opportunities challenges in the indian market
TRANSCRIPT
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Opportunities & Challengesin the Indian Market:Lessons learned from Dutch Companies in India
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I2 I Doing business in India
//
INDIA
Facts & Figures
source: CIA factsheet
//POLITICAL
Ocial name:Republic of India;Bharat Ganrajya
Independence15th August 1947 (fromBritish colonial rule)
//GEOGRAPHY
Religion:Hindu 80.5%,Muslim 13.4%, Christian2.3%, Sikh 1.9%, Others1.8%, Unspecifed 0.1%(2001 census)
Literacy: 61%Male: 73,4%; Female: 47,8%(2001 census)
Location:Southern Asia, borderingthe Arabian Sea and theBay of Bengal, betweenBurma and Pakistan withNepal, China and Bhutan inthe north
Population:1,220,800,359(July 2013 est.)Growth:1.28%(2013 est.)
Area:Total: 3,287,263 sq km
Languages:English(business), Hindi 41%, Bengali8.1%, Telugu 7.2%, Marathi7%, Tamil 5.9%, Urdu 5%,Gujarati 4.5%, Kannada 3.7%,Malayalam 3.2%, Oriya 3.2%,Punjabi 2.8%, Assamese 1.3%,Maithili 1.2%, Others 5.9%
Urbanization:Urban population:30% (2010); rate ofurbanization: 2.4% annualrate of change(2010-15 est.)
Import: $500.4 billion(2012 est.); Commodities:Crude Oil, Precious Stones,Machinery, Fertilizer, Ironand Steel, Chemicals.
Composition per sector:Agriculture: 17.4%,Industry: 26.1%,Services: 56.5%(2012 est.)
//ECONOMY
GDP (PPP):$4.761 trillion (2012 est.)
Current account balance:-$80.15 billion(2012 est.)
FDI Investments:US$ 27,3 billion (2012)
GDP/Capita (PPP):$3,900 (2012 est.)Growth:4,7%(13 14, Worldbank est.)
Export partners: UAE12.3%, US 12.7%, China 5%,Singapore 5%, Hong Kong4.1% (2012)
Import partners:China11%, UAE 7.7%, Saudi Arabia6.7%, US 4.9%, Switzerland5.9% (2012)
Export:$298.4 billion(2012 est.); Commodities:Petroleum Products,Precious Stones, Machinery,Iron and Steel, Chemicals,Vehicles, Apparel.
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I3 IDoing business in India
//
Contents
Introduction ..........................................................................04
India: An Overview ................................................................06
Case Studies ..................................................................08-23
Rijk Zwaan India Pvt. Ltd...................................................................................................... 8
NTL Lemnis India Pvt. Ltd. ..................................................................................................10
Q.I. Press Controls India Pvt. Ltd. .......................................................................................12
Metaex Doors India Pvt. Ltd..............................................................................................14
CoMakeIT Software Pvt. Ltd.................................................................................................16
THEY India ...........................................................................................................................18
Danieli Corus India Pvt. Ltd.................................................................................................20
Incotec India Pvt. Ltd...........................................................................................................22
India Business Advice ............................................................24
Conclusion .............................................................................29
Doing Business in India .........................................................30
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I4 I Doing business in India
//Int
roduction
The Indian market has immense
potential and lots to oer to
entrepreneurs in The Netherlands. The
second most populous country in the world
is undergoing a transition, both in terms of
investor perceptions of its market potential,
and in reality. The Indian economy is
registering around 6% growth amid uncertain
global economic conditions. The number of
people in the Indian middle class is set to
treble over the next 15 years, implying a
signicant impact on disposable income.
Domestic demand is expected to grow at a
compound rate of 9.2% per year between
2010 and 2030, creating opportunities for
many industries.
Indias economic liberalization began in the
early 1990s and has accelerated ever since.
More and more sectors are being opened up
for foreign direct investment. Recently, the
Indian Government decided to open up the
multi-brand retail sector as well. This will
create huge opportunities for Indian and
foreign companies and consultants involved
in agriculture, retail and infrastructure in the
cold chain logistics sector.
Attracted to these ever growing
opportunities, many companies have already
come and are expanding their business in
India. Indian companies themselves have
become more and more active in the world
market as well, through acquisitions of
foreign companies to leverage them to
develop their own business at home or as an
entry point for the lucrative markets they are
targeting abroad.
In that sense, the country is no longer only
an emerging market for foreign investments
but has become a signicant player in the
world economy itself.
Its not only market opportunity that attracts
companies. India is known for its highly
skilled labor force which speaks English and
is well informed about western culture and
society. Which is why many western
companies transfer parts of their activities to
India and more and more western
multinational companies are setting up their
R&D facilities in India to benet from the
abundance of young and highly educated
professionals. Being centrally located in
South Asia, India enjoys an advantageous
position for doing trade with other South
Asian countries, Australia and the countries
of Africa, the Middle East and the Far East.
Combined with the huge domestic market
and the pool of well-educated young people,
India might very well function as a hub for
business activities all around the region.
But, its not always easy to be successful in
the Indian market. Particularly for rst time
investors, it is hard to fully understand the
process of investing or prospecting business
opportunities in India. These diculties may
lie in the fact that the Indian market is large
and yet as complex as many small markets,
The Indian market has immense potential
and lots to oer to the entrepreneurs in
The Netherlands.
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I5 IDoing business in India
//Int
roduction
the business culture might be dicult to
understand and dealing with several lengthy
procedures and complicated regulations can be
tough for foreign companies.
But there are a number of success stories to be
told of Netherlands based companies with
growing and protable businesses in India.
These stories are interesting for newcomers.
They can reveal some insights into how they
managed to set up their business, the problems
they faced and how they succeeded in
overcoming them. These stories will tell you that
sustaining success in India requires a long-term
approach and a reasonable threshold of
enterprise size and investment levels. But most
importantly, remember: to be patient, adapt and
it will pay o in the long run.
In this light, it is with pleasure that I introduce
this booklet with appealing and substantive
examples of eight Dutch companies from
diverse sectors which have not only
established a strong foothold in the Indian
market but have also had a satisfactory
business performance. These include (in
alphabetical order) CoMakeIT Software Pvt.
Ltd., Danieli Corus India Pvt. Ltd., Incotec India
Pvt. Ltd., Metaex Doors India Pvt. Ltd., NTL
Lemnis India Pvt. Ltd., Q.I. Press Controls India
Pvt. Ltd., Rijk Zwaan India Pvt. Ltd. and THEY
India.
The booklet oers you insights on their
strategies and best practices towards
overcoming specic challenges during their
India journey. Apart from that, the booklet also
provides a useful checklist of India Business
Advice, which can serve as a guide for your rst
steps in the market. If you need more
information or if you want to seek support, you
can refer to our doing business section (zaken
doen) on our website: www.hollandinindia.org
I hope this booklet will turn out to be a useful
tool in setting up your business or expanding
into India. And of course, The Netherlands Trade
Network in India, with oces in New Delhi,
Mumbai, Chennai, Hyderabad and Ahmedabad,
is at your service and looks forward to assist you
in your quest on the Indian market.
