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Students:

Catarina Vital, no. 11259

Diogo Alves, no. 11249

Diogo Oliveira, no 11316

Pedro Vaz, no.11285

Yitian Liang, no. 11290

Master of Sc. In Business Administration

Lisbon, July 1, 2010

1

Index

Introduction ............................................................................................................................ 2

Importance of BRIC in the world trade ...................................................................................... 4

Indian Market Analysis ............................................................................................................. 7

1. Basic data ................................................................................................................................ 7

2. PEST Analysis ........................................................................................................................... 7

3. International trade .................................................................................................................. 8

4. Opportunities of exporting to India ...................................................................................... 10

5. Challenges of exporting to India ........................................................................................... 11

6. Business Culture.................................................................................................................... 11

Portuguese Exports ................................................................................................................ 14

1. Countries ............................................................................................................................... 14

2. Products ................................................................................................................................ 15

Recommendations ................................................................................................................. 18

1. Ores: ...................................................................................................................................... 18

2. High tech products: ............................................................................................................... 19

3. Sustainability and Environment – Energy sector importance .............................................. 19

4. Partnership - Construction and Iron & Steel Companies ...................................................... 20

Appendix ............................................................................................................................... 22

References ............................................................................................................................. 24

2

Introduction

The Portuguese traditional business partners (Spain, France and Germany) are not anymore the

countries with higher growing rates. In 2008, Portuguese exports outside the European Union

have increased its value in the external commerce, while Portugal targeted new markets in order

to avoid a reduction in its exports within a worldwide crisis scenario.

It is therefore essential to design our strategy in order to strengthen the position of our country in

new markets as a part of the diversification process that has started before the crisis. Hence,

Brazil, Russia, India and China are four very important fast growing countries and hence crucial

markets to amplify Portuguese external trade. In its last official visit to India, the Portuguese

president of the Republic stated that he would like to see Portuguese companies to be more

audacious externally1 but still, Portuguese presence in this market and in other emerging ones is

very fragile while investment and exports are reduced.

Till the nineties, Portuguese exports registered a big increase, even though slowing down after

this period due to the high rivalry posed by Asian companies, making Portuguese ones to lose

competitiveness in the international markets, due to the monetary and exchange policy imposed

by the EU, also because of the strong appreciation of the euro, clearly prejudicial in exports.

In this sense and inserted in our topic, the BRIC, we found interesting the opportunity of

establishing a linkage to the Asian continent, picking up the main takeaways that we could learn

from those countries, and after describing the BRIC´s importance to the world trade, we will aim

at analysing the suitability of a Portuguese international export strategy to India.

India is described as a continent by itself, while Indian economy is nowadays one of the largest of

the world, being a hot prospect market to the Portuguese exports. However, Indian market

continues to be underexplored, representing only 0.13% of total Portuguese exports. This fact was

faced as an opportunity, as we will analyse the Indian market observing its macro-environment

through a PEST analysis, its main cultural issues as well an international trade perspective

summarizing the main advantages/disadvantages to export to this country.

After assessing India, we will carry out a general study about Portuguese exports to then draw

some recommendations that will function as a guideline for AICEP of how and what to export to

this Asian country.

1 Source: http://diarioeconomico.sapo.pt/edicion/diarioeconomico/edicion_impresa/economia/pt/desarrollo/1029034.html

(Accessed on June 25, 2010).

3

IMPORTANCE OF BRIC

4

Importance of BRIC in the world trade

During the 1970´s decade we figured out the beginning of an accelerated industrial growth of a

specific group of countries aimed at achieving a regional leadership, by building the initial bricks

of the notion of emerging markets. Furthermore, the last 10 years changed the world´s economy

leading to the recognition of a new global society order. That group is called by BRIC, an acronym

that refers to Brazil, Russia, India and China, used in 2001 by Jim O´Neill, a Goldman-Sachs

economist.

According to a Goldman-Sachs report issued in May 20102, those so-called emerging economies

had contributed “for over a third of world´s GDP growth and occupied almost a quarter of world

economy in PPP (Purchasing Power Parity) terms” in the last decade. In fact, there are projections

of the BRIC overtaking the USA as the economic colossus in 2018, whereas for example Brazil

should surpass Italy in 2020 and India or Russia will soon be larger than Spain or Canada.

