Date: Tue 30th March, 2010
Venue: BT Convention Centre, Monarchs Quay, Liverpool, L3 4FP
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Insider’s international trade breakfast offered company directors the chance to share their experiences of working in India, to discuss challenges and opportunities, and to learn more about taking that first step.
Guest speaker Suresh Ruia, managing director of textiles empire Beamfeature, joined an experienced panel at Liverpool’s BT Convention Centre to debate key issues with an enthusiastic audience.
With an established, successful international business based in Manchester, Suresh is now expanding the Beamfeature operation into his native India and he talked of the changing commercial landscape there.
Political changes in the country in the late 1980s encouraging international business and the decision to allow free open trade a decade ago have both been critical factors in India’s economic development. “After a sharp increase in the number of large shopping malls attracted multi-national retailers, Beamfeature decided to invest in India,” he said.
Ruia also sought to debunk some modern myths: “It’s not all about call centres,” he said, adding that 350 of the listed ‘Fortune 500’ companies are currently outsourcing to India.
He was joined on the panel by John Fenton, special projects manager at HMG Paints, and Sunil Mohindra of Manchester-based solicitors Mohindra Maini. Both echoed Suresh’s enthusiasm for doing business with India but delegates also heard some cautionary tales.
Fenton, who leads Titan HMG, the company’s joint venture in India making paint with machinery group LMW, has learned from personal experience that all is not always is at seems: "The energy of India is quite astounding," he said, “but the hierarchical structure of Indian companies can be challenging.”
Mohindra concurred. "Don't always accept at face value what people say to you," he said, adding that those doing business in India should “beware the ‘yes men’.” All were quick to add that this was born almost entirely out of an eagerness to help.
India’s willingness to do business was reflected in almost every aspect of the discussion although inevitably there are hurdles to overcome. Questioned about funding new ventures on the sub-continent, Fenton suggested not seeking external funding in India until businesses have a foothold in the country as financial institutions are reluctant to lend to new clients with whom they have no history. Mohindra advised that those seeking funding should first build relationships with global banks with offices there or with Indian banks which have offices in the UK.
The huge appetite in India for new ideas that can be profitably developed means that intellectual property can be difficult to protect. “Our partner [LMW] holds all the formulas for our products there so we’ve focused on protecting our brand identity and logo,” said HMG’s Fenton.
Ruia agreed that firms seeking to do business with India must have realistic expectations: “Registering brand names is important but copyright enforcement is not like it is in the UK, although courts are getting better at enforcement and it is slowly improving.” He said that progress had also been made in reducing corruption in India: “It still happens but computerisation and increased competition means that it is slowly being eradicated.”
As with so much internationals business, relationship building is critical to success, said Mohindra: “Due diligence is of the utmost importance – know who you’re dealing with. Ninety per cent of Indian businesses are family-owned so understanding the market and getting to know the decision makers is crucial.”
