India is one of the key emerging markets today. Home to 1.24 billion people, world’s largest democracy is inviting investment from all around the globe with the new ‘Make in India’ slogan. Investment in India is a mixed bag of great opportunities: early entry advantage vis a vis polity uncertainties, large untapped market vis a vis market uncertainties, huge potential for manufacturing, services and agricultural sector with a still developing infrastructure and so on. For investors, this seems to be the time to count their blessings and plunge head-on for doing business in India. A boost of Innovation, understanding of Indian culture and regulatory environment and policy of Corporate Social responsibility (CSR) are few of the key success factors of doing business in India.
After several decades, in 2014, India has got itself out of the coalition jinx and a stable federal government has been formed ensuring continuity in policy and polity for the next several years.
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This has sent a very positive signal to the global investors. However, the likely impact of the Nationalists and Hindu protagonists on the ruling party might keep the investors guessing about the political and religious climate. Ernst & Young consultancy have compiled data and details for deeper insights on doing business in India EY- Doing business in India.
CSR- The Indian Context
“CSR is a hard-edged business decision. Not because it is a nice thing or because people are forcing us to do it..because it is good for our business” Niall Fitzerald
India should be taken as a conglomerate of several small markets and approached like any other business or country. However, a key differentiating factor for success and failure has been as to how businesses have handled the corporate social responsibility in the context of Indian religions, diversities and treatment to the poor. India is more sensitive to these issues than to Price or promotion.
The companies act, 2013 has provisions for CSR within the business system. India as a land of religions relate CSR to philanthropic activity only and thus it becomes even more important to have a holistic approach to CSR.
- A good example of a firm with an alternate approach to brand image enhancement through CSR is GVK, an Indian conglomerate which has several international joint ventures. CSR is difficult to incorporate in real terms without support from Government and thus GVK teamed up with several state governments with due support from central government to carry on surveillance services and they have saved over a million lives in some way or the other in the last 10 years.
Tata group, Birla, Dalmiya , Ambanis, Infosys etc. have expanded their empire, also due to CSR activities. Below is the slogan from csrindia.com which clearly displays how India perceives CSR.
Optimizing business functions through Innovation
Innovation has been the key driving force in successful businesses globally. India has acknowledged the importance of innovation and institution in order to promote doing business in India. Government and companies have started to incorporate innovation as a part of the culture. Businesses from west which promises to enhance this further will find it easy to penetrate the Indian market(s). India is a place where sentiments at times have a bigger impact than the product features. Thus, through regular innovation in product designs and marketing techniques, it gets even more important for businesses to effectively position itself in the huge Indian marketplace.
- An example of tapping consumer sentiments through innovative marketing approach is from the two-wheeler gear less scooter category. The past decade has seen post liberator ladies populating the market with the desire to own their set of wheels. They don’t want to share it and companies like Hero have made it a national campaign attaching them with women empowerment. Their punch line says ‘Why should boys have all the fun?’ and has received rave admiration across the country making Hero Pleasure ladies scooter an immediate bestseller.
Understanding business culture and key Indian values
According to trade pundits, Indians like to take collective decisions on consumer durables and this trend is evenly seen in all market segments. Trust is what drives the Indian market and has to be considered while doing business in India.
According to Prof. Satish Deodhar from IIM Ahmedabad, ‘three kinds of events generate a lot of debate and discussions in India- elections, cricket and the Union budget’.
There are multiple fault lines to take care of, namely, Caste, Religion, Language, State and cultural norms for doing business in India. Together with being the fault lines, these are also unifying factors together with a few others like Bollywood (Indian counterpart of Hollywood), Cricket, Army, Constitution, Religious rituals, Customs, English (and, continuous growth of local languages), Indian Rupee, political structure and a growing sense of Indian identity (with new sentimental slogans like ‘Make in India’).
Related article on Make in India as a slogan to policy- Business Standard- Make in India slogan to policy .
Signs are propitious for greater liberalization and for a more welcoming regulatory environment and this seems to be the most appropriate moment for initiating India centric business. Facilitators are the Government through their ‘Make In India’ program, the large pool of talented English speaking young man-power, middle class of approx. 600 million (still growing) people, large diaspora of non-resident Indians/persons of Indian origin in important countries, and, last but not the least, the large potential market of at least 400 million upcoming population presently classified as economically weaker sections. The market dynamics and consumer preferences of the neighbouring countries, i.e., Nepal, Bhutan, Sri Lanka, Bangladesh etc. are just like those of India and an Indian presence will always ensure easy foothold in all these countries. So……….. India is calling!