The recent growth of the BRIC is expected to be even more undermined in the next few years,

while in 2050 they will demonstrate better results than the G6 together (USA, Japan, Great-

Britain, Germany, France and Italy). This latter referred information is linked to the charts

presented below and referred to BRICs contribution to world´s GDP, as well as the comparison of

BRIC´s GDP´s growth to other countries.

Figure 1 - BRICs contribution to world´s GDP

Figure 2 – BRICs´ GDP comparison to other markets (source: GS Global ECS Research)

2 Source: http://www2.goldmansachs.com/ideas/brics/brics-decade-doc.pdf (Accessed on June 26, 2010).

0

15

30

45

60

China Russia India Brazil BRICs G3

BRIC'c contribution to world's GDP

2001-2010

2011-2020

0

10

20

30

40

G7 BRIC N-11 Other Developed

Markets

Other Emerging Markets

BRIC's GDP comparison with other markets (US$ trn)

2000 2010 2020

5

In the figure 1, we may highlight an estimated growth of almost 20% on the contribution of the

BRIC to the global economy within 10 years. This trend is clearly led by China´s expansion of

around 15% in 10 years, whereas the BRIC rise will signify the decrease of the G3 to the overall

economy in almost 10%. Furthermore, on figure 2, we may observe one more time the

exponential growth tendency of the BRIC specially compared to other markets.

This current and prospective economic trend will also have an impact on social terms, as the

expansion of the BRIC will drive rising incomes and a new-born middle class aligning the notion of

economic development to the one of economic growth. Also, this pattern will be most felt in India

and China, as they are the most populous countries in the world, generating a tremendous impact

on demand, increasing the PPP on those countries and stimulating competitiveness.

Despite different historical paths and of some obvious distinctions in social and political terms

between the BRIC, the previous paragraphs show us a new course of world´s economy, giving a

new sense to the word globalization due to the rise of those emerging countries to the status of

futuristic economic super-powers.

Why India? After exposing some of the key aspects related to BRIC´s growth in world economy, we decided to

choose one country to work on, India. This topic will work as an introduction for the subsequent

one, which will deal with the Indian market analysis in order to highlight the key points that

Portuguese companies have to consider while exporting to this Asian country. Hence, why do we

have chosen India? There are some main reasons that we can describe:

- High Domestic consumption – according to the Mckinsey Global Institute3, India accounts

for more than half (67%) of its region GDP.

- Cultural emphasis – although a wider description on point 2. We may highlight that the

drive for initiative and entrepreneurial sense of Indian people is an important factor for

companies that want to go abroad, seeking for innovation and creativity

- Crisis recovery stimulus – during the recovery of the recent financial downturn, India (like

China) have shown a lack of correlation with USA stock market due to market

diversification

- Access to partnerships with some of the rising companies in the world. As an example we

can enhance Tata Group in the automobile, consultancy or steel sectors.

- Capability to reinforce the position in Asia – India can be a step to develop a position in

Asia, the “continent of the future”, as well as a better penetration in China, as India is

now “China´s largest trading partner”

- Portuguese international flows development – India is the BRIC with which Portugal has

the lower level of exports, when compared to the trade flows to China, Russia and mainly

Brazil

3 Source: http://www.investordaily.com/cps/rde/xchg/id/style/8343.htm?rdeCOQ=SID-0A3D9632-89DDFA62 (Accessed on June 26,

2010).

6

INDIAN MARKET ANALYSIS

7

Indian Market Analysis

1. Basic data

Area: 3,287,263 km² (including Cashmere)

Population: 1,180,000,000 people

Governance system: Federal constitutional parliamentary democracy

Currency: Indian rupee (exchange rate of 57 rupees = 1 euro at 24.06.2010)

GDP: $1.367 trillion (forecast for 2010), growth rate09-10 = 7.4%

GDP by sector: Agriculture (17.5%), industry (20%), services (62.5%).

2. PEST Analysis

Political environment

The largest democracy in the world;

Since its dependence in 1947, India has been dominated by several parties;

Since 2004 it is governed by the Indian National Congress (INC) that formed a coalition named United Progressive Alliance having a big mass of supporters among the Indian people;

Efforts to reach an even firmer relationship with China and the United States, trying to show their force as an emergent economy;

Good relationships with the developing countries in Asia and Africa, which leads to an all-round development of its economy.

