Doing Business in India – Finding the Right Local Partner


 One of the most frequent questions for INTO INDIA is how do we find the right business partner in India? Most case studies of Australian businesses succeeding in India reveal one key element – finding the right local partner.

What is the right local partner?

It is much more than someone who says “yes”. Too many have been frustrated in Indian market entry because they forged alliances with any and everyone who said “yes” – which means everyone they meet. India is a culture that cannot say no, so be wary of the yes answer.

The right partner is already active and successful in your field. They can show you their track record.

Your right partner will have connections among suppliers and customers, and will be keen to introduce you to them so you can form your own judgement.

In the collective culture of India, your right partner will be well connected in the various business chambers and will have good connections in government – central and state. This right partner will demonstrate these connections by organising meetings for you, rather than just saying “yes” we are connected.

Your right partner will be someone you double check with Austrade and with other reliable connections you have in India or Australia.

Your right partner could ultimately become an agent, a joint venture or more. They might just be a trusted individual who willingly offers to make connects for you – this freely opening doors does occur in India.

Your right partner might be a talented individual who you hire into your business. Or it might be a combination of external and internal. Patience will be your best friend as you make these choices.

Finally, your right partner will develop relationships for you – because in Indian culture relationships matter. Relationships first, business second is the path to long term business in India. Quick deals are just that – one transaction that might not lead to anything.

So, how are you going finding the right partner in India?
 

10 tips for creating trusting cross-cultural teams

No trust, no team.

When trust is absent, you do not have a working team.

Creating teams across cultures is not easy – and even once you have trust, you can accidentally break it in one meeting.

Why?

Communication styles differ across cultures. Some (like Australia) are blunt and direct. Others (like India) are very polite and indirect.

Some cultures (USA and others) like a lot of social talk before getting down to business. Others prefer business first.

Add to this differences over how to give feedback and disagreements in public and you have a potential minefield that will destroy trust in an instant.

We know that diversity has an upside and succeeding across borders is a business imperative.

So, how do you avoid destroying trust? My 10 tips:

First, learn about cultural differences. Ignorance is your own personal enemy. Too many global business leaders have little or no awareness of differing cultures. It is time to change by learning about these cultures.

Second, creating a strong starting point is essential – which means having a clear direction and an optimistic and compelling goal.

Third, ensure that at least some of the team members have been trained in cultural difference and can operate successfully across cultures.

Fourth, encouraging your team to be curious, adaptable, caring and friendly – leaders can do this by showing these characteristics themselves.

Fifth, be specifically aware of the potential explosive points of the different cultures represented in the team. This makes team leaders aware of what can go wrong, what can be misunderstood and how to involve and encourage team members who are from cultures that are reserved and indirect. If conflict does arise, address it straight away in a calm and friendly way.

Sixth, help the team understand the differences between cultures in terms of giving feedback – Australians on the team will generally be very direct, while Indians on the team will be more cautious and indirect with feedback. Talking these differences through can help both sides.

Seventh, based on the trust created by the above, team leaders can establish team standards and norms that everyone commits to sticking to. This will mean for several team members that they have to adapt from their cultural norm. If it is seen that the whole team is adapting, it becomes a shared and positive experience. If I am the only one in the team adapting, it is just no fun and will not last.

Eighth, watch out for cultural differences over starting times – this will cause simmering divisions in the team. Westerners will generally be on time and expect everyone else to be on time too. Other cultures will arrive late and be surprised that others are already there. Create an agreed standard for the starting time and everything else has a better chance of success.

Ninth, have a predictable and mutually agreed timetable for information sharing, such as zoom meetings, email information, one-on-one sessions and physical meetings. Some cultures do not respond well to variations and unpredictability – so try for stability but also allow for those urgent meetings that just need to occur.

Tenth, work hard on creating personal connections with every member of the team. This can take time and seems like a distraction to many leaders, but it is your strongest tool in reducing conflict in cross-cultural teams. Know what their non-work interests are and you will be surprised how well you connect.  

India a prime target for Aussie exports and investment – Austrade

Austrade’s Ashley Brosnan puts the case for Australian businesses to quickly get into India:

Australian businesses continue to see opportunities across a range of sectors including education, mining and resources, infrastructure, agri-food, and digital services. Thanks to the steady success of some great Australian brands, Australia is already a trusted supplier and investor.

However, India remains a challenging place do business. Expansion requires a high degree of market literacy and on-the-ground experience. Local partners help exporters and investors to navigate markets and regulation – and these partners can prove invaluable.

Despite this, the Government of India has signalled that India is ‘open for business’. It is emphasising investment and competitiveness as factors that will support the economy and encourage a return to growth.

The effects can be observed already in global rankings. India has moved up 63 places in the World Bank ‘ease of doing business’ rankings in recent years.

