Developing an International Business Strategy for India and China
With limited opportunities to implement a growth strategy in western markets due to the uncertainties in the domestic marketplace, many American and European executives are finding that they can succeed in overseas markets. India and China have vast populations and a growing middle class that desires western-made products. China’s manufacturing capabilities have been on the increase for decades while India’s service industries have made tremendous gains. Today, China is increasing its services sector and India is making strides in manufacturing.
According to a National Bureau of Economic Research report, India has more than doubled their GDP per capita since the 1980s. In that same time frame, China has experienced a 7-fold increase. These two countries also make up over a third of the global population and, “They have achieved remarkable rates of economic growth and poverty reduction.” Poverty reduction is creating a huge consumer class with sufficient disposable income to purchase western products. And their educated workforce, with some having been schooled in the west, can offer opportunities for American companies looking to expand on their international business strategy.
Notes on How to Develop an International Business Strategy
- Preparation is Key. What works in the domestic market may not be viable in India or China. Define your goals and work with consultants that are familiar to the region in order to reach those targets. Seek out joint venture opportunities, the viability of R & D and product development divisions, product placement, or supplier capabilities. Do your homework upfront, you’ll be glad you did.
- Currency Fluctuations. The U.S. greenback does not go as far as it once did. It is wise to consider the potential of currency fluctuations and the impact it can have on a deal or on your ongoing success. Short term fluctuations can be “hedged” but be ready for long-term shift in currency rates as well.
- Export Goods or Manufacture In-Country. Exporting products to India and China may result in additional costs such as import taxes, excise tax, and logistics expenses. As the number of knowledge workers in these countries’ expand, it may be beneficial to manufacture where the consumers are located.
- Sourcing Products. Consultants that specialize in sourcing and logistics can provide an invaluable service for those companies looking for low-cost providers.
A global economy is rapidly becoming the norm and those executives that can adapt quickly will capitalize on this expansion. There is a wealth of opportunities available in India, China, and around the world. A well-thought international business strategy is critical to the long-term success of American, European, and Global business.
We hope that our Doing Business in India Guide will help answer some of the routine questions we get asked. Please Contact Us if you need more in-depth assistance when looking to do business with India. We’ll be glad to help.
Last updated: June 18th, 2021