Alphonsus Stoelinga
Ambassador
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I6 I Doing business in India
Located in South Asia, India supports over 16% of the worlds
population and around 2.4% of the worlds land. It is the conuence
of many religions and ethnicities, which has shaped the countrys
diverse culture.
India's Real GDP growth (in percent)
0
2
4
6
8
10
5.8
3.8
1 2 3 4 5 6 7 8 9 10 11 12
8.5
7.5
9.4 9.6 9.3
6.7
8.4 8.4
6.9
5.5
12
/ / Economic OverviewSince the adoption of the economic
liberalization policy in 1991, India has
grown to become a USD 1.3 trillion
economy with a largely self-sufficient
agriculture sector, a diversified industrial
base, and a stable financial and services
sector. Real GDP growth averaged at 8.8
percent between 2003 & 2008, witnessed
a minor slump in 2008-09 and recovered
to 8.4 percent during 2009-11. Albeit with
a few concerns in view of the current
global economic uncertainty in the US
and Europe, the Indian economy managed
to grow by 6.9 per cent in 2011-12 and
remains among the front-runners in
terms of cross country comparison.
/ / India AdvantagesWith a population of just over 1.21 billion,
India is the worlds second most populous
country, after China. Indias burgeoning
middle class which is expected to swell
from the current level of 31.7 million
//India:An
overview
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I7 IDoing business in India
households (160 million individuals) to
53.3 million households (267 million indi-
viduals) by 2015-16,has been one of the
major attraction points, owing to its high
purchasing power. This segment, having
rising disposable incomes and showing
greater acceptance of western culture,
lifestyles and products, and strong demo-
graphic advantages will continue to fuel
Indias growth in years to come. Nearly
31% of the Indian population is less than
15 years old, and with a median age of 25
years, India has an estimated 600 million
young people below 25 years the future
workers of the world. Additionally, the
country also has a large pool of technical
manpower which presents opportuni-
ties for industries looking to deploy
technical talent on a large scale. With this
demographic advantage, India has the
potential to become the economic engine
of the world in the future by contribut-
ing the largest work force to the global
economy.
Not to forget, India also acts as a hub
to the rest of South Asia owing to its
advantageous geographical position and
connectivity to other South Asian countries,
Australia and the countries of Africa, the
Middle East and the Far East.
/ / India ChallengesIndia presents lucrative business op-
portunities, but both foreign and domestic
enterprises face formidable challenges in
conducting their businesses here. India is a
complex market due to regional diversity,
large rural-urban divide, dominant unorga-
nized markets and multiple legal and admin-
istrative systems. Furthermore, a complex
bureaucracy and lack of proper infrastructure
facilities magnify these challenges.
The biggest challenge that most multination-
al companies face is the Indian governance
framework, which is intertwined between
the Central and State structures. The com-
panies face several complex bureaucratic
procedures and are forced to comply with
both state and central rules and regulations.
Moreover, duties and levies undergo frequent
revisions during the Annual Central and State
budget exercise. These factors are the major
reasons why many Dutch companies indicate
dealing with regulations and procedures as
one of the major challenges.
A checklist of business advice featured in
a subsequent chapter facilitates an under-
standing of the cultural and professional
dierences of working with and in India
and can serve as a useful guide for poten-
tial Dutch investors eyeing India.
Indias Demographic Dividend
0
200
400
600
800
1000
1200
1400
2000 20052010 2015 20201991
1991 - 2020
20-59 yrs Total Populat ion
By 2025
India will be the most populous country,surpassing China
India will have the worlds youngestpopulation, whereas China, Japan and EU willhave ageing population
India will have the largest working age groupsin the world- 700 million work force.
India will shape lifestyle consumption trends
1. Source: National Council for Applied Economic Researchs (NCAER) Centre for Macro Consumer Research
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I8 I Doing business in India
W
e are where our customers are:
all over the world. That is how
we know the local situation, the
climate, the crop, the harvest and the sales.
And that is also how we can make progress
in our business, together with our partners.
The groups philosophy also gets reected
in the India marketing strategy wherein
their aim has been to provide seeds and
services to all states of India through its
distributor and agent network. The group
specializes in breeding production and
sales of vegetable seed for the professional
growers market worldwide, and is among
the top 5 largest vegetable breeding com-
panies in the world.
Being active in the Indian market for the
past eight years as a supplier of Gherkin
varieties to the Gherkin processing
industry, Rijk Zwaan International before
establishing a legal entity in India, had ac-
curately studied the Indian agriculture sec-
tor, and assessed the demand for its seed
varieties and the need for new technology
and methods for producing high yielding
crops. Following their initial success with
Gherkins, the Dutch vegetable breeder
wanted to be an active player in the Indian
vegetable seed market and oer a whole
assortment of other products, for which it
set-up its 100% subsidiary in India in 2010
with the intent of collaborating with the
Indian distributors and commencing R&D
operations locally. They realized that to
be highly successful in India, its essential
to have a local representation through an
Indian rm which is managed by a group of
local people.
According to the rm, the Indian market
is not only characterized by its huge
market potential, but also by the large
number of small vegetable nurseries and
a convoluted supply chain in the sector.
Rijk Zwaan India Pvt. Ltd.// Agriculture
//CaseStudies
India for us is a very important growth market attributableto the growing middle class population. This section ofthe population aspires for food safety in the vegetablesalong with good international quality levels. That
movement creates a bigger and bigger market for RijkZwaan in India.
Blend in the Indian knowledge and Indian approach withyour own experience and product expertise, thats really the way togo in India.
What we realized is that to be successful in India you need an Indianorganization and you cannot do that from Holland. Since each statehas dierent requirements, having a local representation and localteam is imperative.
Hans Bouman, Area Manager, Export Department, Rijk Zwaan
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I9 IDoing business in India
In The Netherlands, the rm is accustomed
to dealing directly with the growers while
in India, given its sheer size and a wide
dispersion of vegetable growers across
the length and breadth of the country, the
distribution chain is bound to become more
layered. As a result, their approach in India
has been to ensure a local presence in mostly
all the states- in some cases direct and in the
rest, through distributors which helps them
in marketing and distributing products. By
craftily developing a distribution network, the
company has kept the lines to their customers
as short as possible. Moreover, in order to
avail maximum benet from the chain, they
are right at the heart of a crop to assess how
it is doing and also on the shop oor to see
how their varieties perform on the shelves.
For them, gaining a profound understanding
of their customer needs i.e. assessing why the
grower is growing their seeds and to whom
will he be selling, is highly critical.
Besides the customization of their marketing
strategy, the rm also accounts building
strong contacts and a blend of Indo-Dutch
professionals as the critical factors behind
their success in the country. Since the
establishment of the subsidiary, they have
been able to foster market relationships,
which were instated during their early years
and develop new contacts with independent
growers, growers associations and large pri-
vate-sector conglomerates in the retail chain.
In addition, having a mix of Indian and Dutch
management where the former brings sound
local knowledge and the latter, enormous
ground experience has helped in boosting
their penetration in the Indian market.