Economical environment

India assisted to a much higher speed of the economic development since the application of market-based system in 1991, opening borders to the foreign trade and investment;

Great influence of the WTO (World Trade Organization) during the recent years with the expansion of trade and the economic growth of the country;

Some of the most important companies in India are related with the financial sector (SBI Capital Markets Ltd (SBICAP) or ICICI bank), oil and natural gas (ONGCINDIA - Oil and natural gas corporation limited India), or the Tata Group present in numerous sectors from technology to automotive;

Among the poorest countries worldwide but with a surprising potential for the development of its economy, India is an emergent economy, a BRIC and nowadays, the Indian economic growth has a feature of stabilization. The steady growth has the function to activate the global economy.

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8

Social environment

Social environment is not good as there is lack of regulation and measures taken to confer to the Indian a good standard of living;

Education is far away from excellent, even though there was a great progress in the attendance of primary education and efforts made by the Indian government to eliminate illiteracy;

Less opportunities for the girls to go to school, resulting in less literacy among women;

Numerous inequalities in the Indian society due to the permanent social system of castes;

90％ of the employees in India are out of social security, according to the study made by OECD (Organization For Economic Cooperation and Development);

This whole situation may lead to a chaos facing a financial crisis as many people may get out of job without any unemployment benefits.

Technological environment

Useful measures taken by the government: for example, the free and compulsory education until the age of 14 consigned by the Constitution of India;

In another way, there is a great importance given to the high education and it is the 3rd largest in the world, after China and the United States;

Great importance attached to the science and technology sectors also given by the constant importance of the universities research and constant development of innovator methods;

Great exporters of services related with technology and information systems.

3. International trade

Exports

As was stated before, India is one of the most important exporters in the world, being ranked 22nd

in the world in terms of export volume. However, Indian trade, as well as other countries, was

impacted by the global recession of 2007 to 2009. Indian exports fell from $200.9 billion in 2008

to $165 billion in 2009.

Being a country with a huge workforce, India has seen its trade being boosted by the production

of precious stones and metals. The various other export commodities that India exports are:

petroleum products, machinery, iron and steel, chemicals, vehicles and apparel.

India’s main export partners are: United Arabs Emirates, United States of America, China and

Singapore.

SOCIAL ENVIRONMENT

TECHNOLOGICAL ENVIRONMENT

9

0% 2% 4% 6% 8% 10% 12%

China

Saudi Arabia

US

UAE

Iran

India major country partners in 2009

Imports

Considering India as an emergent country seeking for becoming a developed society, its trade

relations with external countries are aimed at strengthen its economy and increase the living

standards. In this sense, India is in need of machinery and energy and that is the reason why in

2009 the major imports were crude oil and machines.

In 2009, India faced a decrease in imported products by import value, diminishing more than 20%

in the amount verified in the previous year, from $322.3 billion to $253.90 billion, being ranked as

the fifteenth country in comparison with the world. This is related to internal factors, due to an

increase on internal production to boost economy.

Figure 3 - Indian imports between 2008 and 2009 (Source: Economy Watch)

Also in 2009, according to the Economy Watch, the most important India’s partners were China,

Saudi Arabia and United States accounting for almost one fourth of the total imports, as it is

showed below. We can also conclude that India has a portfolio of importers very well diversified,

being less exposed to specific markets, although its main commercial exchange is done with China

and the nearby Arabic countries.

Figure 4 - Main commercial partners of India (Source: Economy Watch)

Finally, regarding the main products imported India encompasses: non-electrical machinery, crude

oil, precious stones, iron and steel, gold and silver, chemicals, coal, transport equipment and

fertilizers.

2008 2009

$ billion 322,3 253,9

0

100

200

300

400

Indian imports (2008-2009)

10

4. Opportunities of exporting to India

India supports Global Trade – Despite some legislation and restrictions regarding foreign trades,

India is an open country for international trade. However, it continues to be much less open than

many of its large emerging nation colleagues.

Many Ports - India has a vast shoreline spanning 7600 kilometers forming one of the biggest

peninsulas on the earth. It is serviced by 12 main ports and 185 notified minor and transitional

ports. Different ports deal with diverse merchandise and commodities. In order to understand

which ports support a certain commodity/merchandise the best deal is contacting a shipping

agent who has a high network of contacts to clarify all the doubts.

