opportunities challenges in the indian market

7/25/2019 Opportunities Challenges in the Indian Market

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Opportunities & Challengesin the Indian Market:Lessons learned from Dutch Companies in India


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I2 I Doing business in India

//

INDIA

Facts & Figures

source: CIA factsheet

//POLITICAL

Ocial name:Republic of India;Bharat Ganrajya

Independence15th August 1947 (fromBritish colonial rule)

//GEOGRAPHY

Religion:Hindu 80.5%,Muslim 13.4%, Christian2.3%, Sikh 1.9%, Others1.8%, Unspecifed 0.1%(2001 census)

Literacy: 61%Male: 73,4%; Female: 47,8%(2001 census)

Location:Southern Asia, borderingthe Arabian Sea and theBay of Bengal, betweenBurma and Pakistan withNepal, China and Bhutan inthe north

Population:1,220,800,359(July 2013 est.)Growth:1.28%(2013 est.)

Area:Total: 3,287,263 sq km

Languages:English(business), Hindi 41%, Bengali8.1%, Telugu 7.2%, Marathi7%, Tamil 5.9%, Urdu 5%,Gujarati 4.5%, Kannada 3.7%,Malayalam 3.2%, Oriya 3.2%,Punjabi 2.8%, Assamese 1.3%,Maithili 1.2%, Others 5.9%

Urbanization:Urban population:30% (2010); rate ofurbanization: 2.4% annualrate of change(2010-15 est.)

Import: $500.4 billion(2012 est.); Commodities:Crude Oil, Precious Stones,Machinery, Fertilizer, Ironand Steel, Chemicals.

Composition per sector:Agriculture: 17.4%,Industry: 26.1%,Services: 56.5%(2012 est.)

//ECONOMY

GDP (PPP):$4.761 trillion (2012 est.)

Current account balance:-$80.15 billion(2012 est.)

FDI Investments:US$ 27,3 billion (2012)

GDP/Capita (PPP):$3,900 (2012 est.)Growth:4,7%(13 14, Worldbank est.)

Export partners: UAE12.3%, US 12.7%, China 5%,Singapore 5%, Hong Kong4.1% (2012)

Import partners:China11%, UAE 7.7%, Saudi Arabia6.7%, US 4.9%, Switzerland5.9% (2012)

Export:$298.4 billion(2012 est.); Commodities:Petroleum Products,Precious Stones, Machinery,Iron and Steel, Chemicals,Vehicles, Apparel.


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I3 IDoing business in India

//

Contents

Introduction ..........................................................................04

India: An Overview ................................................................06

Case Studies ..................................................................08-23

Rijk Zwaan India Pvt. Ltd...................................................................................................... 8

NTL Lemnis India Pvt. Ltd. ..................................................................................................10

Q.I. Press Controls India Pvt. Ltd. .......................................................................................12

Metaex Doors India Pvt. Ltd..............................................................................................14

CoMakeIT Software Pvt. Ltd.................................................................................................16

THEY India ...........................................................................................................................18

Danieli Corus India Pvt. Ltd.................................................................................................20

Incotec India Pvt. Ltd...........................................................................................................22

India Business Advice ............................................................24

Conclusion .............................................................................29

Doing Business in India .........................................................30


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//Int

roduction

The Indian market has immense

potential and lots to oer to

entrepreneurs in The Netherlands. The

second most populous country in the world

is undergoing a transition, both in terms of

investor perceptions of its market potential,

and in reality. The Indian economy is

registering around 6% growth amid uncertain

global economic conditions. The number of

people in the Indian middle class is set to

treble over the next 15 years, implying a

signicant impact on disposable income.

Domestic demand is expected to grow at a

compound rate of 9.2% per year between

2010 and 2030, creating opportunities for

many industries.

Indias economic liberalization began in the

early 1990s and has accelerated ever since.

More and more sectors are being opened up

for foreign direct investment. Recently, the

Indian Government decided to open up the

multi-brand retail sector as well. This will

create huge opportunities for Indian and

foreign companies and consultants involved

in agriculture, retail and infrastructure in the

cold chain logistics sector.

Attracted to these ever growing

opportunities, many companies have already

come and are expanding their business in

India. Indian companies themselves have

become more and more active in the world

market as well, through acquisitions of

foreign companies to leverage them to

develop their own business at home or as an

entry point for the lucrative markets they are

targeting abroad.

In that sense, the country is no longer only

an emerging market for foreign investments

but has become a signicant player in the

world economy itself.

Its not only market opportunity that attracts

companies. India is known for its highly

skilled labor force which speaks English and

is well informed about western culture and

society. Which is why many western

companies transfer parts of their activities to

India and more and more western

multinational companies are setting up their

R&D facilities in India to benet from the

abundance of young and highly educated

professionals. Being centrally located in

South Asia, India enjoys an advantageous

position for doing trade with other South

Asian countries, Australia and the countries

of Africa, the Middle East and the Far East.

Combined with the huge domestic market

and the pool of well-educated young people,

India might very well function as a hub for

business activities all around the region.

But, its not always easy to be successful in

the Indian market. Particularly for rst time

investors, it is hard to fully understand the

process of investing or prospecting business

opportunities in India. These diculties may

lie in the fact that the Indian market is large

and yet as complex as many small markets,

The Indian market has immense potential

and lots to oer to the entrepreneurs in

The Netherlands.


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//Int

roduction

the business culture might be dicult to

understand and dealing with several lengthy

procedures and complicated regulations can be

tough for foreign companies.

But there are a number of success stories to be

told of Netherlands based companies with

growing and protable businesses in India.

These stories are interesting for newcomers.

They can reveal some insights into how they

managed to set up their business, the problems

they faced and how they succeeded in

overcoming them. These stories will tell you that

sustaining success in India requires a long-term

approach and a reasonable threshold of

enterprise size and investment levels. But most

importantly, remember: to be patient, adapt and

it will pay o in the long run.

In this light, it is with pleasure that I introduce

this booklet with appealing and substantive

examples of eight Dutch companies from

diverse sectors which have not only

established a strong foothold in the Indian

market but have also had a satisfactory

business performance. These include (in

alphabetical order) CoMakeIT Software Pvt.

Ltd., Danieli Corus India Pvt. Ltd., Incotec India

Pvt. Ltd., Metaex Doors India Pvt. Ltd., NTL

Lemnis India Pvt. Ltd., Q.I. Press Controls India

Pvt. Ltd., Rijk Zwaan India Pvt. Ltd. and THEY

India.

The booklet oers you insights on their

strategies and best practices towards

overcoming specic challenges during their

India journey. Apart from that, the booklet also

provides a useful checklist of India Business

Advice, which can serve as a guide for your rst

steps in the market. If you need more

information or if you want to seek support, you

can refer to our doing business section (zaken

doen) on our website: www.hollandinindia.org

I hope this booklet will turn out to be a useful

tool in setting up your business or expanding

into India. And of course, The Netherlands Trade

Network in India, with oces in New Delhi,

Mumbai, Chennai, Hyderabad and Ahmedabad,

is at your service and looks forward to assist you

in your quest on the Indian market.