A good market segmentation strategy
enables a rm to signicantly improve
marketing eectiveness. In the case of Rijk
Zwaan India, the company has been selec-
tively targeting its product to companies
who value premium and international level
quality. Realizing at an early stage that their
products are meant for a minor percentage
of the total market and diverting all eorts
and focus in the higher value market, has
been Rijk Zwaans way of going about in
India. The company is currently focusing on
expanding its operations in order to be able
to oer more services for India and from
India. The company also claims that provid-
ing services such as informing the customer
regarding technical guidelines, oering con-
sultancy services and troubleshooting kits, in
addition to sale of seeds has been one of the
dierentiating aspects of the company.
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I10 I Doing business in India
NTL Lemnis B.V., a forerunner in the
eld of sustainable lighting solu-
tions based on LED technology, be-
gan its journey into India as a wholly owned
subsidiary as recent as February 2011, with a
vision to enable the transition from current
wasteful lighting solutions towards energy-
ecient alternatives.
For the LED-maker, the decision to set up a
manufacturing facility in the country came
as a result of a major contract awarded
to the rm which required production of
cost-ecient LED lamps, following which
the company began hunting for suitable
opportunities of forming a synergistic
strategic alliance with a supplier who is
backed with a sound technical know-how.
The company proactively selected India
over China to set up its manufacturing facil-
ity owing to better compliance with quality
standards, socio-economic directives and
labor related factors.
Once they found the Indian companies suit-
ing their requirements, NTL Lemnis made a
rm call to step its foot in the Indian market.
The magnitude of the domestic market
potential and the relative fewer limitation
of setting up a manufacturing facility as
compared to China, further encouraged NTL
Lemnis to choose India.
NTL Lemnis was rst enlightened about
the opportunities in India through a market
scan of the Indian lighting industry that was
undertaken by The Netherlands Embassy in
New Delhi in 2008. This scan was executed
with some very important principles of NTL
Lemnis in mind. First of all, the potential
partners needed to have the same DNA
when it comes to sustainability. So a strong
match of values like the quality of life, HR
principles and the environment needed
to be in place to enable a fruitful coopera-
tion. Apart from these principles, a proper
infrastructure, the availability of skilled
engineers and an existing supply chain were
essential variables in their decision making
process. The Embassy did a good job in this
and proposed some interesting contacts
and helped NTL Lemnis in getting a rm
NTL Lemnis India Pvt. Ltd.// Lighting
India moves at its own pace. For us it was quite dicultto move faster than India allowed us. For a foreigncompany to do investments in India, bureaucracy andall the regulations is a limiting and a risk factor. Hiring
a local consultant knowledgeable in all disciplinesexpedites the process.
In India, the spending level of an average consumer is notmuch and the type of product we make is premium. To really enterbig time, we had to work towards cost reduction and to some extentwe made this possible by making product design changes.
Jeroen van Velzen, Project Director
//CaseStudies
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I11 IDoing business in India
grip on the Indian market. In relation to this,
the company recalls the Embassys invalu-
able assistance in recommending a local
consultancy rm to them, and a professional
management consultancy rm, that assisted
them right from the incorporation of their
India entity - NTL Lemnis India Pvt. Ltd. to
arranging all statutory approvals and clear-
ances for their operations and premises.
It is a very tiresome and time-consuming
business arranging all the dierent permits
with dierent organizations yourself. Unfor-
tunately, the concept of a one stop shop is
still relatively unknown. Hiring a consultant
to arrange all these permits can save a lot of
time and frustration.
NTL Lemnis would describe its India
business performance as somewhat
satisfactory because of the sluggish and
complex red tape which limits companies
to move as briskly as they would like to.
It needs a lot of creativity and good trust
to move quickly. NTL Lemnis, for example,
had to nd a temporary solution for the
directive in Indian law that requires every
Indian registered rm to at least have one
certied director. This was something that
NTL Lemnis didnt have. In good faith, it
came to a solution together with their
consultant and appointed one of them for a
limited period of time till all arrangements
had been made. This needs a great deal
of insight and above all trust, since the
director is personally responsible for the
company. Apart from the red tape endured
in the setup phase, market conditions
because of low spending capacity of the
average Indian buyer for premium products
like that of NTL Lemnis, still need to gain
momentum and need signicant modica-
tion and localization in order to reduce
costs and thus attain greater acceptance
levels. Furthermore, the company reckons
that procedures for obtaining licenses
for exports and imports are not only time
intensive but also entail huge costs which
have a direct bearing on its bottom line. As
a result, the company has ventured upon
altering its product design and is under-
taking process improvements in order to
reduce its costs. Regarding expediting the
approvals process, the company regards
roping in a specialized and knowledgeable
consultant as the prudent measure. Having
claimed that, after witnessing rocky times
in the beginning, the company has been
able to make its operations live, by recruit-
ing the right people and partnering with
the right team and hence currently enjoys
its position of having attained the desired
production level.
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I12 I Doing business in India
The Q in Q.I. Press Controls India Pvt.
Ltd., the company that deals with
the development and manufacturing
of automation and control equipment for
printing press, not only refers to the quality
of their products but also to the quality of
cooperation and application of their prod-
ucts. The company, which caters to all the
top newspapers and magazine print houses
of the country, has over 50% market share
and is among the top three companies in
this sector.
Q.I. Press Controls, with eight oces
around the world and an employee base
of 150, is represented in India by its wholly
owned subsidiary Q.I. Press Controls India
Pvt. Ltd, which was incorporated in 2004.
Given the technical and highly complex
nature of their products, entering into
India as a wholly owned subsidiary was the
ideal move. Additionally, the products and
market catered by Q.I. Press Controls are
service oriented and having a fully owned
subsidiary gave better exibilities to the
company to serve its customers on the
spot. Operating on a model based on hired
agents or dealers could not have produced
desirable results as the product requires
to be regularly showcased to show its
added value and demands ownership for
continuous engagement with the customer
for creating prolonged demand. High
import duties and time consuming import
procedure initiated the decision to set up
a subsidiary in Ahmedabad, a logical thing
to do. Apart from that, cost eectiveness
and the knowledge that a local presence is
necessary to counter the well-established
competitors, added to the idea that local
manufacturing had to be realized. Together
with the interesting prospects of the mar-
ket, the company that initially started as a
sales and marketing oce, decided to set
up a manufacturing plant in Ahmedabad,
its second only after the headquarters.
The companys business performance in
the country is highly satisfactory because
of three specic oerings by the Indian
market: 1) cost eectiveness when com-
pared to its manufacturing in The Nether-
lands, 2) a highly skilled workforce and 3)
a promising 12-15% growth of the Indian
printing industry. The strategies adopted by
the company have already assured success
Q.I. Press Controls India Pvt. Ltd.// Printing & Publishing
Sometimes, European companies feel that they shouldhave more control over their India operations. But,selection of right people with adequate experience,and putting condence into them is key.
Indians prefer working with Indian representativesand feel the comfort zone of conversing in their nativelanguage. Thus, hiring a local representative heading yourIndia operations is critical to survive here.
