Great Ideas for your Small Business: Do Business in India
All types of american entrepreneurs should be exploring ways to tap into India’s thriving economy, according to Bobby Mukherji (see Great Idea 188). A growing middle class of 300 million is eager to buy American goods ranging from computers to clothing.
Business expansion is rampant in Bombay, New Delhi, and Bangalore, where there is a vast pool of cheap, skilled labor.
But before making a trip to India, he suggests doing extensive research into its history and culture. He said many foreigners are astonished by the massive poverty in the midst of great wealth. “An American who has never been exposed to the Indian culture will find the conditions extremely different from anywhere else in the world,” said Mukherji.
He recommends hiring a driver to get around, but there is no need for an interpreter because most Indians speak English. Still, be prepared for challenges. The business infra- structure is far from modern. Power outages are frequent, and there are only about 20 million phone lines for a country of 900 million people. “India is an extremely friendly, social place,” said Mukherji. “Personal relationships are very important. There is a lot of weight given to word-of-mouth agreements, and people respect that.”
If there’s a specific country you’d like to do business in, contact the U.S. Commerce Department and speak to a trade officer. Most officers are assigned to a particular nation or region, and they can put you in touch with prospective contacts.
You can also call the commercial attachés assigned to most embassies in the United States. Most countries want to encourage trade with the United States, so they will send a businessperson along with the ambassador.
More thoughts on India
BOBBY MUKHERJI has these additional tips for Americans interested in doing business in India:
- Learn how India’s Foreign Exchange Regulation Act affects financial transactions.
- Find an accountant who is familiar with Indian accounting rules and regulations.
- Cultivate personal relationships. Bring American-made gifts that are not widely available in India.
- Make sure your Indian business partner has a good reputation, as well as good contacts.
- Learn as much as you can about the culture and what to expect before making travel plans.
- Book hotels in advance. Many, especially in major cities, are filled with foreign businesspeople.
- Be on the lookout for torn or damaged bills. Many merchants won’t accept holey money. (Banks staple the notes, and the staples often rip up the bills.)