Consumption is growing – It is expectable that by 2025, the middle class in India will increase

from 5% in 2007 to 40%, according with Subbu Narayanswamy - co-leader of McKinsey’s

consumer practice in India. By that time, or even before, India will be very likely the “country one

of the largest consumer markets in the world”.

Emerging industries – While expenditures on food (in % of total consumption) are progressively

going down, Indians are spending more on transports and communication, recreation, furniture

and home appliances. This is also one of the reasons why machinery (including vehicles

components) accounts for a significant percentage of total imports in India. On the next chart, we

may have a fully understand of this paradigm:

Figure 5 - Consumption distribution in India (Source: Mostly Economics, Wordpress)

Market Diversification - Selling to India allows Portuguese companies to diversify their business

and spread their risk. As a result, companies are not tied to changes within the western and

domestic markets. Besides, there is a chance of finding a potential niche much higher than in

those countries. Furthermore and unlike Russia for example, India is recognized by a wide market

diversification from IT to manufacturing. This factor should make it more stable than other

emerging markets.

UE platform – The relationship between EU and India has been strengthened in the last years, not

only from the economic and commercial standpoint, but also within a strategic perspective due to

the crescent role of India in the international politics and economic dynamics.

0%

10%

20%

30%

40%

50%

60%

1999-2000 2003-2004 2004-2005 2005-2006 2006-2007

Consumption Distribution in India (% between 1999-2007)

Food, beverages & tobacco

Clothing & footwear

Gross rent, fuel & power

Furniture, furnishings, appliances & servicesMedical care & health servicesTransport & communication

Recreation, education & cultural services

11

5. Challenges of exporting to India

Packaging – There are some levels of standards, especially custom rules, regarding labeling or

quarantine requests. For instance, when transporting goods to India, there is very often a

quarantine inspection to those goods, mainly when there is a possibility of damaging vegetation

or earth. The best way to overcome all this details is to incur on expenditure (but a very welcome

one since it avoids mistakes and failures) by outsourcing an international shipping firm that could

do this perfectly. Therefore, that chosen firm must understand which products are allowed to

enter in India and under what specifications.

Market Information – Finding information on India is a time-consuming and difficult task,

especially when comparing with our home country. Hence, if we want reliable and accurate

market information and be aware of emerging opportunities with the best right options, it is

indispensable to have a broker between Portugal and India, who lives in this latter and can get all

that information for us.

International Competition – Worldwide, there are companies trying to take advantage from the

current and future Indian economic conjuncture. Therefore, any Portuguese SME is for instance

competing with US multinationals who despite some higher experience in this market also have

higher resources to better explore some gaps, failures, needs and opportunities in the Indian

market.

Infrastructural problems – India´s recent economy boost has put some pressure over the

infrastructural facilities of the country as according to the urban expansion projections, “India has

10 of the 30 fastest-growing urban areas in the world”4, having to take into account significant

modernization and expansion problems related to water and energy supply, communication

improvement like telephone penetration, traffic problems on main cities or poor road conditions.

This can pose serious problems to Portuguese companies operating in sectors related to

construction and real-estate.

Indian Bureaucracy – The IAS (Indian Administrative Service) is a synonymous for the Indian

bureaucracy and despite the urgent need of reform in the Indian system, areas like transportation

or environment conservation have patent bureaucrat aspects. While internationalizing,

Portuguese companies have to be aware of a slow-decision making process in some business

sectors, due to an intensive bureaucracy.

6. Business Culture

When dealing with Indian companies you should take into account some culture-specific aspects

that are crucial for establishing win-win agreements, adjusting your behavior to cope with cultural

differences. Hence, here are some suggestions to address:

4 Source: http://www.usindiafriendship.net/viewpoints1/Indias_Rising_Growth_Potential.pdf (Accessed on June 26, 2010).

12

Language and religion

Although central government only recognizes Hindi has the official language of India, there are

about 21 other local languages in different states. Furthermore, English is the language of

international commerce, being one of the official languages. Religion plays an extremely

important role in India and as we know some of the most well-known religions have born there

like Buddhism and Hinduism.

Decision making and building relationships

Doing business in India involves building relationships. The decision making is not an issue of only

one person as the decision should also correspond to the group or other systems that an

individual belongs to. The decision made by an individual should also correspond to the family,

group, or other systems that he/she belongs to. Indian culture is highly based on hierarchical

positions where status, people roles and responsibilities tend to be very well defined. Indians only

deal favorably with those they know and trust, hence it is not only crucial to show a good business

knowledge but good signs of trustworthiness and foremost honor.