Vijaykumar B. Pandya, Managing Director, QIPC India
//CaseStudies
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I13 IDoing business in India
at an early stage. To begin with, the com-
pany considered Ahmedabad, which enjoys
the reputation of being a straightforward
and business minded region, as their ideal
location for manufacturing, which has
helped them maintain their infrastructural
and other operational costs at a minimum.
Additionally, the selection of the right
people to manage its India operations has
contributed greatly to this early success. To
do so, Q.I. Press Controls had identied the
core management team by pulling them
from the same eld to add the adequate
experiences necessary to set up the busi-
ness. The core group has then developed,
within the company, a very conducive work
culture which lays equal emphasis on work
freedom, work satisfaction and attractive
salary. This has created a dedicated team
whose experience in the graphic eld
of India in sales and servicing of quality
control equipment for printing presses
and a strong customer relationship helped
them gain swifter access to the markets. As
a result, the Indian managements familiar-
ity with the northern region helped the
company to secure contracts from major
publishing houses such as Dainik Jagran,
Bhaskar and Amar Ujala groups as well as
the renowned press manufacturer like The
Printers House Pvt. Ltd.
When setting up a company in India, cultur-
al dierences appear. Q.I Press Controls in
The Netherlands took care of these dier-
ences by ensuring that the management of
her daughter company should have enough
freedom to determine their own course and
take their own decisions along with enough
checks so that the vision and mission of
the company did not get overlooked.
As the company grew with experience, it
found new avenues to further reduce its
operational costs. The company known to
deal in embedded products, having a mix
of hardware and software components,
was investing a large sum in software
development at its home base. Realizing
Indias enormous potential in software
development and abundant availability of
an ecient talent pool, Q.I. Press Controls
scouted for software companies in and
around Ahmedabad for outsourcing their
software development business. Within
one year of outsourcing, the management
discovered that building up an in-house
software development team in India could
prove to be a more practical and a cost
ecient alternative. Following this, the
company formulated a small software
development team in India which is being
regularly backstopped by The Netherlands
research team and resultantly, the group
has already noticed a drop in its product
development costs.
Q.I. Press Controls eventually aims to
become a leader in oering specic and
structured solutions with the main goal of
helping the printing industry in decreas-
ing the use of materials and increasing
quality and eciency. To achieve this, Q.I.
Press Control plans to introduce more
products developed by the company in
the Indian market and expand its business
horizons in neighboring countries to India.
Internally, the Ahmedabad branch plans
to support and increase manufacturing
capacities in India for her parent company
and create software development re-
sources to support the R&D department of
the Principal company.
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I14 I Doing business in India
Metaflex Doors India Pvt. Ltd.
(MDI) is a subsidiary of a Dutch
company in Aalten, The Nether-
lands. It develops, manufactures, installs
and services a wide range of specialty
doors for the cold chain, warehousing and
industrial applications as well as pharma-
ceutical and healthcare. The initiative in
2006, to start manufacturing cold storage
doors in India was triggered by the Indian
need to improve the efficiency in the food
supply chain through proposed liberaliza-
tion of Foreign Direct Investment (FDI)
in the retail sector. While India features
amongst the worlds top producers of
fruits and vegetables, without a proper
functioning cold chain, a huge potential
is lost.
In 2006, Indian entrepreneurs like Reliance
Fresh, Spencers Retail, Food Bazaar, Na-
tures Basket, Spinach, Tata all were aiming
to expand in the food retail business.
Icrier, an Indian Think Tank, published
several positive papers about opening
retail for FDI and the government seemed
positive to move forward.
Metaex entered the Indian market at this
time when there were no real local com-
Metaex Doors India Pvt. Ltd.// Door Manufacturer
In April 2006, organized retail was penetrating India in abig way. Reliance Fresh announced big plans to open2.500 retail stores throughout the country within3 years. One of our clients ordered 200 doors, to be
delivered from our new factory in India. But we had nofactory yet and did not expect to be operational beforeOctober. However, Indian customers dont take no for ananswer. The client wanted it his way and was prepared topay for the airfreight of the components. Assembly could be doneon site. Of course, prices were based on the Indian price list. Thegoods were air freighted in May and only assembled in October.The work of our client got delayed.
The big dreams of Indian retailers abruptly vanished when Gujjarsin Uttar Pradesh burned tires on the main roads around New Delhi
in September 2007. MDI had just rented a factory near Delhi aftera 3 months search. Reliance Fresh and other retailers had ociallicenses to operate their stores, but the riots scared the hell outof them. Populist politicians ordered them to close their storesimmediately. It had a severe impact on the (short term) investmentpotential in (organized) retail. It felt like we were struck bylightning. India fell from the top position as the most attractiveretail destination in AT Kearnys Global Retail Development Index ,2007 to a fth position in 2012.
Peter G.M. Ruigrok, MBA, Director
//CaseStudies
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I15 IDoing business in India
petitors and the market had just started
to develop. Additionally, the sheer lack of
knowledge about and appreciation in the
Indian market of hermetically designed
doors technology and steep competition
from Italian and Chinese counterparts
oering low price products attributable
to weak designs and low safety levels im-
pelled the company to adopt a penetration
pricing strategy. To develop the demand
for more high-end, better quality products,
the company organized road shows, forums
and attended congregations of food stor-
age owners.
This strategy meant the company imported
and sold their products at below-cost levels
in order to induce a purchase. This endured
till the establishment of their own produc-
tion unit in 2010 and local manufacturing
started.
Above all, Metaex feels the strategy to
provide a Dutch quality product, manu-
factured, in India; eventually turned out to
be a good approach. Very soon, the Indian
customers were pushing us to expand our
product range. Already manufacturing
a good portion of the range in India, at
quality levels that meet European levels,
Metaex decided to import components
that would enable it to assemble doors in
India that were not yet widely used in the
market, such as sectional overhead doors,
door levelers and dock shelters. For these
products it forged strategic alliances with
the top quality suppliers in Europe.
After more than 5 years since inception,
Metaex sees light at the end of the tun-
nel. It has established its market position,
but its mission is by no means completed
yet. Metaex is inching towards a break
even and expects to be in the black in FY
2012 - 2013. It has paid its dues and learnt
its lessons from the start up in India.
Things might have turned around quicker if
the Indian Government would have liberal-
ized and thus approved the FDI in multi-
brand retail much sooner, like anticipated
by Metaex. Regardless, the company has
established a strong foothold in the market
that currently corners over 35% market
share in the specialized door market. Fu-
ture prospects are more compelling given
that one hurdle has been crossed and
these changes in Multi-brand retail FDI will
eventually happen. And once it happens,
they will be there.
India is a beautiful country. While many
people like it, some hate it. Because many
educated Indians speak English and have
travelled the world, a connection is easily
made; but that first impression might fool
you. The Indian culture is very different
from the Northern European culture and
must be fully understood when investing
in this so-called vast opportunity. Apart
from the cultural difference, one needs
to understand that India is a country
where things tend to move slowly. The
realization that successfully entering the
market will need a lot of time, effort and
a lot of perseverance is important to cul-
tivate. But, when a successful entry in the
market is achieved, the gains are there in
this huge and continuously developing
market. So remember, if youre looking
for a quick win, dont come unless youre
completely sure you will succeed.