Alphonsus Stoelinga

Ambassador


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Located in South Asia, India supports over 16% of the worlds

population and around 2.4% of the worlds land. It is the conuence

of many religions and ethnicities, which has shaped the countrys

diverse culture.

India's Real GDP growth (in percent)

0

2

4

6

8

10

5.8

3.8

1 2 3 4 5 6 7 8 9 10 11 12

8.5

7.5

9.4 9.6 9.3

6.7

8.4 8.4

6.9

5.5

12

/ / Economic OverviewSince the adoption of the economic

liberalization policy in 1991, India has

grown to become a USD 1.3 trillion

economy with a largely self-sufficient

agriculture sector, a diversified industrial

base, and a stable financial and services

sector. Real GDP growth averaged at 8.8

percent between 2003 & 2008, witnessed

a minor slump in 2008-09 and recovered

to 8.4 percent during 2009-11. Albeit with

a few concerns in view of the current

global economic uncertainty in the US

and Europe, the Indian economy managed

to grow by 6.9 per cent in 2011-12 and

remains among the front-runners in

terms of cross country comparison.

/ / India AdvantagesWith a population of just over 1.21 billion,

India is the worlds second most populous

country, after China. Indias burgeoning

middle class which is expected to swell

from the current level of 31.7 million

//India:An

overview


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households (160 million individuals) to

53.3 million households (267 million indi-

viduals) by 2015-16,has been one of the

major attraction points, owing to its high

purchasing power. This segment, having

rising disposable incomes and showing

greater acceptance of western culture,

lifestyles and products, and strong demo-

graphic advantages will continue to fuel

Indias growth in years to come. Nearly

31% of the Indian population is less than

15 years old, and with a median age of 25

years, India has an estimated 600 million

young people below 25 years the future

workers of the world. Additionally, the

country also has a large pool of technical

manpower which presents opportuni-

ties for industries looking to deploy

technical talent on a large scale. With this

demographic advantage, India has the

potential to become the economic engine

of the world in the future by contribut-

ing the largest work force to the global

economy.

Not to forget, India also acts as a hub

to the rest of South Asia owing to its

advantageous geographical position and

connectivity to other South Asian countries,

Australia and the countries of Africa, the

Middle East and the Far East.

/ / India ChallengesIndia presents lucrative business op-

portunities, but both foreign and domestic

enterprises face formidable challenges in

conducting their businesses here. India is a

complex market due to regional diversity,

large rural-urban divide, dominant unorga-

nized markets and multiple legal and admin-

istrative systems. Furthermore, a complex

bureaucracy and lack of proper infrastructure

facilities magnify these challenges.

The biggest challenge that most multination-

al companies face is the Indian governance

framework, which is intertwined between

the Central and State structures. The com-

panies face several complex bureaucratic

procedures and are forced to comply with

both state and central rules and regulations.

Moreover, duties and levies undergo frequent

revisions during the Annual Central and State

budget exercise. These factors are the major

reasons why many Dutch companies indicate

dealing with regulations and procedures as

one of the major challenges.

A checklist of business advice featured in

a subsequent chapter facilitates an under-

standing of the cultural and professional

dierences of working with and in India

and can serve as a useful guide for poten-

tial Dutch investors eyeing India.

Indias Demographic Dividend

0

200

400

600

800

1000

1200

1400

2000 20052010 2015 20201991

1991 - 2020

20-59 yrs Total Populat ion

By 2025

India will be the most populous country,surpassing China

India will have the worlds youngestpopulation, whereas China, Japan and EU willhave ageing population

India will have the largest working age groupsin the world- 700 million work force.

India will shape lifestyle consumption trends

1. Source: National Council for Applied Economic Researchs (NCAER) Centre for Macro Consumer Research


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W

e are where our customers are:

all over the world. That is how

we know the local situation, the

climate, the crop, the harvest and the sales.

And that is also how we can make progress

in our business, together with our partners.

The groups philosophy also gets reected

in the India marketing strategy wherein

their aim has been to provide seeds and

services to all states of India through its

distributor and agent network. The group

specializes in breeding production and

sales of vegetable seed for the professional

growers market worldwide, and is among

the top 5 largest vegetable breeding com-

panies in the world.

Being active in the Indian market for the

past eight years as a supplier of Gherkin

varieties to the Gherkin processing

industry, Rijk Zwaan International before

establishing a legal entity in India, had ac-

curately studied the Indian agriculture sec-

tor, and assessed the demand for its seed

varieties and the need for new technology

and methods for producing high yielding

crops. Following their initial success with

Gherkins, the Dutch vegetable breeder

wanted to be an active player in the Indian

vegetable seed market and oer a whole

assortment of other products, for which it

set-up its 100% subsidiary in India in 2010

with the intent of collaborating with the

Indian distributors and commencing R&D

operations locally. They realized that to

be highly successful in India, its essential

to have a local representation through an

Indian rm which is managed by a group of

local people.

According to the rm, the Indian market

is not only characterized by its huge

market potential, but also by the large

number of small vegetable nurseries and

a convoluted supply chain in the sector.

Rijk Zwaan India Pvt. Ltd.// Agriculture

//CaseStudies

India for us is a very important growth market attributableto the growing middle class population. This section ofthe population aspires for food safety in the vegetablesalong with good international quality levels. That

movement creates a bigger and bigger market for RijkZwaan in India.

Blend in the Indian knowledge and Indian approach withyour own experience and product expertise, thats really the way togo in India.

What we realized is that to be successful in India you need an Indianorganization and you cannot do that from Holland. Since each statehas dierent requirements, having a local representation and localteam is imperative.

Hans Bouman, Area Manager, Export Department, Rijk Zwaan


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In The Netherlands, the rm is accustomed

to dealing directly with the growers while

in India, given its sheer size and a wide

dispersion of vegetable growers across

the length and breadth of the country, the

distribution chain is bound to become more

layered. As a result, their approach in India

has been to ensure a local presence in mostly

all the states- in some cases direct and in the

rest, through distributors which helps them

in marketing and distributing products. By

craftily developing a distribution network, the

company has kept the lines to their customers

as short as possible. Moreover, in order to

avail maximum benet from the chain, they

are right at the heart of a crop to assess how

it is doing and also on the shop oor to see

how their varieties perform on the shelves.

For them, gaining a profound understanding

of their customer needs i.e. assessing why the

grower is growing their seeds and to whom

will he be selling, is highly critical.

Besides the customization of their marketing

strategy, the rm also accounts building

strong contacts and a blend of Indo-Dutch

professionals as the critical factors behind

their success in the country. Since the

establishment of the subsidiary, they have

been able to foster market relationships,

which were instated during their early years

and develop new contacts with independent

growers, growers associations and large pri-

vate-sector conglomerates in the retail chain.

In addition, having a mix of Indian and Dutch

management where the former brings sound

local knowledge and the latter, enormous

ground experience has helped in boosting

their penetration in the Indian market.