Negotiations

Indians are not very serious about the time, for them the time is not that precious. Meetings

should be arranged well in advance, in writing and confirmed by phone. Avoid meetings near or

on national holidays and the heat seasons by scheduling between October and March. Punctuality

is expected, although flexibility is relatively accepted as family responsibilities take precedence

over business so last minute cancellations are possible. Furthermore, the business environment

attaches great importance to friendships. While communicating with your Indian partner the topic

of friends or family would be a good choice. In this way, you will be able to gain the trust from the

Indian associates.

Linked to the lack of importance given to time, always bear in mind that negotiations can be slow.

If trust has not yet been established then concentrate efforts on building a positive connection as

Indians do not base their business decisions solely on statistics, empirical data or presentations.

They use intuition, feeling and faith to guide them and patience is a key strength to succeed while

doing business in India.

Is is also clearly important to avoid the use of pressuring and disagreement tactics as Indian

society has an aversion to conflict as it is considered rude and maybe seen as causing disrespect

or as a personal offense.

Analysis of the axes Hofstede (Appendix 1.)

Hofstede´s 5 dimensions of culture are particularly relevant while aiming at analyzing the cultural

differences between countries. This author has based a cultural assessment on 5 major factors:

power distance, individualism, masculinity, uncertainty avoidance and long-term orientation. In

this case, we will compare both India and Portugal results in order to check the cultural fit

between both countries. This study can be found in appendix 1.

13

PORTUGUESE EXPORTS

14

Portuguese Exports

Portugal was the European country suffering from higher changes on its exports’ structure

between 2003 and 2006, mainly due to the chosen final destinations and the type of products

exported.

1. Countries

According to Portuguese Official Statistics (Instituto Nacional de Estatística), in 2008 around 75%

of Portuguese exports were made to European countries, mainly to Spain, Germany, France and

United Kingdom.

Figure 6 - Portuguese exports to inside EU (source: INE)

From 2005 to 2008, the total exports to countries outside the UE have been growing from 20% to

25% of the total exports, which emphasizes that the Portuguese bet on new markets, mainly in

Africa and Asia. The purpose of this strategy is to try to minimize the Portuguese exposure to a

limited number of European countries and to explore new emergent markets, with high growth

rates, where new expansion opportunities are arising.

Figure 7 - Portuguese exports to outside EU (source: INE)

0

5000

10000

15000

20000

25000

30000

35000

2005 2006 2007 2008 2009

Portuguese exports inside UE (€M)

United Kingdom

Italy

France

Spain

Germany

Others

0

2000

4000

6000

8000

10000

12000

2005 2006 2007 2008 2009

Portuguese exports outside UE (€M)

Singapore

PALOP

Russia

India

China

United States

Brazil

Others

15

Regarding the Portuguese exports only to BRIC (Figure 8), this value has increased 33.3% since

2005 to 2009, mainly due to an increase in the international trade with Brazil. However exports to

these countries solely represent 1.95% comparing with the total value.

Figure 8 - Portuguese exports to BRIC (source: INE)

In the long run, if Portugal keeps on following this diversification strategy to African and Asian

countries it will be able to protect itself against downside turnarounds in the Western economies,

once the country has been penetrating into markets growing more than the European ones.

2. Products

As we can see from the next chart (Figure 9), the main Portuguese products exported are:

machinery, electrical devices and equipment, automobiles and tractors and other land vehicles

(which are included in the two first categories – machinery and transportation materials).

Figure 9 - Portuguese exports by product (source: Portuguese Ministry of Economy and Innovation)

According to Jornal de Negócios, in the last two decades the structure of the Portuguese exports

has changed a lot. Low technology products, such as textiles and shoes, dropped from 40% to

around 10% and technological products (aeronautical, pharmaceutical, IT and parts to automotive

and electronic industries) have been increasing, representing roughly 30% of the total exports.

0

100

200

300

400

500

600

700

800

2005 2006 2007 2008 2009

Portuguese exports to BRIC (€M)

Total

Brazil

China

India

Russia

0%2%4%6%8%

10%12%14%16%18%20%

Portuguese exports by product

2007

2008

16

Concerning the Portuguese exports to India, they accounted to only 0.13% of its total exports,

evidencing a very deficient presence in this market. As it is acknowledged in Figure 9, around 44%

of the products exported to India in 2009 were capital goods (machinery), parts and accessories

and other industrial materials.