If you want opportunity toknock, build a door. We builddoors.
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I16 I Doing business in India
Choosing the appropriate oshore
model is quite a challenge, and
making sure that the model is imple-
mented properly compounds this challenge.
CoMakeIT has successfully faced both
these challenges and emerged as preferred
product development partner for many
companies. CoMakeIT is headquartered in
Harderwijk, The Netherlands, with their de-
livery facility in Hyderabad, India. CoMakeIT
is dedicated to partner with Independent
Software Vendors (ISVs) in their growth and
sourcing strategies by providing most spe-
cialized software R&D services in the world.
Equipped with a relatively young, well
educated workforce with a strong will to
succeed, Hyderabad made an interesting
location for CoMakeIT to establish her
subsidiary. Apart from this, Hyderabad has
a historic angle to IT investments from The
Netherlands with Baan Company being
the rst software product company from
Holland to have setup a 100% subsidiary
in Hyderabad. This has given rise to more
software product companies around the
globe to look at Hyderabad, as a viable and
positive option to expand their operations.
Microsoft, for example, has their largest R&D
centre in Hyderabad next to Redmond, WA.
The coordination between the locations
has been balanced perfectly with the sales,
business development, customer engage-
ment and accounts being handled from The
Netherlands, and the software product de-
velopment being implemented by the Indian
subsidiary. This division has eectively man-
aged to attain a 30% year-on-year growth
over the past few years. The company has
grown from a meagre sta of 17 in 2006 to
the present the adcount of 200 employees.
The recent tie-up with a Danish company is
expected to add another 200 employees to
its human resource base over the coming
years.
CoMakeIT believes demand driven
innovation is the way to go, by linking the
power of creativity and entrepreneurship
in The Netherlands with capacity and skills
available in India. In a way, CoMakeIT has
brought India closer to the Dutch software
product market. With a majority of the
CoMakeIT Software Pvt. Ltd.// Software Services
A highly procient talent pool backed by strong academicbackground and elaborate experience has been one ofthe foremost reasons why foreign companies look atIndia and will continue to look at India for o shoringopportunities.The Dutch are inherently more creative and they arealso outgoing but only when there is trust. The only wayto gain their trust is by showing how much you understandtheir business or how you can integrate into their business.So, for us, the two tools were transparency and trust that hasdierentiated us from the rest.
Kiran Madhunapantula, Chief Operating Ocer, CoMakeIT
//CaseStudies
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I17 IDoing business in India
students in the Netherlands opting for
diversied elds other than IT, there has
been a shortfall in the number of software
professionals. In this scenario, CoMakeIT
has been able to boost the innovative
potential in the Netherlands by contributing
with equally good intellectual capital,
abundantly available in India.
Business Potential In India
The Indian subsidiary of CoMakeIT is the
hub of its operations. The subsidiary is the
engine for scalability, cost eciency and
productivity that makes CoMakeIT B.V add
real value to its customers.
Some highlights:
CoMakeIT rst came to India not
to serve the Indian market but to serve their
customers in The Netherlands, which has a
mature ISV market, consisting of over 300
product development companies in com-
parison to only 50 in India.
Realizing a huge potential in the
Dutch market, the parent company began
o-shoring its software R&D business to
India.
CoMakeITalso serves as the launch
pad for sales and marketing for Dutch soft-
ware companies to sell their products in the
Indian market.
Although the key business of CoMakeIT
is to provide software R&D services, its
customers have shown interest in penetrat-
ing in the Indian market as well. A case in
point is InnoVites, a Dutch company that
produces software for cable manufacturing
companies.
The core management team of CoMakeIT-
brings to the table over fteen years of
experience in setting up and managing
distributed softwareR&D companies in
India. The company believes that true value
addition is generated only if the cooperation
between them and the customer is imple-
mented as a partnership. To do so, trust and
transparency between the two are essential.
These two vital aspects have been the com-
panys major dierentiating factors when
compared to its competitors. For CoMakeIT,
employees are not just resources to be used,
but they form a capital to be invested in. The
companys practice of sustainable human
capital development has not only helped
them retain the best talent, but also achieve
an attrition rate of less than 5% during the
last few years.
Working With Distributed Teams
To continuously improve the quality and
eciency, as well as the output of the teams
in India, CoMakeIT oers a set of supporting
tools, methodologies and programs. Another
big challenge is to bridge the cultural gaps
between The Netherlands and India when it
comes to achieving team synergies on live
projects. For this purpose, CoMakeIT exten-
sively uses video communication. On a daily
basis, the teams meet up over a video con-
ference. By communicating often and more,
they reduce the risk of not understanding
each other.
Apart from this, the company encourages
what it calls shuttle diplomacy, people
travelling to each others location to get to
understand better and acquire knowledge
on product and process.
CoMakeITs ambition is to expand into the
markets of Australia, the UK, Canada and
the US. They have already succeeded in
Australia and the UK at the moment and
the outlook is quite encouraging, especially
because of the good business model they
have managed to realize.
understand better and acquire knowledge
on product and process.
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I18 I Doing business in India
Who are THEY THEY are a group
of nice people in Amsterdam
and Delhi who love to make
brands grow is a sample one-liner from
the companys highly interactive webpage
which enunciates their out-of the-box and
contemporary mindset. A relatively new
entrant in the advertising space, founded
in 2005 in Amsterdam, THEY was named in-
ternational agency of the year by AdAge in
2009. THEY brings to India a European style
of thinking, which has been well received
by the Indian market, which is still pretty
much dominated by the large international
network agencies.
Interestingly, the company never had India
on its radar, and was purely drawn in by
assignments. The rst being, designing
a campaign around the recently built T3
Terminal of the Delhi airport and branding
it to make it comparable with the most
sought after ones from across the globe.
Following its success, the opportunities
started pouring in and the company
decided to establish its wholly owned sub-
sidiary in Delhi in 2010. It seemed a logical
move to set up business here in New
Delhi because of the fast-paced growth
of the economy and the fact that clients
responded favorably to the more strategic
approach to creative communication that
THEY brings.
The advertising rm is very satised with
how things have gone in India for them so
far. For the future, THEY is optimistic when
it comes to the abundance of opportunities
India has to oer and consequently the
increasing growth pace of the companys
presence in India.
However, like a bed of roses is bound to
have thorns, the company has encountered
several challenges and has also undertaken
measures to overcome them. Finding suit-
able talent has been the most daunting
THEY India
// Advertising
In order to be successful in India, companies should beready to set foot into the country and operate fromhere rather than managing from The Netherlands.
Companies should not be willing to compromiseon core beliefs and principles but at the sametime should be accommodating enough to expectoperations to be very dierent from their home country.