Austrade is helping Australian companies to explore India

The Australian Government is investing heavily in developing commercial links between Australia and India. The Australia-India Comprehensive Strategic Partnership agreed by Prime Ministers in June 2020 creates further opportunities for Australian business.

The Partnership seeks to build supply chain resilience between the two countries. It strengthens and diversifies trade and investment links with a focus on education, critical minerals and technology cooperation.

Today, Austrade posts across India are working intensively with Australian businesses to understand market, identify opportunities, make connections and help companies negotiate contracts.

India consumer spending skyrockets

India’s consumer spending a “revolution”

Austrade’s Ashley Brosnan on India’s consumer spending “revolution”:

The biggest revolution taking place is the rapid rise of a huge, diverse and wealthy consumer market. Despite the impacts of the pandemic, domestic demand is likely to be a major driver of recovery and growth over the next decade, making up 60% of the overall economy.

E-commerce is taking off as smartphone usage multiplies. India already has over 1 billion internet users and the digital economy’s contribution to GDP is projected to grow 15–20% by 2024.

Incomes are also rising strongly. India’s median income per household is expected to reach A$13,867 by 2025. The World Economic Forum considers that consumer expenditure in India will grow by a factor of four up to 2030.

This means over 80% of Indian households will be middle-income in 2030 – an increase of 140 million. Another 20 million will be considered high income.

India’s emerging and aspirational middle class is seeking premium food and beverage, healthy lifestyle products, technical infrastructure, quality healthcare and education, entertainment and consumer goods.

Trends in consumer demand are encouraged by a substantial, highly-skilled Indian diaspora in Australia, which is set to number 1.4 million in 2031.

India now a top FDI destination – assuring economic growth

FDI fuels double-digit growth

Austrade’s Ashley Brosnan sets out the FDI picture:

Despite the COVID-19 crisis, foreign direct investment (FDI) inflows into India grew 13% in 2020. This is an extraordinary achievement – and a landmark development in a country that has historically proved challenging to foreign investors.

The rapid inflow of investment makes India one of the few countries to experience double digit growth in FDI during 2020. It means India is now a top 10 destination for FDI, and it heralds a sea change in global investment sentiment.

Multinationals are seeking to move their supply chains into the subcontinent. The push factor is a desire to diversify from an over-dependence on China. The principal pull factor is a young, competitive workforce, particularly in the information technology and construction sectors.

FDI flows into India contrast sharply with the global picture. For example, FDI flows into China grew by 4% last year, while FDI flows globally fell 42%. FDI flows into developed economies fell 69%.

Investment in India is likely to grow significantly over the next decade.

India growth 2021 12.6% – the only world economy to be over 10%

Prime Ministers Modi and Morrison are close – and should talk more about trade.

Rapid recovery in 2021

Austrade’s Ashley Brosnan points to India’s post-coved economic recovery based on fast rollout of the vaccine, falling caseloads, economic stimulus and Foreign Direct Investment – it has every angle covered:

The OECD projects that India’s economy will grow 12.6% in 2021. This will make India the only major country to achieve double digit growth in 2021.

It should be acknowledged that the Indian economy is among the worst affected by the pandemic, which has resulted in strict, multi-month lockdown restrictions. GDP fell 10.3% in 2020 damaging household income and business confidence.

But rapid economic growth in 2021 will be driven by an expansive vaccine rollout, falling COVID-19 caseloads, and extensive economic stimulus.

Not forgetting that India is now a top 10 destination for Foreign Direct Investment.

India great agritech market but an insider advises “find local partners”

Agritech booming in India but be careful about market entry

A recent story in EVOKE, an agritech site, really caught my eye with a piece of sound advice.

It was so good to read the Managing Partner of Omnivore, Mark Kahn, with his greatest piece of advice to those not already there: do not to move to India immediately. Omnivore is the largest and oldest player in the Indian agritech venture scene

“I’ve never seen a foreign startup succeed in India that was selling directly. Sometimes we have very well-meaning people that relocate their lives here and think they’re going to be able to build an organisation from the ground up and the reality is it’s just very difficult.

“The best thing you could do is get some Indian members on your team, co-create solutions that bridge the gap between whatever you’ve developed earlier and whatever our local farmers actually need and find local partners.

“You should be manufacturing in Australia or maybe India, but you don’t want to build a distribution system yourself and even if you try, you’re not very likely to succeed.”

He pointed to agritech related to water and drought resistance as two high priority opportunity areas.

The agritech opportunities are huge, but INTO INDIA has been advising for a long time that you need partners and a collaborative mindset to really succeed in India.

Can trade steer the Indo-Pacific towards recovery?

Trade presents as a very mixed story for countries in the Indo-Pacific region – there appears to be both peril and opportunity ahead.

On the peril side – lockdowns, disrupted supply chains, security tension and travel restrictions.

What’s on the opportunity side?

Not much, but we should be optimistic.

