India
6. Important to be mindful of local sensitivities (e.g. religion, caste, and
Indian pride - Indians do not like to be spoken down to by the West)
7. Power/Infrastructure bottlenecks – Pay special attention to ensuring
that you have reliable sources of power and back-up plans
8. Corruption remains an issue that can slow down approval processes
9. Labor issues can be a serious challenge
10. Competition is already tough – Remember that India has a very
competitive offering including from domestic suppliers in most sectors of
the economy
Information contained within this package is proprietary and confidential
Tactics - Doing Business in India
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Focus on Indian culture and draw on cultural training and the
Indo-Canadian community in Canada. Realize that in Indian culture
face to face meetings are crucial in developing long term business
relationships and trust.
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No decision can be more important than the selection of your local
partner(s)/agent(s) – due diligence is critical – make sure claims
are checked out. Don’t assume that one agent can be effective on a
national basis.
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Western concepts and off-the-shelf solutions do not work in
India, targeted and client specific proposals and solutions do.
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Be particularly mindful of pricing considerations and realize that
Indians are very price conscious – know what your competitors are
offering and their approach to pricing
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Doing business with the public and private sectors need different
approaches. Developing a proposal for the public sector requires
careful consideration of specifications, local content requirements, the
approval process etc. Multi-point lobbying often required
Information contained within this package is proprietary and confidential
Tactics - Doing Business in India
• Show the commitment of your CEO to India, the proposal and your
counterpart and realize that the decision making process is usually very
hierarchical
• Prepare your proposal to meet local challenges and marketing
needs. Price, quality and the overall advantages of your product over the
present products in the markets should be part of your project proposal.
• Leverage relationships of others including Canadian agencies and
associations, Indo-Canadian community – eg EDC relationships
• Training and Transfer of Technology will be important parts of a
business proposal and should be carefully considered and appropriately
highlighted.
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Be mindful of the potential to work with your buyer or partner on other
projects and that “relationships” are broader than transactions.
Information contained within this package is proprietary and confidential
Negotiation
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People may tell you what you want to hear. Don’t assume a smiling face
means acceptance. Stress your common aims
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Indians are inclined to say yes to anything ( It’s up to you to figure out if they
can actually deliver on their promises)
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The most senior person will make the decisions. If he is not at the meeting,
you are at the early stage of negotiation.
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Don’t lose your temper as that means you lose face and are seen as
untrustworthy.
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Concessions are expected in price and terms. Expect them in return.
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Politeness, praise and respect are important
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Don't assume anything - find ways of checking progress without causing the
other party to 'lose face'.
Information contained within this package is proprietary and confidential
India Readiness Assessment
• Management Commitment/ India Champion
• Researched the Opportunity and Completed the Environmental and
Target Market Scan
• Consulted with key specialists in Canada and India – Trade
Commissioners, EDC, Legal and Tax experts, Financing, Consultants
• Financial Commitment for Market Research and Travel next 2 – 3 years
• Indian Cultural Training or Exposure
Information contained within this package is proprietary and confidential
India Readiness Assessment
• Completed Skills Audit – including India cultural and market expertise
• Plan for securing and maintaining local agent, distributor or partner
• Decided on degree of technology transfer
• Risk Management Strategy – including credit risks, political risks, security
risks
• Draft India Business Plan
Information contained within this package is proprietary and confidential
Drafting the Business Plan
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Table of Contents
Executive Summary
Corporate Profile and Nature of the Business
Management and Human Resources
Environmental and Target Market Scan
Market Entry and Marketing Strategy
Operations Overview
Financial and Risk Management Strategy
India Readiness Assessment
Conclusion and Recommendation
Bibliography
Appendices
Information contained within this package is proprietary and confidential
TFIP Environmental and Target Market Scan
Environmental Scan
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7.
8.