A good market segmentation strategy

enables a rm to signicantly improve

marketing eectiveness. In the case of Rijk

Zwaan India, the company has been selec-

tively targeting its product to companies

who value premium and international level

quality. Realizing at an early stage that their

products are meant for a minor percentage

of the total market and diverting all eorts

and focus in the higher value market, has

been Rijk Zwaans way of going about in

India. The company is currently focusing on

expanding its operations in order to be able

to oer more services for India and from

India. The company also claims that provid-

ing services such as informing the customer

regarding technical guidelines, oering con-

sultancy services and troubleshooting kits, in

addition to sale of seeds has been one of the

dierentiating aspects of the company.


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NTL Lemnis B.V., a forerunner in the

eld of sustainable lighting solu-

tions based on LED technology, be-

gan its journey into India as a wholly owned

subsidiary as recent as February 2011, with a

vision to enable the transition from current

wasteful lighting solutions towards energy-

ecient alternatives.

For the LED-maker, the decision to set up a

manufacturing facility in the country came

as a result of a major contract awarded

to the rm which required production of

cost-ecient LED lamps, following which

the company began hunting for suitable

opportunities of forming a synergistic

strategic alliance with a supplier who is

backed with a sound technical know-how.

The company proactively selected India

over China to set up its manufacturing facil-

ity owing to better compliance with quality

standards, socio-economic directives and

labor related factors.

Once they found the Indian companies suit-

ing their requirements, NTL Lemnis made a

rm call to step its foot in the Indian market.

The magnitude of the domestic market

potential and the relative fewer limitation

of setting up a manufacturing facility as

compared to China, further encouraged NTL

Lemnis to choose India.

NTL Lemnis was rst enlightened about

the opportunities in India through a market

scan of the Indian lighting industry that was

undertaken by The Netherlands Embassy in

New Delhi in 2008. This scan was executed

with some very important principles of NTL

Lemnis in mind. First of all, the potential

partners needed to have the same DNA

when it comes to sustainability. So a strong

match of values like the quality of life, HR

principles and the environment needed

to be in place to enable a fruitful coopera-

tion. Apart from these principles, a proper

infrastructure, the availability of skilled

engineers and an existing supply chain were

essential variables in their decision making

process. The Embassy did a good job in this

and proposed some interesting contacts

and helped NTL Lemnis in getting a rm

NTL Lemnis India Pvt. Ltd.// Lighting

India moves at its own pace. For us it was quite dicultto move faster than India allowed us. For a foreigncompany to do investments in India, bureaucracy andall the regulations is a limiting and a risk factor. Hiring

a local consultant knowledgeable in all disciplinesexpedites the process.

In India, the spending level of an average consumer is notmuch and the type of product we make is premium. To really enterbig time, we had to work towards cost reduction and to some extentwe made this possible by making product design changes.

Jeroen van Velzen, Project Director

//CaseStudies


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grip on the Indian market. In relation to this,

the company recalls the Embassys invalu-

able assistance in recommending a local

consultancy rm to them, and a professional

management consultancy rm, that assisted

them right from the incorporation of their

India entity - NTL Lemnis India Pvt. Ltd. to

arranging all statutory approvals and clear-

ances for their operations and premises.

It is a very tiresome and time-consuming

business arranging all the dierent permits

with dierent organizations yourself. Unfor-

tunately, the concept of a one stop shop is

still relatively unknown. Hiring a consultant

to arrange all these permits can save a lot of

time and frustration.

NTL Lemnis would describe its India

business performance as somewhat

satisfactory because of the sluggish and

complex red tape which limits companies

to move as briskly as they would like to.

It needs a lot of creativity and good trust

to move quickly. NTL Lemnis, for example,

had to nd a temporary solution for the

directive in Indian law that requires every

Indian registered rm to at least have one

certied director. This was something that

NTL Lemnis didnt have. In good faith, it

came to a solution together with their

consultant and appointed one of them for a

limited period of time till all arrangements

had been made. This needs a great deal

of insight and above all trust, since the

director is personally responsible for the

company. Apart from the red tape endured

in the setup phase, market conditions

because of low spending capacity of the

average Indian buyer for premium products

like that of NTL Lemnis, still need to gain

momentum and need signicant modica-

tion and localization in order to reduce

costs and thus attain greater acceptance

levels. Furthermore, the company reckons

that procedures for obtaining licenses

for exports and imports are not only time

intensive but also entail huge costs which

have a direct bearing on its bottom line. As

a result, the company has ventured upon

altering its product design and is under-

taking process improvements in order to

reduce its costs. Regarding expediting the

approvals process, the company regards

roping in a specialized and knowledgeable

consultant as the prudent measure. Having

claimed that, after witnessing rocky times

in the beginning, the company has been

able to make its operations live, by recruit-

ing the right people and partnering with

the right team and hence currently enjoys

its position of having attained the desired

production level.


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The Q in Q.I. Press Controls India Pvt.

Ltd., the company that deals with

the development and manufacturing

of automation and control equipment for

printing press, not only refers to the quality

of their products but also to the quality of

cooperation and application of their prod-

ucts. The company, which caters to all the

top newspapers and magazine print houses

of the country, has over 50% market share

and is among the top three companies in

this sector.

Q.I. Press Controls, with eight oces

around the world and an employee base

of 150, is represented in India by its wholly

owned subsidiary Q.I. Press Controls India

Pvt. Ltd, which was incorporated in 2004.

Given the technical and highly complex

nature of their products, entering into

India as a wholly owned subsidiary was the

ideal move. Additionally, the products and

market catered by Q.I. Press Controls are

service oriented and having a fully owned

subsidiary gave better exibilities to the

company to serve its customers on the

spot. Operating on a model based on hired

agents or dealers could not have produced

desirable results as the product requires

to be regularly showcased to show its

added value and demands ownership for

continuous engagement with the customer

for creating prolonged demand. High

import duties and time consuming import

procedure initiated the decision to set up

a subsidiary in Ahmedabad, a logical thing

to do. Apart from that, cost eectiveness

and the knowledge that a local presence is

necessary to counter the well-established

competitors, added to the idea that local

manufacturing had to be realized. Together

with the interesting prospects of the mar-

ket, the company that initially started as a

sales and marketing oce, decided to set

up a manufacturing plant in Ahmedabad,

its second only after the headquarters.

The companys business performance in

the country is highly satisfactory because

of three specic oerings by the Indian

market: 1) cost eectiveness when com-

pared to its manufacturing in The Nether-

lands, 2) a highly skilled workforce and 3)

a promising 12-15% growth of the Indian

printing industry. The strategies adopted by

the company have already assured success

Q.I. Press Controls India Pvt. Ltd.// Printing & Publishing

Sometimes, European companies feel that they shouldhave more control over their India operations. But,selection of right people with adequate experience,and putting condence into them is key.

Indians prefer working with Indian representativesand feel the comfort zone of conversing in their nativelanguage. Thus, hiring a local representative heading yourIndia operations is critical to survive here.