Tjaco Walvis, Managing Partner, They India
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I19 IDoing business in India
challenge. The company nds the countrys
resource pool to be slightly less compatible
with its modus operandi, since the com-
pany is accustomed to a more structured
and well planned approach and a mature
project management environment in The
Netherlands. In response, the Indian branch
considers increasing its existing expatriate
personnel as a viable short term solution. In
the long run however, THEY emphasizes on
the training of local talent with some adver-
tising experience to work in their approach.
The ideal mix is to have mostly local people,
with a few Europeans at key position. Anoth-
er challenge when it comes to personnel is
to make sure they stay with the company. So
far, probably because of the opportunities
THEY has to oer, the company has man-
aged to keep the hired people within the
company. But, this needs constant attention
since changing jobs frequently tends to be
a common habit of many Indian employees.
The fact that THEY brings a dierent way of
working makes it more interesting for many
Indian employees.
One of the dierentiating factors for the
company has been its consistent quality
deliverance, a factor typical to most of
the foreign companies in the country.
Additionally, the company also sees its
European headed management as an ic-
ing on the cake, an aspect which enables
relationship building with both overseas
and domestic clients. THEYs managing
partner, Tjaco Walvis feels that European
leadership gives a sense of reliance to the
international clients who might be wary of
engaging with an Indian company and at
the same time to the Indian counterparts
it brings to the table a possibility of expe-
riencing a refreshingly new approach and
hence a novel product.
Building and maintaining these relation-
ships is a necessity when it comes to
attracting new clients and keeping existing
ones. Its a process that consumes a lot of
time and eort. Its an important aspect
of doing business in India. This is not only
part of THEYs business, but probably
everywhere. There is no alternative but to
be patient and persevering. At the same
time, THEY constantly challenges its own
strategy to keep what works in India and
change what does not.
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I20 I Doing business in India
Even in times of slowing economic
growth, the Indian steel industry
has succeeded in sustaining healthy
growth gures thanks to growing demand
from the construction, automotive and in-
frastructure sectors. This growth has been
facilitated by both the public and private
sectors, with the government introducing
favorable industrial reforms and private
parties undertaking substantial invest-
ments. These developments have attracted
many equipment suppliers and plant
builders to India, one of which is IJmuiden
based Danieli Corus. This company set up
its wholly owned subsidiary Danieli Corus
India Pvt. Ltd. in 2007.
Danieli Corus has its roots in the famous
Hoogovens IJmuiden steel plant, which is
currently operated by Tata Steel. The com-
pany specializes in integrated steelmaking
plants for high productivity during long
campaigns.
Until 2007 when Danieli Corus established
its Indian subsidiary, the company operated
a small sales oce in India comprising of
just three people. Over time, as the demand
increased, Danieli Corus India grew towards
an operational outt active in all areas of
iron making and steelmaking. Currently, it
employs well over 40 people and recently
moved into a brand new headquarters in
South Delhi.
The Indian market has some characteristics
that make operating in it a challenge.
First of all, the project environment is highly
dynamic and to a certain extent even un-
stable. Project execution may take years from
planning to nalization and can be delayed
or altered for reasons outside your sphere of
control. Consequently, a exible organization
and of course a lot of patience and persever-
ance are valuable assets in this market. To
overcome these challenges and create a ex-
ible and solid organization, the close coop-
eration between the Dutch headquarters and
the local oce has to be made a priority. By
combining state-of-the-art technology from
The Netherlands with sourcing, engineering
and project management both in India and
The Netherlands, Danieli Corus created a
Danieli Corus India Pvt. Ltd.// Iron & Steel
Make sure you have a local representation by localpeople with ample experience and a good network.
Dont expect that since India is an emerging economy
and has a huge domestic market, your entry willbe easy. India is a dicult market, take your time,be patient, be persistent, and make sure you getcommitment from headquarters.
Explore the Indian market thoroughly and seek advice fromcompanies operating in India.
Robert Heukelom, VP, Operations, Danieli Corus India Pvt. Ltd.
//CaseStudies
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I21 IDoing business in India
exible organization capable of operating suc-
cessfully in this market.
Secondly, it is very important to keep in mind
that relationships are everything in India.
Building and maintaining good relationships
with clients is an essential part of day-to-day
business. Throughout the years, Danieli Corus
has always made account management as well
as technologists available to clients to help
develop a healthy and solid relationship.
Thirdly, being a technology driven company,
Danieli Corus found itself confronted with
issues of price competitiveness. The Indian
market, at this stage, is one of the most price
sensitive markets, for which the company
has modied the design of the furnaces to
accomodate local sourcing for improved price
competitiveness while maintaining the highest
quality standards. Additionally, Danieli Corus
has successfully stressed the USPs of their
technology: the capability to operate at the
highest productivity and with the longest cam-
paign life, based on an operational philosophy
not oered by competitors.
Finding reliable manufacturers and suppliers
that could meet quality standards has been
another challenge, and the focus has been on
developing long-term relationships with sup-
pliers. Though still a eld of constant improve-
ment, Danieli Corus has already managed to
gain some good results.
After years of hard work, the company has es-
tablished a solid position in the Indian market,
as well as a reputation of technological excel-
lence and exibility. To get to this point, Dan-
ieli Corus chose to stick to its core principles
of delivering top-notch quality solutions.
With this solid foothold, the Indian sub-
sidiary is now set for further accelerated
development. It will work towards increased
market share and benet from the economic
growth and the consequent high demand
from the iron and steel industry for the com-
panys products.
To do so, perhaps one of the most important
aspects to enable this growth and maintain
the Danieli Corus USP, is the companys
decision to dedicate a Dutch national for
managing this process for several years. The
cultural dierences and the expectations
from both countries and organizations
require continuous alignment and mediation
and have been an area of special attention
for the last 5 years.
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I22 I Doing business in India
Incotec International BV, a reputed Dutch
company in the eld of seed research
and technology had established its 100%
subsidiary Incotec India Pvt. Ltd. in the year
2004. Incotec started to explore the Indian
seed market back in 1995 by visiting key
seed companies which was followed by its
rst imports in 1998, done through an agent.
In 2001, this agent agreement was over
and Incotec started importing directly and
nally in 2004, a local production facility was
established in Ahmedabad (Gujarat) to serve
the customers.
The company focuses on providing technol-
ogy that helps the seed sector to compete
in the global markets by producing healthy,
fast growing and protected crops. When
Incotec rst entered the Indian market, the
conditions in the seed sector were still quite
unorganized and in an early stage of develop-
ment. There was no unied seed association
on a national level. Basically, each province
was having its own seed association and the
seed market was dominated by traders and
only to a limited extent by technology.
Their research threw light upon the diversi-
ed cropping pattern in India and how the
Dutch technologies needed modications
to better suit the Indian context, given that
these were traditionally based on European
food & farming habits. A big dierence is
that the European farming over the years
has become highly mechanized and is done
in an almost totally controlled condition
(glass houses). But in India its still very much
a manually operated sector and is done in
Incotec India Pvt. Ltd.
// Feed Technology
If we recruit people from Agri Universities, based ontheir academic background, like we had done in thepast, moulding them according to the Dutch way ofdoing things, becomes a challenge. Its a challenge
getting the technical people to meet our expertiseneed due to the unique nature of our business. However,nding people for administrative purpose is not dicult.