The plunge in world trade could be bottoming out. Weak global growth could turn into moderate growth. Closed borders might soon open. And tensions around key areas of trade, technology and security (ie around China) could stop festering.

Or maybe pigs might fly?

What do you think is ahead?

Deakin University again leads the way with India

When organisations ask how to engage with India, the answer can be found in how Deakin University has built the India relationship.

Deakin has demonstrated patience, long term commitment, adaptability and real community engagement with India.

Their latest announcement takes it to another level:

“Deakin University’s relationship with India has been a key part of who we are for more than 27 years. Our Indian students and staff are an integral part of the Deakin community and we have been shocked and saddened seeing the COVID-19 crisis unfold. 

“After careful consideration about what we can do to help make a difference to the Indian community, we’ve decided to join forces with our long-time partners, Tata Trusts, through their initiative ‘One Against COVID-19’ to lend financial support and encourage our community and partners to do the same.

“Funds will go to the areas most in need, specifically to aid with:

  • Repairing/upgrading facilities
  • Staff training, and
  • Expert project management to improve the efficacy and efficiency of the health response

“These funds would be in addition to the existing Student Emergency Assistance Fund which supports Deakin students experiencing financial distress and would go directly to the individuals and public services in need in India.”

To Vice Chancellor Iain Martin and Ravneet Pawha, Deputy Vice President Global – well done for shining a light in the relationship with India.

Swami Vivekananda can teach us about cultural differences between India and the west

My Swami Vivekananda blog continues to gain reactions – he shows us how rich, diverse and deep is Indian culture and thought. He was the multitalented, multifaceted teacher, Hindu monk and spiritual guru, born in 1863. With his extremely popular and respected speeches of all times starting with “Brothers and sisters of America”, he introduced Hinduism at the parliament of world religions in Chicago way back in 1893.

Through study of his quotes, we can gain special insight into the cultural (thinking) differences between India and the west.

This learning comes with no judgement, no sense of one culture being better than another – it is offered in the spirit of understanding.

SV – “Truth can be stated in a thousand different ways, yet each one can be true.” 

This goes to the heart of cultural difference – the west treats truth as an “absolute”, meaning there is no room for difference or “relative” truth as stated in India.

This can show up in business activity, where the westerner sees the plan as fixed and set in concret(absolute), while the Indian sees it as just a plan, capable of change (relative).

SV – “All knowledge that the world has ever received comes from the mind; the infinite library of the universe is in our own mind.”

Here the west takes a materialist and scientific view of knowledge, seeing the role of the mind to gain knowledge from the external world.

SV – “Bless people when they revile you. Think how much good they are doing by helping to stamp out the false ego.” 

In the individualistic culture of the west, from a young age we are trained to “stand up for ourselves” so the likely response from a westerner when reviled is to defend or even to attack. “The best form of defence is attack” is a common western phrase.

SV – “Things do not grow better; they remain as they are. It is we who grow better, by the changes we make in ourselves.” 

This internal view is very different from the west, where growing better is generally reflected in possessions, honours and achievements – in external things.

SV – “The world is the great gymnasium where we come to make ourselves strong.” 

The big picture view of the world from the west is that it was put here for our benefit – so use it. At its worst, this has led to pollution and climate change. At its best, it is the basis of many innovations that benefit us all.

SV – “Do one thing at a Time, and while doing it put your whole soul into it to the exclusion of all else.” 

Multi-tasking has been highly fashionable in the west for decades and technology is the great enabler of it. But when you see a person totally focused on one task, you see how effective we humans can be.

SV – “All differences in this world are of degree, and not of kind, because oneness is the secret of everything.”

The concept of “oneness” is very foreign and strange to many westerners. They see differences as being of kind, and view the world through the lens of the individual, which is the opposite of “oneness”.

SV – “We are what our thoughts have made us. So, take care about what you think. Words are secondary, thoughts live and travel far.”

Thoughts are seen in the west as a totally private thing and secondary to what we do and say. Without words, a westerner could view thoughts as a waste of time.

SV –“Neither seek nor avoid, take what comes.”

This is a remarkably different view of life from how the west sees it. A westerner will strongly seek to either possess the attractive that comes or repel the negative that comes. In other words, far from “acceptance”, westerners take an activist approach to whatever life presents. It’s like a constant struggle.

SV – “In a conflict between the heart and the brain, follow your heart.”

“Think it through” is a much repeated piece of western advice, where the brain is given vast superiority over the heart.

SV – “The great secret of true success, of true happiness, is this: the man or woman who asks for no return, the perfectly unselfish person, is the most successful.”

For many westerners this is a strange concept. Happiness is seen as something the individual must find and keep for themselves. Many would see virtue in sharing and being unselfish, but they would see it as folly to be “perfectly unselfish”.

The above are just my interpretations – offered in the hope that they give useful understanding of cultural differences. We can learn from each other. What do you think?