Vijaykumar B. Pandya, Managing Director, QIPC India

//CaseStudies


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at an early stage. To begin with, the com-

pany considered Ahmedabad, which enjoys

the reputation of being a straightforward

and business minded region, as their ideal

location for manufacturing, which has

helped them maintain their infrastructural

and other operational costs at a minimum.

Additionally, the selection of the right

people to manage its India operations has

contributed greatly to this early success. To

do so, Q.I. Press Controls had identied the

core management team by pulling them

from the same eld to add the adequate

experiences necessary to set up the busi-

ness. The core group has then developed,

within the company, a very conducive work

culture which lays equal emphasis on work

freedom, work satisfaction and attractive

salary. This has created a dedicated team

whose experience in the graphic eld

of India in sales and servicing of quality

control equipment for printing presses

and a strong customer relationship helped

them gain swifter access to the markets. As

a result, the Indian managements familiar-

ity with the northern region helped the

company to secure contracts from major

publishing houses such as Dainik Jagran,

Bhaskar and Amar Ujala groups as well as

the renowned press manufacturer like The

Printers House Pvt. Ltd.

When setting up a company in India, cultur-

al dierences appear. Q.I Press Controls in

The Netherlands took care of these dier-

ences by ensuring that the management of

her daughter company should have enough

freedom to determine their own course and

take their own decisions along with enough

checks so that the vision and mission of

the company did not get overlooked.

As the company grew with experience, it

found new avenues to further reduce its

operational costs. The company known to

deal in embedded products, having a mix

of hardware and software components,

was investing a large sum in software

development at its home base. Realizing

Indias enormous potential in software

development and abundant availability of

an ecient talent pool, Q.I. Press Controls

scouted for software companies in and

around Ahmedabad for outsourcing their

software development business. Within

one year of outsourcing, the management

discovered that building up an in-house

software development team in India could

prove to be a more practical and a cost

ecient alternative. Following this, the

company formulated a small software

development team in India which is being

regularly backstopped by The Netherlands

research team and resultantly, the group

has already noticed a drop in its product

development costs.

Q.I. Press Controls eventually aims to

become a leader in oering specic and

structured solutions with the main goal of

helping the printing industry in decreas-

ing the use of materials and increasing

quality and eciency. To achieve this, Q.I.

Press Control plans to introduce more

products developed by the company in

the Indian market and expand its business

horizons in neighboring countries to India.

Internally, the Ahmedabad branch plans

to support and increase manufacturing

capacities in India for her parent company

and create software development re-

sources to support the R&D department of

the Principal company.


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Metaflex Doors India Pvt. Ltd.

(MDI) is a subsidiary of a Dutch

company in Aalten, The Nether-

lands. It develops, manufactures, installs

and services a wide range of specialty

doors for the cold chain, warehousing and

industrial applications as well as pharma-

ceutical and healthcare. The initiative in

2006, to start manufacturing cold storage

doors in India was triggered by the Indian

need to improve the efficiency in the food

supply chain through proposed liberaliza-

tion of Foreign Direct Investment (FDI)

in the retail sector. While India features

amongst the worlds top producers of

fruits and vegetables, without a proper

functioning cold chain, a huge potential

is lost.

In 2006, Indian entrepreneurs like Reliance

Fresh, Spencers Retail, Food Bazaar, Na-

tures Basket, Spinach, Tata all were aiming

to expand in the food retail business.

Icrier, an Indian Think Tank, published

several positive papers about opening

retail for FDI and the government seemed

positive to move forward.

Metaex entered the Indian market at this

time when there were no real local com-

Metaex Doors India Pvt. Ltd.// Door Manufacturer

In April 2006, organized retail was penetrating India in abig way. Reliance Fresh announced big plans to open2.500 retail stores throughout the country within3 years. One of our clients ordered 200 doors, to be

delivered from our new factory in India. But we had nofactory yet and did not expect to be operational beforeOctober. However, Indian customers dont take no for ananswer. The client wanted it his way and was prepared topay for the airfreight of the components. Assembly could be doneon site. Of course, prices were based on the Indian price list. Thegoods were air freighted in May and only assembled in October.The work of our client got delayed.

The big dreams of Indian retailers abruptly vanished when Gujjarsin Uttar Pradesh burned tires on the main roads around New Delhi

in September 2007. MDI had just rented a factory near Delhi aftera 3 months search. Reliance Fresh and other retailers had ociallicenses to operate their stores, but the riots scared the hell outof them. Populist politicians ordered them to close their storesimmediately. It had a severe impact on the (short term) investmentpotential in (organized) retail. It felt like we were struck bylightning. India fell from the top position as the most attractiveretail destination in AT Kearnys Global Retail Development Index ,2007 to a fth position in 2012.

Peter G.M. Ruigrok, MBA, Director

//CaseStudies


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petitors and the market had just started

to develop. Additionally, the sheer lack of

knowledge about and appreciation in the

Indian market of hermetically designed

doors technology and steep competition

from Italian and Chinese counterparts

oering low price products attributable

to weak designs and low safety levels im-

pelled the company to adopt a penetration

pricing strategy. To develop the demand

for more high-end, better quality products,

the company organized road shows, forums

and attended congregations of food stor-

age owners.

This strategy meant the company imported

and sold their products at below-cost levels

in order to induce a purchase. This endured

till the establishment of their own produc-

tion unit in 2010 and local manufacturing

started.

Above all, Metaex feels the strategy to

provide a Dutch quality product, manu-

factured, in India; eventually turned out to

be a good approach. Very soon, the Indian

customers were pushing us to expand our

product range. Already manufacturing

a good portion of the range in India, at

quality levels that meet European levels,

Metaex decided to import components

that would enable it to assemble doors in

India that were not yet widely used in the

market, such as sectional overhead doors,

door levelers and dock shelters. For these

products it forged strategic alliances with

the top quality suppliers in Europe.

After more than 5 years since inception,

Metaex sees light at the end of the tun-

nel. It has established its market position,

but its mission is by no means completed

yet. Metaex is inching towards a break

even and expects to be in the black in FY

2012 - 2013. It has paid its dues and learnt

its lessons from the start up in India.

Things might have turned around quicker if

the Indian Government would have liberal-

ized and thus approved the FDI in multi-

brand retail much sooner, like anticipated

by Metaex. Regardless, the company has

established a strong foothold in the market

that currently corners over 35% market

share in the specialized door market. Fu-

ture prospects are more compelling given

that one hurdle has been crossed and

these changes in Multi-brand retail FDI will

eventually happen. And once it happens,

they will be there.

India is a beautiful country. While many

people like it, some hate it. Because many

educated Indians speak English and have

travelled the world, a connection is easily

made; but that first impression might fool

you. The Indian culture is very different

from the Northern European culture and

must be fully understood when investing

in this so-called vast opportunity. Apart

from the cultural difference, one needs

to understand that India is a country

where things tend to move slowly. The

realization that successfully entering the

market will need a lot of time, effort and

a lot of perseverance is important to cul-

tivate. But, when a successful entry in the

market is achieved, the gains are there in

this huge and continuously developing

market. So remember, if youre looking

for a quick win, dont come unless youre

completely sure you will succeed.

