Invincible India: Conveying the Growth Story to U.S. Companies – Day 1 at APBOMarch 26, 2012
This story is part of an ongoing series highlighting the information available to participants in the 2012 Asia Pacific Business Outlook (APBO)
Aileen Crowe Nandi is a Commercial Officer on domestic assignment at the Silicon Valley Export Assistance Center. She most recently spent five years in India, serving in Kolkata and Chennai, managing CS South India’s operations in Chennai, Bangalore and Hyderabad.
Borrowing from the Indian Government’s ubiquitous tourism campaign touting “Incredible India,” after five years of witnessing unprecedented development and booming trade ties, when our exports to India nearly doubled from 2005-2010, I view the country’s rise as “Invincible India.” Seemingly impervious to the world’s economic woes, the Indian economy has boomed with impressive annual growth rates averaging around 7 percent the past decade. With a sizeable middle class, India boasts strong projected growth rates for the foreseeable future. Its momentum alone puts India in a league of its own.
Yes, there is antiquated infrastructure. (In fact, I am participating in APBO because Senior Commercial Officer Judy Reinke will be hosting the Secretary of Commerce, John Bryson, who is accompanying 25 U.S. infrastructure companies to India to explore joint opportunities). Additionally, bureaucracy and /red tape, lack of access to credit for Indian small and medium businesses and abysmal contract enforcement (India ranks 182 out of 183 countries, according to the World Bank) all remain obstacles for U.S. exporters. On a brighter note, however, India is the U.S. Export-Import Bank’s second largest market after Mexico.
Yet India is not for the faint of heart. I often advise U.S. companies to think of the 3 Ps: price, presence and patience. Price often ranks as the key factor whether any given product or /service would prosper in India. Moreover, India is still a face-to-face society and U.S. firms must make the commitment to visit and meet potential partners. Finally, U.S. companies are not encouraged to view India as a market to make a quick sale. It can take longer to clinch deals in India vis-à-vis other countries.
Given India’s size and differentiating regions, we encourage some U.S. firms to take a regional approach to enter the market. Also, U.S. exporters must look beyond Delhi and Mumbai to identify opportunities and potential partners: India’s 2nd and 3rd tier cities (some with populations of 2-3 million) have dynamic growth as they build hospitals, enhance infrastructure capacity and formalize their retail networks.
In fact, India’s explosive growth in the retail sector was the most visible development I saw during my tenure, with sleek malls and organized retail outlets dominating over the fractured, informal retail venues. Young Indians, who tend to live at home until they get married, now have high levels of disposable income, creating opportunities for consumer goods, franchises, entertainment and other industries. Additionally, Indians have increasingly sophisticated tastes and will pay a premium for branded, or even luxury, products. Indian consumers, though they save much more than their U.S. counterparts, lure U.S. companies to seek new channels in the subcontinent.
Indeed, opportunities in India continue to beckon U.S. firms. While the airplanes, the defense sales and the large energy projects make headlines, and fortunately U.S. firms have been at the forefront of these industries, U.S. companies are steadily making inroads in many areas: healthcare, green building, franchising, education and much more. India represents a market where the President’s National Export Initiative thrives and U.S. exports are poised to double again. Your competitors will be there – you should be too.