Figure 10 - Portuguese exports to India (source: INE)

According to INE statistics, the trade balance between Portugal and India is much misbalanced,

once in 2009 Portugal has exported 40,364,358€ to India and imported 262,266,491€. However,

the number of Portuguese companies exporting to India has been increasing over the last years.

In 2009, this number was 338 and there are currently 7,408 companies with potential to

successfully export to India5.

5 Source: http://www.bes.pt/sitebes/cms.aspx?plg=56d4aa7c-9ff3-491c-a635-4c2efa60747f (Accessed on June 27, 2010).

0

5

10

15

20

25

30

35

40

45

2005 2006 2007 2008 2009

Portuguese products exported to India (€M)

Transport equipment, parts and accessories

Capital goods, parts and accessories

Fuels and lubricants

Industrial materials

Food and beverages

Other consumer goods

17

RECOMMENDATIONS

18

Recommendations

India is the 52nd Portuguese client and its 33rd supplier. The trade relations between Portugal and

India are misbalanced and its profile is not the most attractive at all: trade of lower added value

products with a reduced industrialization level. Once India is an alternative market to China, in

what concerns to the great potential of its internal consumption and to the capacity of the

development of industries where technologies makes the difference, the Portuguese external

efforts may be aimed at changing this.

Besides machinery, skins, textiles, rubber, plastics and agricultural products that Portugal buys

and sells to India, we must try to explore new markets for new products. In order to reduce the

gap between imports and exports, Portuguese companies must focus on distinct high tech

products. Several countries, like the United States and other EU countries are already in the long

run for those niches, thus increasing the pressure on the Portuguese side.

‘India could be 40 times bigger by 2050, and may also have the potential to be larger than the US

by that time’6. To achieve this, however, many changes need to be implemented.

According to the research report ‘Ten Things for India to Achieve its 2050 Potential’, performed by

the Global Research department of Goldman Sachs, increasing agricultural productivity, improving

environmental quality and infrastructures are some of the critical aspects in order to make it

happen.

Consequently, our most important recommendation for the potential Portuguese exporters to

India is that they should try to focus on products and key aspects that cover the need existed

behind these two trends. We will therefore present recommendations focused on some ores, high

tech products, energy sector sustainability and construction and steel.

1. Ores:

Currently, Portugal is one of the largest producers and exports of ores such as copper, tin and zinc

which are mostly explored in the Neves Corvo and Aljustrel mines, both located in the Iberian

Pyrite Zone (Faixa Piritosa Ibérica).

Copper has some special properties: good heat conductor, strong and durable material, resistant

to corrosion and a non-magnetic material, making it very attractive for several industries such as

the construction, power generation, machineries and other industrial parts and accessories.

In fact, the notoriety of the copper has been growing over the last years and it has been used as a

modern construction material. It is largely installed in buildings, water pipes and gas thermal

systems, roofs, terminations, or just as a structural component. The development of new

products such as rolled profiles, pipes, gutters and fall, has been expanding the scope of use of

the copper.

6 Source: http://economictimes.indiatimes.com/quickiearticleshow/3137357.cms (Accessed on the 27th June 2010)

19

It is also important to note that copper is a ore with a high potential of demand in the future

mainly for the construction industry, due to its profitability, adjustability and the current

environmental and social concerns.

As was stated in the Indian challenges, the current government is betting on the improvement of

the internal network of energy distribution. Therefore, power and energy is another industry

which can be a possible target for the Portuguese exports of copper, since it is essential for the

electrical generation and distribution as it is an excellent conductor of energy.

Furthermore, the industry of transports may also be a customer for Portuguese copper, once it

assumes an important role in the automotive area, being largely used in motors, electronics and

electrical systems.

2. High tech products:

Portugal is one of the global major players in some high tech niche markets. Thus, a country like

India that is eager to become one of the world’s super powers can be seen as an open window of

opportunity by some Portuguese companies to export the following products:

Technology for interactive communications;

Biometric reader technology;

Software for navigation and communications systems by satellite;

Decision-support systems for resource planning and management;

Interactive surfaces and boards;

System for fast opening a new company;

Contact center solutions;

Wind, wave and solar energy exploration.