If you want opportunity toknock, build a door. We builddoors.


16/32


Choosing the appropriate oshore

model is quite a challenge, and

making sure that the model is imple-

mented properly compounds this challenge.

CoMakeIT has successfully faced both

these challenges and emerged as preferred

product development partner for many

companies. CoMakeIT is headquartered in

Harderwijk, The Netherlands, with their de-

livery facility in Hyderabad, India. CoMakeIT

is dedicated to partner with Independent

Software Vendors (ISVs) in their growth and

sourcing strategies by providing most spe-

cialized software R&D services in the world.

Equipped with a relatively young, well

educated workforce with a strong will to

succeed, Hyderabad made an interesting

location for CoMakeIT to establish her

subsidiary. Apart from this, Hyderabad has

a historic angle to IT investments from The

Netherlands with Baan Company being

the rst software product company from

Holland to have setup a 100% subsidiary

in Hyderabad. This has given rise to more

software product companies around the

globe to look at Hyderabad, as a viable and

positive option to expand their operations.

Microsoft, for example, has their largest R&D

centre in Hyderabad next to Redmond, WA.

The coordination between the locations

has been balanced perfectly with the sales,

business development, customer engage-

ment and accounts being handled from The

Netherlands, and the software product de-

velopment being implemented by the Indian

subsidiary. This division has eectively man-

aged to attain a 30% year-on-year growth

over the past few years. The company has

grown from a meagre sta of 17 in 2006 to

the present the adcount of 200 employees.

The recent tie-up with a Danish company is

expected to add another 200 employees to

its human resource base over the coming

years.

CoMakeIT believes demand driven

innovation is the way to go, by linking the

power of creativity and entrepreneurship

in The Netherlands with capacity and skills

available in India. In a way, CoMakeIT has

brought India closer to the Dutch software

product market. With a majority of the

CoMakeIT Software Pvt. Ltd.// Software Services

A highly procient talent pool backed by strong academicbackground and elaborate experience has been one ofthe foremost reasons why foreign companies look atIndia and will continue to look at India for o shoringopportunities.The Dutch are inherently more creative and they arealso outgoing but only when there is trust. The only wayto gain their trust is by showing how much you understandtheir business or how you can integrate into their business.So, for us, the two tools were transparency and trust that hasdierentiated us from the rest.

Kiran Madhunapantula, Chief Operating Ocer, CoMakeIT

//CaseStudies


17/32


students in the Netherlands opting for

diversied elds other than IT, there has

been a shortfall in the number of software

professionals. In this scenario, CoMakeIT

has been able to boost the innovative

potential in the Netherlands by contributing

with equally good intellectual capital,

abundantly available in India.

Business Potential In India

The Indian subsidiary of CoMakeIT is the

hub of its operations. The subsidiary is the

engine for scalability, cost eciency and

productivity that makes CoMakeIT B.V add

real value to its customers.

Some highlights:

CoMakeIT rst came to India not

to serve the Indian market but to serve their

customers in The Netherlands, which has a

mature ISV market, consisting of over 300

product development companies in com-

parison to only 50 in India.

Realizing a huge potential in the

Dutch market, the parent company began

o-shoring its software R&D business to

India.

CoMakeITalso serves as the launch

pad for sales and marketing for Dutch soft-

ware companies to sell their products in the

Indian market.

Although the key business of CoMakeIT

is to provide software R&D services, its

customers have shown interest in penetrat-

ing in the Indian market as well. A case in

point is InnoVites, a Dutch company that

produces software for cable manufacturing

companies.

The core management team of CoMakeIT-

brings to the table over fteen years of

experience in setting up and managing

distributed softwareR&D companies in

India. The company believes that true value

addition is generated only if the cooperation

between them and the customer is imple-

mented as a partnership. To do so, trust and

transparency between the two are essential.

These two vital aspects have been the com-

panys major dierentiating factors when

compared to its competitors. For CoMakeIT,

employees are not just resources to be used,

but they form a capital to be invested in. The

companys practice of sustainable human

capital development has not only helped

them retain the best talent, but also achieve

an attrition rate of less than 5% during the

last few years.

Working With Distributed Teams

To continuously improve the quality and

eciency, as well as the output of the teams

in India, CoMakeIT oers a set of supporting

tools, methodologies and programs. Another

big challenge is to bridge the cultural gaps

between The Netherlands and India when it

comes to achieving team synergies on live

projects. For this purpose, CoMakeIT exten-

sively uses video communication. On a daily

basis, the teams meet up over a video con-

ference. By communicating often and more,

they reduce the risk of not understanding

each other.

Apart from this, the company encourages

what it calls shuttle diplomacy, people

travelling to each others location to get to

understand better and acquire knowledge

on product and process.

CoMakeITs ambition is to expand into the

markets of Australia, the UK, Canada and

the US. They have already succeeded in

Australia and the UK at the moment and

the outlook is quite encouraging, especially

because of the good business model they

have managed to realize.

understand better and acquire knowledge

on product and process.


18/32


Who are THEY THEY are a group

of nice people in Amsterdam

and Delhi who love to make

brands grow is a sample one-liner from

the companys highly interactive webpage

which enunciates their out-of the-box and

contemporary mindset. A relatively new

entrant in the advertising space, founded

in 2005 in Amsterdam, THEY was named in-

ternational agency of the year by AdAge in

2009. THEY brings to India a European style

of thinking, which has been well received

by the Indian market, which is still pretty

much dominated by the large international

network agencies.

Interestingly, the company never had India

on its radar, and was purely drawn in by

assignments. The rst being, designing

a campaign around the recently built T3

Terminal of the Delhi airport and branding

it to make it comparable with the most

sought after ones from across the globe.

Following its success, the opportunities

started pouring in and the company

decided to establish its wholly owned sub-

sidiary in Delhi in 2010. It seemed a logical

move to set up business here in New

Delhi because of the fast-paced growth

of the economy and the fact that clients

responded favorably to the more strategic

approach to creative communication that

THEY brings.

The advertising rm is very satised with

how things have gone in India for them so

far. For the future, THEY is optimistic when

it comes to the abundance of opportunities

India has to oer and consequently the

increasing growth pace of the companys

presence in India.

However, like a bed of roses is bound to

have thorns, the company has encountered

several challenges and has also undertaken

measures to overcome them. Finding suit-

able talent has been the most daunting

THEY India

// Advertising

In order to be successful in India, companies should beready to set foot into the country and operate fromhere rather than managing from The Netherlands.

Companies should not be willing to compromiseon core beliefs and principles but at the sametime should be accommodating enough to expectoperations to be very dierent from their home country.