The legal structure (title) & share holding pattern of the companyis the most important, and it should be taken care of right at thebeginning. If its not done properly then you might lose a lot ofmoney through taxes.
We strongly believe in Think Globally & Act locally, as well inThink like a Farmer before you act.
The Netherlands Embassy is doing a good job, so support fromthem will be useful as it becomes a conduit of experience sharingthat enables other Dutch companies to succeed in India.
Dr. Manish Patel, Executive Director, Incotec India Pvt. Ltd.
//CaseStudies
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I23 IDoing business in India
open eld conditions. Another big dierence
is the amount of money Indian growers can
spend on our products. Thats why a lot of
modications to the products were required
to make Dutch technologies suitable to
Indian agricultural circumstances, both from
a product point of view as well as costs.
As mentioned before, given the farmers low
purchasing power in India, the inevitable
price rise due to technological add-ons
would have found few takers. The only way to
combat the price rise was to set up produc-
tion facilities in India itself which initially
went against the Dutch managements earlier
approach of keeping all production in The
Netherlands because of the risk of technol-
ogy being lost or copied to competitors.
Furthermore, as in the case of any premium
product oering, the company initially
targeted all the top seed companies of In-
dia. According to the management, in this
sector, once the upper crme have adopted
Incotecs technologies, the smaller rms
generally follow suit in order to survive in
the market. But when Incotec started in
1997, it thought it would be the best way to
persuade farmers to adopt Incotecs seed
coating concept by translating the promo-
tional literature in local languages which
farmers can understand and participate
in farmer fairs and exhibitions. This how-
ever, didnt work out as planned. Incotec
realized that it needed to have a proper
understanding of the market conditions
and consumer patterns.
These success strategies have truly dened
Incotec Indias impressive business perfor-
mance in the Indian subcontinent. The an-
nual growth ranges between 20-30%. So the
company will continue to launch novel tech-
nologies, which have not yet been introduced
in the Indian market. It doesnt stop there.
The future goal of Incotec India is to start
oering integrated technologies and services
to the whole of the Central Asian seed sector
from out of India (previously, this was done
out of Europe). For that reason, Incotec par-
ticipates in the Vibrant Gujarat initiative of
the Government of Gujarat that encourages
and facilitates foreign investments.
Though its a huge investment for Incotec, the
company is committed to do so because of
the increasing necessity of getting a second
green revolution in India. At this moment
the country is running on its edge of its food
production and nds it challenging to keep
track with the rapidly growing population. Ad-
ditionally, the company has decided to convert
into a Limited Liability Partnership (LLP) struc-
ture, which combines the best of partnership
and company form of an organization and
provides more exibility without imposing de-
tailed legal and procedural requirements. The
driving factor behind this move has been the
issue of repatriation of prots in the present
private limited company structure.
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I24 I Doing business in India
Checklist of Considerations for Dutch Investors
There are a number of success
stories from The Netherlands, of
companies that have set up growing
and protable businesses in India. At the
same time, the going has not been good
for several others, including a few large
companies. Small companies and rst
time entrepreneurs can nd it dicult
to understand and deal with a range of
procedures and regulations, and build
scalable businesses in India. It can be
said that the Indian market is large and
yet a complex of many small markets,
and requires a dierentiated approach
depending on the business sectors and
target markets. As a result, there is an
increasing understanding that sustaining
success in India requires a long-term
approach and a reasonable threshold of
enterprise size and investment levels. This
may well explain the dierence between
the successes and failures among Dutch
companies operating in India.
The stories you read above show some
of the challenges and solutions in a
very practical way. To give some more
background and support for the Dutch
companies making their way into the
Indian market, we have put some points
together. Please keep in mind that this
is not a Guidebook on how to set up
business in India but only an indicative
checklist and could involve a range of
other aspects as well. Just look at them as
an initial checklist, consider it some food
for thought.
Your India Rationale:a) Be clear about
your objective of entering into the
market as well as assess your business
viability and the success factor through
detailed market assessment.
Identify your business - selling
imported goods into India; producing
locally for the market; sourcing for
other markets; outsourcing for existing
markets; etc.
Identify the critical India Advantage
for your business and revalidate it
//India:BusinessAdvice
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I25 IDoing business in India
through a careful study of market and
consumer behavior.
Estimate and plan for the threshold
levels of investments and sunk costs
+ time you need to invest in India to
establish a sustainable presence.
Business Culture:b) Indians are easy
to work with but are accustomed to
dierent work cultures vis--vis the
Dutch. Before you deal with them, its
good to have a basic idea about their
traits.
Indians generally appear friendly but
avoid over-questioning them during
due diligence.
Foreign partners can expect
overwhelming hospitality.
Indians can be described to be
having a No problem mindset and
believe that there is a solution to
everything.
Everybody knows Mr. Big: Name
dropping is a common feature of the
Indian business culture. Everybody has
some amount of access to powerful/
inuential people. The access to
corridor of power is often cited as a
means of showing ones own inuence.
This may not be realistic, so beware of
too much optimism when it comes to
the connections.
Promises are as easily made as
abandoned.
Agreements and contracts are not cast in
stone, as there is a very high possibility of
clauses getting renegotiated, even after
being signed. The intent is ultimately
more important than content.
The Indian way of doing business is
relationship based. Indians would
prefer to have a good relationship and
common trust, before doing business.
But once the trust is there, the
relationship will last for a long time.
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I26 I Doing business in India
This relationship is a good alternative
for going to court, something you
would like to avoid since these
procedures might take years and years
and are very costly.
Government & Regulation:c)
India has a well laid out legal system/
process. It can be overloaded and
sometimes slow.
Taxes are high and procedures are
complex.
The culture of tipping (baksheesh)
for speeding up provision of services
exists to some extent.
Red tape remains a perennial issue,
but the diculties of navigating the
bureaucracy have been outweighed
by the eventual benets of successful
market entry; a long-term view is
required.
Besides the taxes levied by the central
government customs duty, central
excise duty, there are taxes levied by
the state government too viz., value
added tax, central sales tax, entry tax/
octroi.
Pre-investment Phase:d) The Indian
market is extremely price sensitive
and identifying appropriate markets
and segments forms a core element
of the entry strategy. A dierentiated
approach is required depending on the
business sectors and target markets.
If required, work with specialist
consultant organizations and develop a
thorough understanding of the market.
Before marking your rst steps into the
Indian market, there are several things
to consider. For example:
Consider the large amount of
secondary data available in India before
commissioning primary research; you
may nd that you do not need a very
accurate estimate, given the vastness
of the Indian market.
Indian markets are very price-sensitive,
conservative, and operate under peer
//India:BusinessAdvice
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I27 IDoing business in India
group psychology. Drastic changes in
consumers spending patterns take time.
Do not ignore the rural markets, though
they are very hard to penetrate.
Speak and listen to other Dutch companies
operating in India.
Business structure:e) once youve decided
where to establish your business, its time to
take a good look at how you would like to set
up your business. A few things to remember.