3. Sustainability and Environment – Energy sector importance

‘India’s high population density, extreme climate and economic dependence on its natural

resource base make environmental sustainability critical in maintaining its development path.’7

This last sentence makes obvious the need for an alignment between the environment and

economic activity, in order to prevent environmental degradation to happen.

Giving the most prominent example (energy), India´s over usage of coal to powerhouse supply is a

problem that can be reduced through a change towards sustainable measures constituting a

strategy towards cost reduction, as well as indirect effects on a better risk management and

enhancing social responsibility. In this case, this would detriment the use of this scarce resource

(coal) as well as signifying other environmental effects like gas emissions or ash contents on air.

Therefore, this niche market on environment can be taken into consideration by Portuguese

companies by exporting cleaner technologies (wind, wave and solar energy as described above)

and helping Indian companies to establish ambitious targets on the usage of renewable raw

materials or renewable energies enforcing Indian companies to constitute a sustainability plan

7 Source: http://www2.goldmansachs.com/ideas/brics/ten-things-doc.pdf (Accessed on June 27, 2010).

20

with revised targets on environmental matters that would function as a checklist to materialize

this sustainability notion.

Despite India´s government efforts in building a “strong policy and institutional framework,

including a separate ministry for environment and forests or state and local pollution control

boards”, a good solution for implementation could be a partnership with Portuguese state

entities, like for example IEP – Instituto Electrotécnico Português, to overcome energy audits or

rationalization steps towards energy consumption reduction.

4. Partnership - Construction and Iron & Steel Companies

India is trying to become a developed country, seeking for materials (iron and steel) and

customised construction services that allow the country to create infrastructures such as bridges

or pillars. These kinds of infrastructures are indispensable for a country which aims not only

economic development but also life quality improvement. As a matter of fact, and according to

Jim O’Neill and Tushar Poddar in “Ten Things for India to Achieve its 2050 Potential”, one of the

major problems (and key-points) in India is the lack of “capacity for ownership and stewardship of

infrastructure development in the municipal bodies”. Additionally, India has also shortage of

skilled engineers and technicians.

Concerning with raw-materials, iron is the most widely used of all the metals in India. Its low cost

and high strength make it indispensable in engineering applications such as the construction of

machinery and machine tools, automobiles, the hulls of large ships, and structural components

for buildings.

Therefore, taking into account that Portugal is more and more a country of services there is an

opportunity behind the stated problem above, especially for construction companies which have

been progressively extending their services abroad. Moreover, these construction companies

would require materials to build infrastructures and what could be better than requiring those

materials to Portuguese extracting/manufacturing companies? Basically, this is meant to be an

implicit Portuguese partnership based on a “win-win” perspective and the creation of synergies

while taking advantage of India´s medium-long term needs.

Finally, we must bear in mind that each one of these companies may penetrate in Indian market

alone, but it becomes easier to soak one of them in the market first and then embed the other

one by something we can call “company collateralization”.

21

APPENDIX

22

Appendix

Appendix 1 - Hofstede Axes for India and Portugal

Figure 3 - Hofstede Axes for India and Portugals (source: http://www.geert-hofstede.com/)

Regarding Power Distance (PDI), India indicates a higher level of inequality of power and wealth

within the society when comparing with Portugal. The social classes are ranked according to a

system of castes that reinforces the social inequality lived in India.

India gets a much higher ranking than Portugal in Individualism (IDV), which means that “India is

a moderately collectivistic culture in which an individual’s decisions must be in harmony with the

family, group and social structure.” (Morrison, Conaway & Borden; 2004, p.168).

The India Masculinity (MAS) scores is much higher than the Portuguese one. Therefore, the gap

between the values of men (money and goods) and women (relationships and quality of life) is

bigger than that of Portugal.

India's lowest ranking Dimension is Uncertainty Avoidance (UAI) is a lot lower than that of

Portugal. Thus, Indians are more open to unstructured ideas and situations, having fewer rules

and regulations to attempt to control every unknown and unexpected situation. This is intimately

linked to the technology-driven society that characterizes India.

India is also considered in the 5th dimension of Hofstede, the Long-term Orientation (LTO), with

the score relatively higher than the world average, signifying an open-view for the future believing

in new prospects, don´t submitting to traditions.

23

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24

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