Tjaco Walvis, Managing Partner, They India

//CaseStudies


19/32


challenge. The company nds the countrys

resource pool to be slightly less compatible

with its modus operandi, since the com-

pany is accustomed to a more structured

and well planned approach and a mature

project management environment in The

Netherlands. In response, the Indian branch

considers increasing its existing expatriate

personnel as a viable short term solution. In

the long run however, THEY emphasizes on

the training of local talent with some adver-

tising experience to work in their approach.

The ideal mix is to have mostly local people,

with a few Europeans at key position. Anoth-

er challenge when it comes to personnel is

to make sure they stay with the company. So

far, probably because of the opportunities

THEY has to oer, the company has man-

aged to keep the hired people within the

company. But, this needs constant attention

since changing jobs frequently tends to be

a common habit of many Indian employees.

The fact that THEY brings a dierent way of

working makes it more interesting for many

Indian employees.

One of the dierentiating factors for the

company has been its consistent quality

deliverance, a factor typical to most of

the foreign companies in the country.

Additionally, the company also sees its

European headed management as an ic-

ing on the cake, an aspect which enables

relationship building with both overseas

and domestic clients. THEYs managing

partner, Tjaco Walvis feels that European

leadership gives a sense of reliance to the

international clients who might be wary of

engaging with an Indian company and at

the same time to the Indian counterparts

it brings to the table a possibility of expe-

riencing a refreshingly new approach and

hence a novel product.

Building and maintaining these relation-

ships is a necessity when it comes to

attracting new clients and keeping existing

ones. Its a process that consumes a lot of

time and eort. Its an important aspect

of doing business in India. This is not only

part of THEYs business, but probably

everywhere. There is no alternative but to

be patient and persevering. At the same

time, THEY constantly challenges its own

strategy to keep what works in India and

change what does not.


20/32


Even in times of slowing economic

growth, the Indian steel industry

has succeeded in sustaining healthy

growth gures thanks to growing demand

from the construction, automotive and in-

frastructure sectors. This growth has been

facilitated by both the public and private

sectors, with the government introducing

favorable industrial reforms and private

parties undertaking substantial invest-

ments. These developments have attracted

many equipment suppliers and plant

builders to India, one of which is IJmuiden

based Danieli Corus. This company set up

its wholly owned subsidiary Danieli Corus

India Pvt. Ltd. in 2007.

Danieli Corus has its roots in the famous

Hoogovens IJmuiden steel plant, which is

currently operated by Tata Steel. The com-

pany specializes in integrated steelmaking

plants for high productivity during long

campaigns.

Until 2007 when Danieli Corus established

its Indian subsidiary, the company operated

a small sales oce in India comprising of

just three people. Over time, as the demand

increased, Danieli Corus India grew towards

an operational outt active in all areas of

iron making and steelmaking. Currently, it

employs well over 40 people and recently

moved into a brand new headquarters in

South Delhi.

The Indian market has some characteristics

that make operating in it a challenge.

First of all, the project environment is highly

dynamic and to a certain extent even un-

stable. Project execution may take years from

planning to nalization and can be delayed

or altered for reasons outside your sphere of

control. Consequently, a exible organization

and of course a lot of patience and persever-

ance are valuable assets in this market. To

overcome these challenges and create a ex-

ible and solid organization, the close coop-

eration between the Dutch headquarters and

the local oce has to be made a priority. By

combining state-of-the-art technology from

The Netherlands with sourcing, engineering

and project management both in India and

The Netherlands, Danieli Corus created a

Danieli Corus India Pvt. Ltd.// Iron & Steel

Make sure you have a local representation by localpeople with ample experience and a good network.

Dont expect that since India is an emerging economy

and has a huge domestic market, your entry willbe easy. India is a dicult market, take your time,be patient, be persistent, and make sure you getcommitment from headquarters.

Explore the Indian market thoroughly and seek advice fromcompanies operating in India.

Robert Heukelom, VP, Operations, Danieli Corus India Pvt. Ltd.

//CaseStudies


21/32


exible organization capable of operating suc-

cessfully in this market.

Secondly, it is very important to keep in mind

that relationships are everything in India.

Building and maintaining good relationships

with clients is an essential part of day-to-day

business. Throughout the years, Danieli Corus

has always made account management as well

as technologists available to clients to help

develop a healthy and solid relationship.

Thirdly, being a technology driven company,

Danieli Corus found itself confronted with

issues of price competitiveness. The Indian

market, at this stage, is one of the most price

sensitive markets, for which the company

has modied the design of the furnaces to

accomodate local sourcing for improved price

competitiveness while maintaining the highest

quality standards. Additionally, Danieli Corus

has successfully stressed the USPs of their

technology: the capability to operate at the

highest productivity and with the longest cam-

paign life, based on an operational philosophy

not oered by competitors.

Finding reliable manufacturers and suppliers

that could meet quality standards has been

another challenge, and the focus has been on

developing long-term relationships with sup-

pliers. Though still a eld of constant improve-

ment, Danieli Corus has already managed to

gain some good results.

After years of hard work, the company has es-

tablished a solid position in the Indian market,

as well as a reputation of technological excel-

lence and exibility. To get to this point, Dan-

ieli Corus chose to stick to its core principles

of delivering top-notch quality solutions.

With this solid foothold, the Indian sub-

sidiary is now set for further accelerated

development. It will work towards increased

market share and benet from the economic

growth and the consequent high demand

from the iron and steel industry for the com-

panys products.

To do so, perhaps one of the most important

aspects to enable this growth and maintain

the Danieli Corus USP, is the companys

decision to dedicate a Dutch national for

managing this process for several years. The

cultural dierences and the expectations

from both countries and organizations

require continuous alignment and mediation

and have been an area of special attention

for the last 5 years.


22/32


Incotec International BV, a reputed Dutch

company in the eld of seed research

and technology had established its 100%

subsidiary Incotec India Pvt. Ltd. in the year

2004. Incotec started to explore the Indian

seed market back in 1995 by visiting key

seed companies which was followed by its

rst imports in 1998, done through an agent.

In 2001, this agent agreement was over

and Incotec started importing directly and

nally in 2004, a local production facility was

established in Ahmedabad (Gujarat) to serve

the customers.

The company focuses on providing technol-

ogy that helps the seed sector to compete

in the global markets by producing healthy,

fast growing and protected crops. When

Incotec rst entered the Indian market, the

conditions in the seed sector were still quite

unorganized and in an early stage of develop-

ment. There was no unied seed association

on a national level. Basically, each province

was having its own seed association and the

seed market was dominated by traders and

only to a limited extent by technology.

Their research threw light upon the diversi-

ed cropping pattern in India and how the

Dutch technologies needed modications

to better suit the Indian context, given that

these were traditionally based on European

food & farming habits. A big dierence is

that the European farming over the years

has become highly mechanized and is done

in an almost totally controlled condition

(glass houses). But in India its still very much

a manually operated sector and is done in

Incotec India Pvt. Ltd.

// Feed Technology

If we recruit people from Agri Universities, based ontheir academic background, like we had done in thepast, moulding them according to the Dutch way ofdoing things, becomes a challenge. Its a challenge

getting the technical people to meet our expertiseneed due to the unique nature of our business. However,nding people for administrative purpose is not dicult.

