Ralph Hays, NZ Trade Commissioner and Consul General, Mumbai
India is changing fast. In the last few years, India has gone from ranking 130 in the World Bank Ease of Doing Business rankings to 77, the Modi government has invested significantly in its Make in India programme, and there has been a rapid rise of more Western-style supermarkets. Such developments bode well for companies considering India, including those seeking to diversify their international operations.
A viable high-tech manufacturing hub
As more New Zealand companies seek to augment their global supply chain, India offers a viable location for large-scale, high-tech manufacturing with a large, well-educated and stable workforce (it is not uncommon for people to be in a job here for 10 years compared to 2 -3 years in a similar job elsewhere), and proximity to customers in the Middle East, Indonesia and South East Asia. Such operations complement those elsewhere, including in New Zealand.
Make in India investment
Through the Modi-led Government’s Make in India programme, India is investing significantly in infrastructure, airport development, digital and smart city initiatives throughout the country. New Zealand companies who consider their niche within this significant programme are in a good position to take advantage of the opportunities. Like anything, it is important to look beyond the highlights, fully understand how a project fits with your India business model, and put in place the detailed agreements needed to ensure success.
The expansion of the world’s fastest-growing major economy needs to pick up to around 8 percent to deal with poverty and other challenges.
Reserve Bank of India Governor Shaktikanta Das
Defining your India business model
Investing the time to determine the right business model for your business in this market is essential. This means defining every element of your business in India, starting with clarifying your business activity, and product or service before looking at sales methods and channels, office setups, product volumes, after sales provision, and price points. Consider how much you’re prepared to invest here, and what partnerships you need to make it work.
India is an ever-evolving market, and your business model needs to be able to change over time. Think about where you want to be in five years, how your business may evolve over that time and how to minimise risk. Business centre service providers like Regus, Servcorp, Coworks as well as the recent arrival of the sophisticated WeWork entity provides quick access to office infrastructure with minimal effort and allow companies to test the water without the level of investment that was needed in the past.
A long-term, strategic approach
India is not a market characterised by quick wins. It’s not to say they don’t happen – there are some genuine examples, such as when local produce supplies suffer from a lousy season resulting in a need to import produce to meet demand, but by and large, they are not common.
Succeeding in India is often about having stamina, resilience and a long-term, strategic approach. These are common characteristics of many New Zealand companies that have been successful in India for many years now including Fisher & Paykel Healthcare, Rakon, and Glidepath. India is part of their regional and global supply chain, they have accessed and harnessed the workforce capability available here, and they have flexed and adjusted their business models along the way.
India is, and will continue to be, a market of diversity and rapid change. With 1.3 billion people, India is a combination of both a large, developed ‘first-world’ market and one that is hugely under-developed. For those that target the right piece of this market, and put in place the essentials to underpin growth, India can be a market full of opportunity.
This article featured on NZTE Blog. To read the entire article, please follow the link https://www.nzte.govt.nz/about/news/blogs/india-on-the-rise