Target Market Scan
Market Size, Composition and Growth
Political Characteristics and Stability
Cultural and Linguistic Issues
Government Policies Affecting
Business
Legal Issues
Costs and Resource Availability
Commercial Infrastructure
Geographic Factors
1. Customer Profiles: wealth and ability
to pay
2. Product /Service Fit with Customer
Preferences
3. Strength of Demand for
Product/Service
4. Competitive Barriers to Entry
Information contained within this package is proprietary and confidential
Sources – Canadian Government Sites
• Department of Foreign Affairs and International Trade
www.tradecommissioner.gc.ca
• Export Development Canada www.edc.ca
• Industry Canada www.ic.gc.ca
• Canadian Commercial Corporation www.ccc.ca
• Canadian International Development Agency www.acdi-cida.gc.ca
• Business Development Bank of Canada www.bdc.ca
• Statistics Canada www.statcan.ca
• Trade Team Canada www.exportsource.ca
Information contained within this package is proprietary and confidential
DFAIT – www.tradecommissioner.gc.ca
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Select - Country Info –Market Reports, Asia Pacific, India
Aerospace Sector Profile - India 2011/01/04
Defence and Security Sector Profile - India 2011/01/04
Agriculture, Food and Beverage Sector Profile - India 2011/01/05
Automotive Sector Profile - India 2010/12/29
Life Sciences Sector Profile - India 2010/12/30
The International Education Market in India 2012/06/04
Studying in Canada - Frequently Asked Questions and Answers from the High Commission of Canada,
New Delhi 2011/11/02
Guidance on the Submission of Study Permit Applications 2011/10/25
Canadian Universities: Generating Science and Technology Opportunities with Indian Companies and
Universities 2011/10/12
Education Sector Profile - India 2010/12/30
Electric Power Equipment and Services Sector Profile - India 2011/01/04
Environmental Industries Sector Profile - Inde 2010/12/15
Life Sciences Sector Profile - India 2010/12/30
Information and Communications Technologies - Software and Services Sector Profile - India 2011/01/04
Telecommunication Sector Profile - India 2011/01/04
Metals, Minerals and Related Equipment, Services and Technology Sector Profile - India 2010/12/30
Oil & Gas Equipment & Services Sector Profile - India 2010/12/28
Transport Infrastructure Sector Profile - India 2011/01/04
Financial Services Market Sector Profile - India 2010/12/29
Information contained within this package is proprietary and confidential
Canadian Representation in India
High Commission,
New Delhi
Consulate
General,
Chandigarh
Trade Office,
Kolkata
Trade Office
in
Ahmedabad
Consulate
General,
Mumbai
Trade Office,
Hyderabad
Trade Office,
Bangalore
Consulate,
Chennai
24
Information contained within this package is proprietary and confidential
Sources – Canadian Trade Associations
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Canada-India Business Council www.canada-indiabusiness.ca
Indo-Canada Ottawa Business Chamber www.icobc.org
Indo-Canadian Chamber of Commerce www.iccc.org
Canadian Society of Customs Brokers www.cscb.ca
Canadian Chamber of Commerce www.chamber.ca
Canadian Manufacturers and Exporters ( CME) www.cme-mec.ca
Canadian Association of Importers and Exporters www.importers.ca or
www.caie.ca
• Canadian International Freight Forwarders Association www.ciffa.com
• Asia Pacific Foundation of Canada www.asiapacific.ca
Information contained within this package is proprietary and confidential
Sources – Indian Government Sites
• High Commission of India, Ottawa www.hciottawa.ca
• Directory of official Indian Government websites www.goidirectory.nic.in
• The Directorate General of Commercial Intelligence and Statistics
www.dgciskol.nic.in
• Directorate General of Foreign Trade www.dgft.delhi.nic.in
• India Brand Equity Foundation (IBEF) www.ibef.org
• India Finance and Investment Guide www.finance.indiamart.com
• Ministry of Commerce and Industry – www.commerce.nic.in
Information contained within this package is proprietary and confidential
Sources – Indian Trade Associations
• Federation of Indian Chambers of Commerce and Industry
www.ficci.com
• All India Association of Industries www.aiaionline.org
• Associated Chambers of Commerce and Industry of India
www.assocham.org
• Confederation of Indian Industry www.ciionline.org
Information contained within this package is proprietary and confidential
Sources – International Organizations
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Dun and Bradstreet www.dnb.com
International Monetary Fund www.imf.org
Economist Intelligence Unit www.eiu.com
International Chamber of Commerce – www.iccwbo.org
Multilateral Investment Guarantee Agency ( MIGA) www.miga.org
OECD www.oecd.org
CIA – www.cia.gov
World Bank www.worldbank.org
World Trade Centres www.wtca.org
Information contained within this package is proprietary and confidential
Telfer Focus India Online Program
The Telfer Focus India Online Program is a
comprehensive web-based program for business
executives offered by the Telfer School of
Management at the University of Ottawa. It is
comprised of three parts: Session 1 provides an
introduction to business opportunities and
challenges in India; Session 2 offers a
comprehensive review of business intelligence and
guidance on key aspects of doing business in India
and Session 3 engages you in developing a
Strategic Business Plan with advice and feedback
from the program experts
hough@telfer.uottawa.ca
Information contained within this package is proprietary and confidential
National Capital India Forum – Feb 21/2013
“Adapting your Business to India”
The Telfer School of Management at the University of
Ottawa and the Sprott School of Business at Carleton
University in collaboration with Sponsoring Organizations
presents the 2013 National Capital India Forum. Topics of
the Conference will include:
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The current economic and political situation in India and
the implications for Canadian companies.
The state of Indo-Canadian commercial relations and the
significance of the proposed Comprehensive Economic
Partnership Agreement (CEPA).
The need for adapting your Business Plan and approach
to India from the perspective of the 4 P’s -product, price,
promotion and place.
Who can help Canadian firms succeed in the Indian
market.
For more information contact:
(613) 562-5800 ext 2396
nationalcapitalindiaforum@telfer.uOttawa.ca
Information contained within this package is proprietary and confidential
Are you ready for India?
Marine Drive, Mumbai, India
Information contained within this package is proprietary and confidential