The legal structure (title) & share holding pattern of the companyis the most important, and it should be taken care of right at thebeginning. If its not done properly then you might lose a lot ofmoney through taxes.

We strongly believe in Think Globally & Act locally, as well inThink like a Farmer before you act.

The Netherlands Embassy is doing a good job, so support fromthem will be useful as it becomes a conduit of experience sharingthat enables other Dutch companies to succeed in India.

Dr. Manish Patel, Executive Director, Incotec India Pvt. Ltd.

//CaseStudies


23/32


open eld conditions. Another big dierence

is the amount of money Indian growers can

spend on our products. Thats why a lot of

modications to the products were required

to make Dutch technologies suitable to

Indian agricultural circumstances, both from

a product point of view as well as costs.

As mentioned before, given the farmers low

purchasing power in India, the inevitable

price rise due to technological add-ons

would have found few takers. The only way to

combat the price rise was to set up produc-

tion facilities in India itself which initially

went against the Dutch managements earlier

approach of keeping all production in The

Netherlands because of the risk of technol-

ogy being lost or copied to competitors.

Furthermore, as in the case of any premium

product oering, the company initially

targeted all the top seed companies of In-

dia. According to the management, in this

sector, once the upper crme have adopted

Incotecs technologies, the smaller rms

generally follow suit in order to survive in

the market. But when Incotec started in

1997, it thought it would be the best way to

persuade farmers to adopt Incotecs seed

coating concept by translating the promo-

tional literature in local languages which

farmers can understand and participate

in farmer fairs and exhibitions. This how-

ever, didnt work out as planned. Incotec

realized that it needed to have a proper

understanding of the market conditions

and consumer patterns.

These success strategies have truly dened

Incotec Indias impressive business perfor-

mance in the Indian subcontinent. The an-

nual growth ranges between 20-30%. So the

company will continue to launch novel tech-

nologies, which have not yet been introduced

in the Indian market. It doesnt stop there.

The future goal of Incotec India is to start

oering integrated technologies and services

to the whole of the Central Asian seed sector

from out of India (previously, this was done

out of Europe). For that reason, Incotec par-

ticipates in the Vibrant Gujarat initiative of

the Government of Gujarat that encourages

and facilitates foreign investments.

Though its a huge investment for Incotec, the

company is committed to do so because of

the increasing necessity of getting a second

green revolution in India. At this moment

the country is running on its edge of its food

production and nds it challenging to keep

track with the rapidly growing population. Ad-

ditionally, the company has decided to convert

into a Limited Liability Partnership (LLP) struc-

ture, which combines the best of partnership

and company form of an organization and

provides more exibility without imposing de-

tailed legal and procedural requirements. The

driving factor behind this move has been the

issue of repatriation of prots in the present

private limited company structure.


24/32


Checklist of Considerations for Dutch Investors

There are a number of success

stories from The Netherlands, of

companies that have set up growing

and protable businesses in India. At the

same time, the going has not been good

for several others, including a few large

companies. Small companies and rst

time entrepreneurs can nd it dicult

to understand and deal with a range of

procedures and regulations, and build

scalable businesses in India. It can be

said that the Indian market is large and

yet a complex of many small markets,

and requires a dierentiated approach

depending on the business sectors and

target markets. As a result, there is an

increasing understanding that sustaining

success in India requires a long-term

approach and a reasonable threshold of

enterprise size and investment levels. This

may well explain the dierence between

the successes and failures among Dutch

companies operating in India.

The stories you read above show some

of the challenges and solutions in a

very practical way. To give some more

background and support for the Dutch

companies making their way into the

Indian market, we have put some points

together. Please keep in mind that this

is not a Guidebook on how to set up

business in India but only an indicative

checklist and could involve a range of

other aspects as well. Just look at them as

an initial checklist, consider it some food

for thought.

Your India Rationale:a) Be clear about

your objective of entering into the

market as well as assess your business

viability and the success factor through

detailed market assessment.

Identify your business - selling

imported goods into India; producing

locally for the market; sourcing for

other markets; outsourcing for existing

markets; etc.

Identify the critical India Advantage

for your business and revalidate it

//India:BusinessAdvice


25/32


through a careful study of market and

consumer behavior.

Estimate and plan for the threshold

levels of investments and sunk costs

+ time you need to invest in India to

establish a sustainable presence.

Business Culture:b) Indians are easy

to work with but are accustomed to

dierent work cultures vis--vis the

Dutch. Before you deal with them, its

good to have a basic idea about their

traits.

Indians generally appear friendly but

avoid over-questioning them during

due diligence.

Foreign partners can expect

overwhelming hospitality.

Indians can be described to be

having a No problem mindset and

believe that there is a solution to

everything.

Everybody knows Mr. Big: Name

dropping is a common feature of the

Indian business culture. Everybody has

some amount of access to powerful/

inuential people. The access to

corridor of power is often cited as a

means of showing ones own inuence.

This may not be realistic, so beware of

too much optimism when it comes to

the connections.

Promises are as easily made as

abandoned.

Agreements and contracts are not cast in

stone, as there is a very high possibility of

clauses getting renegotiated, even after

being signed. The intent is ultimately

more important than content.

The Indian way of doing business is

relationship based. Indians would

prefer to have a good relationship and

common trust, before doing business.

But once the trust is there, the

relationship will last for a long time.


26/32


This relationship is a good alternative

for going to court, something you

would like to avoid since these

procedures might take years and years

and are very costly.

Government & Regulation:c)

India has a well laid out legal system/

process. It can be overloaded and

sometimes slow.

Taxes are high and procedures are

complex.

The culture of tipping (baksheesh)

for speeding up provision of services

exists to some extent.

Red tape remains a perennial issue,

but the diculties of navigating the

bureaucracy have been outweighed

by the eventual benets of successful

market entry; a long-term view is

required.

Besides the taxes levied by the central

government customs duty, central

excise duty, there are taxes levied by

the state government too viz., value

added tax, central sales tax, entry tax/

octroi.

Pre-investment Phase:d) The Indian

market is extremely price sensitive

and identifying appropriate markets

and segments forms a core element

of the entry strategy. A dierentiated

approach is required depending on the

business sectors and target markets.

If required, work with specialist

consultant organizations and develop a

thorough understanding of the market.

Before marking your rst steps into the

Indian market, there are several things

to consider. For example:

Consider the large amount of

secondary data available in India before

commissioning primary research; you

may nd that you do not need a very

accurate estimate, given the vastness

of the Indian market.

Indian markets are very price-sensitive,

conservative, and operate under peer

//India:BusinessAdvice


27/32


group psychology. Drastic changes in

consumers spending patterns take time.

Do not ignore the rural markets, though

they are very hard to penetrate.

Speak and listen to other Dutch companies

operating in India.

Business structure:e) once youve decided

where to establish your business, its time to

take a good look at how you would like to set

up your business. A few things to remember.