Consider carefully the need for a local
partner: in most activities, the government
regulations allow a 100% foreign ownership.
You may nd that you actually need a
Country Manager, and not an Indian
investor partner.
If a local partner is preferred, carry out a
due diligence review, and also check the
memorandum and articles of association
of the proposed joint venture company
thoroughly.
When you decide to team up with a local
party, it is advisable to get the best help
available to do all the checking and for
preparing the legal framework.
Contractsf) : some special attention to
Signatures have no weight and most
agreements are renegotiable. This
is especially so in view of the slow
legal enforcement process. Financial
commitment of the partner is the surest
conrmation of implementing ventures.
Understand the full implications of taxation
on lump sum, royalties, etc. and also terms
like net and gross payments.
Involve detailed force-majeure clauses and
arbitration conditions in agreements, besides
clear exit clauses upon the occurrence of
specic conditions in the venture.
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I28 I Doing business in India
Enforce all oral understandings in writing;
do not leave anything uncovered- even in
condential agreements.
Always have an exit clause in your
partnerships.
Investment Phaseg) : a critical phase in your
establishment
Location aspects:Before nalizing any
particular location for running your business,
it is important to be clear about the following
considerations.
Understand the zoning and environmental
aspects applying to the location.
Check out property titles, and preferably
buy land directly from the Government.
Ensure that property titles are transferable
to the company and do not remain in
private names or under power of attorney.
Understand tax and other incentives
available in various locations.
Check out availability of resources, logistics
and transportation, besides social amenities
and living conditions before nalizing your
business and factory location.
Management/personnel:once your business
location is nalized, you need good human
resources to manage it. It is useful to have a
look at the points mentioned below.
Determine the actual need for posting
expatriates at various levels, especially as
a Director, attracting a local director has
great benets too.
Understand all local employment terms,
income levels and social costs, before
nalizing an HR policy.
Outsource as much work as possible.
Avoid locations known to harbour militant
trade unionism.
Biggest challenge is to create a good
and eective link to the company in The
Netherlands. Make sure the mixture of local
and Dutch is good.
Running the Businessh) : Follow the rules.
Indian authorities are keen to get back to
you whenever you dont! Consider to have
a good liaison agent and outsource all
government related issues, it can save you
time and unnecessary problems.
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I29 IDoing business in India
//CON
CLUSION
// Conclusion
Identication of suitable local partners:This
should be a priority in any successful market entry
strategy. Many companies which have successfully
entered the Indian market, stress the importance
of devoting signicant resources to this aspect of
their overall strategy. Those that committed timeand eort to nd the perfect t often found that
they saved themselves the task of having to nd
additional partners later on.
Know your market:Be clear and thoughtful
about indentifying your customer segment
and reaching them with targeted marketing
eorts. It is possible that lack of knowledge and
appreciation of your products and services in the
market coupled with availability of substitutesat a cheaper price can signicantly alter your
envisaged pricing strategy.
Long-term commitment: Partnerships with
India need to be seen over the longer term. Trust
is necessary and attention should be given to
building this in the initial stages of the interaction.
This will mean considerable face-to-face contact
and social interaction.
Understand the culture: It is also necessary to
understand the dierent styles of doing business
in the two countries.
Information Sharing: Participating in Embassy
seminars, conferences to network with otherDutch organizations that have worked in India.
Seeking advice from professional
consultants:In relation to market and
feasibility studies, fundraising, cross-border
acquisition, assistance with joint ventures,
transaction and assurance services, tax
planning, transfer pricing and government and
infrastructure advisory.
Business development techniques:
Meeting with potential Indian partners and
developing local contacts in India via industry
associations, such as the Federation of Indian
Chambers of Commerce & Industry (FICCI),
the Confederation of Indian Industry (CII).
Creating awareness about your products and
pinpointing the attributes in a way to create
your own market which is latently there.
There are challenges that any investor would face towards establishing a successful business
presence in India. Given that the regulatory environment is seen as one of the largest barriers to
entry, it is critical that the appropriate strategies are envisaged right from the planning stage. Red
tape remains a perennial issue, but the diculties of navigating the bureaucracy have been thought
to be outweighed by the eventual benets of successful market entry. To summarize, the India entry
checklist among other things call for:
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I30 I Doing business in India
//DoingBusinessinIndia
Opportunities in IndiaIndia has one of the fastest growing
economies in the world today.
Economists predict that by 2020, India
will be the third largest economy in the
world. There are many opportunities
in India for Dutch companies willing to
invest time and effort in establishing
their business in this rapidly expanding
export and investment market.
Business assistance
The Netherlands government provides
support to companies that want to do
business in India. This assistance is
available through our extensive network in
both India and The Netherlands.
For India, the assistance covers the
following areas:
Information resources
Providing basic information about
markets, both geographically and in
terms of specic products
Supplying information on developments
in science, technology and innovation in
India
Advisory services
Initial identication and researchinto potential business partners and
partners for scientic and technological
collaboration
Providing referrals to experts in legal
matters, recruitment and accounting
Match-making assistanceFinding potential partners for your needs
in research, scientic collaboration or
technological exchange
Arranging contacts with relevant
stakeholders and prospective business
partners in India
Business support
Providing assistance with preparation
and organization of business trips toIndia
Oering an ocial umbrella under
which to operate, which can make a
decisive dierence
Providing advice and assistance with
project tenders
Problem solving and intervention
Intermediating in conicts
Directing you to the relevant governmentauthorities and non-governmental
bodies
Acting as observers
In The Netherlands, the government
agency NL EVD International can
provide the following:
Useful information on sectors, legal
procedures, tax regulations and other
mattersIndustry-specic market scans
Assistance in nding potential business
partners in India
Customized information on subsidy
schemes and nancing
The Netherlands Government can help your business take
advantage of the opportunities in India
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I31 IDoing business in India
NL EVD International, The Netherlands
T: +31(0)88 602 80 60
Netherlands Embassy New Delhi
Economic departmentE: [email protected]
T: +91(0)11 24197618
Agricultural Department
T: +91(0)11 24197605
Science & Technology
T: +91(0)11 24197675
NFIA (For Indian investments in The
Netherlands)
T: +91(0)11 2419 7629
W: www.na-india.com
Netherlands Consulate General in Mumbai
T: +91(0)22 22194200
Network Partners in India
Netherlands Business Support Oce (NBSO)
in Chennai
T: +91(0)44 42158388
Netherlands Business Support Oce (NBSO)
in Ahmedabad
T: +91(0)79 26449858
Netherlands Business Support oce (NBSO)
in Hyderabad
T: +91(0)40 42030788
Netherlands Agro & Food Technology Centre
(NAFTC) in Delhi
T: +91(0)11 33521521
W: www.naftc-india.com
Useful links
www.hollandtrade.com
www.hollandinindia.org
http://india.nlembassy.orgwww.cbi.nl
www.agentschapnl.nl/onderwerpen/internationaal-ondernemen
In addition to the support oered by the Netherlands government, more in-depth commercial
assistance is provided by consultants, banking institutions and other organizations. Further
support is available from specialized organizations.
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