Take these three steps if you would like to do business in India.
You are probably aware that India has become one of the largest and fastest growing economies in the world – third when comparing purchasing power. While this upward trend started over 10 years ago, it managed to continue through the global financial crisis, and is still going relatively strong – our economics group predicts 6 per cent growth this year and closer to 6.5 per cent in 2013.
We see Canadian companies of many sizes already taking advantage of the boom. Canada’s trade data confirms this: between 2007 and 2011, exports to India rose nearly 45 per cent — to $2.6 billion.
What are exporters like you selling? Mainly, dry pea and bean products, non-metallic minerals, pulp and paper goods and aerospace parts — for now. Looking ahead, infrastructure opportunities will be huge – that’s where India forecasts it will spend $1 trillion over the next five years.
When I asked my international business colleagues, who examine and work in the market, how a larger number of small businesses can break into India, they offered three key tips:
The first step — as with any foreign market — is to understand the business needs, cultural considerations and broad regulations, in your specific sector. Take the time to review the excellent market information that is available on EDC’s website under Country Info and on the Department of Foreign Affairs and International Trade (DFAIT) website, to name a few; then you can start asking more targeted questions.
Secondly, because India is so diverse, with 2,000 ethnic groups and 17 spoken languages, it is pretty much essential that you find a local partner. This can be an agent, licensee, joint venture partner, or an Indian-Canadian in your field who has worked in India. They can all help you understand, for instance, where in the country your best customer base is likely to be and what are the trade and tax implications. Canada’s Trade Commissioner Service and the Canada-India Business Council are great resources to find reliable partners.
Third of all, Indians place high value on face-to-face relationships. The use of email, for example, is less common in India than in North America. So you will need to invest time in the country to develop key personal relationships, and to learn important aspects of the market for yourself.
Once you are ready to do business in India, it is worthwhile to let us know. EDC, with representatives in Mumbai and New Delhi, has relationships and influence with many key companies in India, and we may be able to introduce you to firms in your sector that are looking for particular supplies and services.
Visit www.edc.ca for more small business solutions.
EDC is Canada’s export credit agency, offering innovative commercial solutions to help Canadian exporters and investors expand their international business. EDC’s knowledge and partnerships are used by more than 7,700 Canadian companies and their global customers in up to 200 markets worldwide each year. EDC is financially self-sustaining and a recognized leader in financial reporting and economic analysis.
This column is a compilation of publicly available information and is not intended to provide specific advice and should not be relied on as such. No action or decisions should be taken without independent research and professional advice. While EDC makes reasonable commercial efforts to ensure that the information contained in this column is accurate at the time it is issued and placed on EDC’s website, EDC does not represent or warrant the accurateness, timeliness or completeness of the information contained in the column. EDC is not liable whatsoever for any loss or damage caused by or resulting from any inaccuracies, errors or omissions in such information.