Hot tips on opening operations in India
India’s an attractive place to set up business operations. But it’s not something to be done without considerable planning.
India holds promise for many companies. Its huge population and growing middle class are a huge potential market. That population is fairly skilled yet the cost of labor is low making India an attractive place for many companies that want to establish manufacturing operations in Asia.
Gunjan Bagla founder and managing director of Amritt Ventures has been writing and speaking about the Indian market for years. He also wrote a book on the topic Doing Business in 21st Century India.
Bagla will be speaking at the IPC EMS Management Meeting which will take place April 11 2011 at IPC APEX EXPO in Las Vegas. We spent some time with him to get a preview.
What are some of the major points that companies need to consider before setting up operations in India?
First the company needs to determine if setting up operations in India is indeed necessary. With guidance some companies can setup a virtual presence via a deep and tight relationship with an existing company and save themselves the overhead of establishing their own entity.
The next step is to determine the immediate and projected scope of the operation. Some operations but not all are better located in a special economic zone. Since transport can be an issue some companies need to establish multiple locations in India for customer or market proximity.
Number three India is a complex country so it is important to engage expert guidance from a company or individual who has current experience in getting foreign companies established in India.
Number four it is crucial to hire the right people to lead the Indian operation. A successful person can be a local an expatriate or a returning Indian. They must have the ability to inspire Indian employees engage with government officials and communicate effectively with the parent company. Finally it is worth looking at the idea of the Indian location serving regional markets in South Asia and beyond.
Please provide insight on languages that foreign employees should try to learn if they’re going to spend any time in India.
Since there are so many languages in India it is common for professionals from different regions to communicate with each other in English. Indians do use a peculiar form of English peppered with local language words and some English words that are unique to India annexure prepone brinjal. I recommend that readers visit www.amritt.com/IndianEnglish.html for a glossary of unusual terms.
A few words of Hindi such as Namaste a greeting Kaise Ho how are you? and Shukriya thank you are appreciated but not required. Communication with local Indian workers often requires knowledge of the regional vernacular which could be Gujarati Tamil Kannada Hindi Malayalam or another language.
Please provide a bit of insight on dealing with government officials for licenses and other requirements.
India’s dreaded red tape and bureaucracy has improved considerably since liberalization began in July 1991. Still the process is still too arcane for most foreign companies to deal with on their own. Hiring local experts is virtually essential. Companies need to deal with some federal and many state officials and a few local/municipal people as well.
Are there any issues or concerns for people who are hiring native employees?
Adequate training of junior employees is a key requirement. Workers are readily available. But without proper training obtaining high quality and consistent performance can be a challenge.
Any tips on dealing with travel?
Train travel in air-conditioned class is a reasonable way to make journeys of 500 kilometers or less Mumbai to Pune Delhi to Agra etc.. If people need to travel some distances by road I recommend the use of larger vehicles for safety. You almost always want to rent a car with a driver. For longer distances within India we recommend that our clients fly only on Jet Airways Kingfisher and Indigo.
Though there are many challenges the potential benefits of operating in India make the effort well worthwhile.
by Terry Costlow IPC editor
