Insider Media Limited

I read with interest Andy Coyne’s recent blog on the reasons why local companies should be exploring the potential for international trade. I was particularly interested in the comments about the India market.

It’s a fact that historically the majority of businesses, particularly SMEs, have preferred to operate geographically within their comfort zone, a case of ‘sticking to the knitting’ wherever possible. But the economic downturn over the last two years and continued uncertainty over the medium term future have led owners and directors to consider diversification more seriously than ever before. Exploring new markets should be a key element of any such decision making.

In the Midlands, there are many business owners with family roots in India which are already doing business there. However, India isn’t just a market for those UK Asian-owned businesses - it is an opportunity for all.

I fully endorse the IoD’s Miles Templeman’s assertion that to still tag India as an emerging market is, in certain respects, misleading: make no mistake India has well and truly emerged! It may not be as mature a market as those in the west, but companies which underestimate its sophistication and the opportunities presented will be at a serious competitive disadvantage.

Anyone considering entering the Indian market must have a good strategic reason for doing so. For example, manufacturers may already be relocating their volume production processes to lower cost-base economies, whilst looking to keep their leading edge technologies and R&D activities onshore. In this case they need to ensure that they address the changing skill requirements of their employees, ensuring that they have the right recruitment, training and retention strategies in place to protect their competitive edge.

Owners and directors considering how the India market may benefit their business’s future should not simply focus on exporting their products and services - they should take a completely holistic approach: really delve into the business, the way it works, what they do, what products and services they provide, where can it be done best and what support is out there to help them do it better.

Certainly, talking to an advisory firm like Grant Thornton, which has a track record of both inbound and outbound cross-border trade with India would be advantageous. Over the last ten years, we’ve invested, and continue to invest, in a dedicated resource to help companies to capitalise on the potential that India presents and, working with our colleagues within Grant Thornton India, are able to guide companies every step of the way.

This may involve considering whether a joint venture or sub-contracting to a business operating in India would be advantageous; reviewing the corporate and tax structure of the business; tackling foreign exchange matters and the not-inconsiderable regulatory issues.

To be fair, the Indian government has made great strides in bringing down barriers but there is more to do. The UK’s new coalition government has made its commitment to strengthening trade relations with India and the message coming out of its trade mission there this the summer was unequivocal: David Cameron said he wants to make the UK the ‘partner of choice’ for India and also called for the continued reduction in trade barriers in banking, insurance, defence manufacturing and legal services, plus easier access for British businesses to set up and trade in India. This is encouraging and we will watch with interest to see how this commitment develops into action.

I believe that a reduction in red tape would be hugely positive - not just in terms of practicalities on the ground, but in also encouraging more business owners to feel comfortable in exploring India’s potential and that’s got to be good news.

Suneel Gupta, head of Grant Thornton’s South Asia Group in the Midlands