Consider carefully the need for a local

partner: in most activities, the government

regulations allow a 100% foreign ownership.

You may nd that you actually need a

Country Manager, and not an Indian

investor partner.

If a local partner is preferred, carry out a

due diligence review, and also check the

memorandum and articles of association

of the proposed joint venture company

thoroughly.

When you decide to team up with a local

party, it is advisable to get the best help

available to do all the checking and for

preparing the legal framework.

Contractsf) : some special attention to

Signatures have no weight and most

agreements are renegotiable. This

is especially so in view of the slow

legal enforcement process. Financial

commitment of the partner is the surest

conrmation of implementing ventures.

Understand the full implications of taxation

on lump sum, royalties, etc. and also terms

like net and gross payments.

Involve detailed force-majeure clauses and

arbitration conditions in agreements, besides

clear exit clauses upon the occurrence of

specic conditions in the venture.


28/32


Enforce all oral understandings in writing;

do not leave anything uncovered- even in

condential agreements.

Always have an exit clause in your

partnerships.

Investment Phaseg) : a critical phase in your

establishment

Location aspects:Before nalizing any

particular location for running your business,

it is important to be clear about the following

considerations.

Understand the zoning and environmental

aspects applying to the location.

Check out property titles, and preferably

buy land directly from the Government.

Ensure that property titles are transferable

to the company and do not remain in

private names or under power of attorney.

Understand tax and other incentives

available in various locations.

Check out availability of resources, logistics

and transportation, besides social amenities

and living conditions before nalizing your

business and factory location.

Management/personnel:once your business

location is nalized, you need good human

resources to manage it. It is useful to have a

look at the points mentioned below.

Determine the actual need for posting

expatriates at various levels, especially as

a Director, attracting a local director has

great benets too.

Understand all local employment terms,

income levels and social costs, before

nalizing an HR policy.

Outsource as much work as possible.

Avoid locations known to harbour militant

trade unionism.

Biggest challenge is to create a good

and eective link to the company in The

Netherlands. Make sure the mixture of local

and Dutch is good.

Running the Businessh) : Follow the rules.

Indian authorities are keen to get back to

you whenever you dont! Consider to have

a good liaison agent and outsource all

government related issues, it can save you

time and unnecessary problems.


29/32


//CON

CLUSION

// Conclusion

Identication of suitable local partners:This

should be a priority in any successful market entry

strategy. Many companies which have successfully

entered the Indian market, stress the importance

of devoting signicant resources to this aspect of

their overall strategy. Those that committed timeand eort to nd the perfect t often found that

they saved themselves the task of having to nd

additional partners later on.

Know your market:Be clear and thoughtful

about indentifying your customer segment

and reaching them with targeted marketing

eorts. It is possible that lack of knowledge and

appreciation of your products and services in the

market coupled with availability of substitutesat a cheaper price can signicantly alter your

envisaged pricing strategy.

Long-term commitment: Partnerships with

India need to be seen over the longer term. Trust

is necessary and attention should be given to

building this in the initial stages of the interaction.

This will mean considerable face-to-face contact

and social interaction.

Understand the culture: It is also necessary to

understand the dierent styles of doing business

in the two countries.

Information Sharing: Participating in Embassy

seminars, conferences to network with otherDutch organizations that have worked in India.

Seeking advice from professional

consultants:In relation to market and

feasibility studies, fundraising, cross-border

acquisition, assistance with joint ventures,

transaction and assurance services, tax

planning, transfer pricing and government and

infrastructure advisory.

Business development techniques:

Meeting with potential Indian partners and

developing local contacts in India via industry

associations, such as the Federation of Indian

Chambers of Commerce & Industry (FICCI),

the Confederation of Indian Industry (CII).

Creating awareness about your products and

pinpointing the attributes in a way to create

your own market which is latently there.

There are challenges that any investor would face towards establishing a successful business

presence in India. Given that the regulatory environment is seen as one of the largest barriers to

entry, it is critical that the appropriate strategies are envisaged right from the planning stage. Red

tape remains a perennial issue, but the diculties of navigating the bureaucracy have been thought

to be outweighed by the eventual benets of successful market entry. To summarize, the India entry

checklist among other things call for:


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Opportunities in IndiaIndia has one of the fastest growing

economies in the world today.

Economists predict that by 2020, India

will be the third largest economy in the

world. There are many opportunities

in India for Dutch companies willing to

invest time and effort in establishing

their business in this rapidly expanding

export and investment market.

Business assistance

The Netherlands government provides

support to companies that want to do

business in India. This assistance is

available through our extensive network in

both India and The Netherlands.

For India, the assistance covers the

following areas:

Information resources

Providing basic information about

markets, both geographically and in

terms of specic products

Supplying information on developments

in science, technology and innovation in

India

Advisory services

Initial identication and researchinto potential business partners and

partners for scientic and technological

collaboration

Providing referrals to experts in legal

matters, recruitment and accounting

Match-making assistanceFinding potential partners for your needs

in research, scientic collaboration or

technological exchange

Arranging contacts with relevant

stakeholders and prospective business

partners in India

Business support

Providing assistance with preparation

and organization of business trips toIndia

Oering an ocial umbrella under

which to operate, which can make a

decisive dierence

Providing advice and assistance with

project tenders

Problem solving and intervention

Intermediating in conicts

Directing you to the relevant governmentauthorities and non-governmental

bodies

Acting as observers

In The Netherlands, the government

agency NL EVD International can

provide the following:

Useful information on sectors, legal

procedures, tax regulations and other

mattersIndustry-specic market scans

Assistance in nding potential business

partners in India

Customized information on subsidy

schemes and nancing

The Netherlands Government can help your business take

advantage of the opportunities in India


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NL EVD International, The Netherlands

E: [email protected]

T: +31(0)88 602 80 60

Netherlands Embassy New Delhi

Economic departmentE: [email protected]

T: +91(0)11 24197618

Agricultural Department


T: +91(0)11 24197605

Science & Technology


T: +91(0)11 24197675

NFIA (For Indian investments in The

Netherlands)


T: +91(0)11 2419 7629

W: www.na-india.com

Netherlands Consulate General in Mumbai


T: +91(0)22 22194200

Network Partners in India

Netherlands Business Support Oce (NBSO)

in Chennai


T: +91(0)44 42158388

Netherlands Business Support Oce (NBSO)

in Ahmedabad


T: +91(0)79 26449858

Netherlands Business Support oce (NBSO)

in Hyderabad


T: +91(0)40 42030788

Netherlands Agro & Food Technology Centre

(NAFTC) in Delhi


T: +91(0)11 33521521

W: www.naftc-india.com

Useful links

www.hollandtrade.com

www.hollandinindia.org

http://india.nlembassy.orgwww.cbi.nl

www.agentschapnl.nl/onderwerpen/internationaal-ondernemen

In addition to the support oered by the Netherlands government, more in-depth commercial

assistance is provided by consultants, banking institutions and other organizations. Further

support is available from specialized organizations.


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opportunities challenges in the indian market

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