Posts from — August 2008

Services, telecom, housing, construction activities, real estate, electrical equipment and computer software and hardware continued to attract increased Foreign Direct Investment into India.  According to India’s Reserve Bank, which is an arm of the government, FDI inflows during April-June 2008  crossed US$ 10.07 billion,  11 percent higher than the same period last year.

For the fiscal year ending March 2009, FDI may cross $40 billion at this rate

I was honored this week to be named India Journal’s ‘Person of the Week’.  Below is a reprint of their interview with me…

CERRITOS, CA – Gunjan Bagla dons many hats. An entrepreneur, academic and most recently author, he has a keen sense of the market here in the US and in India. He relies on more than 25 years of experience in global sourcing and marketing in India. Apart from being the Founder and Principal of Amritt Inc, which advises major Western companies on doing business in India, Bagla also teaches workshops and seminars for executives on how to become more successful in India, including a seminar offered three times a year by California Institute of Technology (CalTech).

Bagla’s book ‘Doing Business in 21th Century India: How to Profit Today in Tomorrow’s Most Exciting Market’ was released recently, and is packed with everything business leaders need to know in order to succeed in the emerging Indian market.

In an interview with India Journal, Bagla talks about his book among other things. Here are excerpts:

What was the inspiration for the book?
I wasn’t looking to write a book just yet but Warner/Hachette, one of the top five publishers in the country contacted me via a large aerospace client and asked me if I could.  I agreed to write the book because I am passionate about helping facilitate trade between India and the West. I do that on a day to day basis with my consulting practice for large and mid-size American companies. The book enables tens of thousands of people who can’t hire my firm as a consultant to still get some value from my expertise.

How is doing business in 21th Century India different from earlier times?
In India you have to function in both the 19th and 21st Century at the same time, ha ha. I ask my new clients (including many Indian Americans) if they have spent more than 30 days on business in India in the last five years. If they have not , they might be out of touch with how much some things have changed. For example, the Delhi Metro train system was built under budget and ahead of schedule. This doesn’t happen for public works projects almost anywhere. In the last five years, Indian manufacturing has become world-class: Hyundai exports cars from India to Europe and Africa. While Indian banks were slow to computerize at first, today you can make instant electronic payments into third party accounts, faster than many banks in the US function.  Many government officials have also become friendly to businesses. In the past they were almost hostile to businesspeople.

But not everything has changed:  you might be kept waiting for a long time, whether it is for an appointment or for a project deliverable.  And economic progress is making some thing worse than earlier times: such as traffic and noise.

What are some of the useful tips you have given entrepreneurs looking at the Indian market?
First, India is a complex market, you can’t expect to sell in Delhi the same way as you would in Chennai and you certainly can’t sell in India like you might in Los Angeles. Consumer marketing must be segmented by urban/rural, by socio-economic class, by region/religion/language. Business to business marketing can also be divided into many micro-segments. Second, India demands modern and unique solutions. You can’t  often take an obsolete American product to India and hope that will people will buy it. Whirlpool had to modify its washers to deal with saris and their Indian commercials hand to compare the machine movement to hand-washing (which Indian consumers believed was superior) before they could sell well in India.  Third, don’t be surprised about the capacity of the Indian market;  there’s no shortage of money among the rising middle and upper classes and among  industry in India today. American products and brands are particularly interesting in India from Nike, to Disney, to IBM to GE to HP. My client is selling California grown pistachios to India.

What are the most lucrative and profitable segments in the Indian market today?
For foreign companies entering India, there is unbounded opportunity Sectors I have highlighted in my book include defense where India will spend $50 billion in new equipment in the next few years. Manufacturing, Consumer Products, Knowledge Based Services, Infrastructure, Training/Education, and Entertainment of any kind are also hugely promising. But even if you are in a different segment, you might find large demand for your products and services in India, if you know how to enter the market.

How is doing business in India different than doing business in China today?
That’s a great question. I have traveled on business to Shanghai, Beijing and other cities in China and I truly enjoy being there. The infrastructure is superb and the people are hard working. But many foreign companies get burned because they apply their learning from China into India. It’s true that they are both large, fast growing Asian economies. But India has a free market, unlike China. This means consumers have a choice of news and entertainment media from all over the world,  that banks generally give loans only to people and companies  who can pay them back at market rates, that you can raise readily capital in India as a domestic or foreign company, that you can own land as a foreign company. Not all of this is true in China.  But also your workers in India are free to strike and form truly independent trade unions. And you can’t expect the Indian government to relocate people for you just to build a road or a factory at your convenience.  On a more mundane level, when you travel in China you generally can’t expect people on the street to speak English and your taxi driver probably won’t understand a word you say.  It’s not like that in India.

Anything else you would like to highlight about the book?
My book is balanced. It talks about the opportunity in India today.  But it does not mince words about the challenges of succeeding there. It’s not an easy place to do business, unless you have expert help or get lucky. It demands persistence and patience and I’m not shy to talk about this in the book.

How has Amritt Inc grown?
We have clients from across the North America and last year European companies also started calling us for help. Our client include Roll International, which owns the largest pistachio grower and exporter in the word, Johnson & Johnson,  Vivendi, Midway Games, and Denmark’s largest company, Danfoss; plus many smaller companies. We have senior consultants in California, Colorado, Tennessee and, of course, India.

What are the major services you provide?
We are a management consulting firm focused on globalization, with three broad practices: marketing, sourcing and training.
First we help Western companies market their products and services into India; second, we help with worldwide sourcing of products and services, but most often from the emerging economies of China, India and similar countries. Finally, we also provide training to executives and managers by offering in-company seminars on doing business in India. For example we have a special one day seminar on selling into India’s defense market.

The reasons for your success as an author and entrepreneur?
My book just came out and while early signs are excellent, perhaps we should wait to declare success as an author until we see some more evidence.  As an entrepreneur, success comes down to anticipating what the customer will need, to working really hard and to the ability to take measured risks over and over.

Your future plans?
I’ve worked in many industries from material handling, to energy to electronic to software to entertainment and in many functions from manufacturing to engineering to sales and marketing. But in consulting and advising executives how to globalize their business and in particular how to benefit from India, I have found my perfect niche. I just want to do more and more of the same for many years.

Bagla earned his MBA with honors from Southern Illinois University and his Bachelor’s degree in engineering from the Indian Institute of Technology (IIT) Kanpur.

Published by India Journal, August 21st, 2008
Gunjan Bagla: Authors Insightful Book On Doing Business in India
By A.MATTHEWS

Earlier this week, Business Week carried an article by me assessing India’s chances of hosting the 2020 Olympics and created quite a stir (see the reader feedback). And today, the Wall Street Journal has a short piece on the same theme. Read both and you decide whose article is better researched.

In any case since mine was first, so they don’t call me the India Expert for nothing. : ) .

A week ago both Bloomberg News and the Wall Street Journal predicted that the major agreement between Indian billionaire Anil Ambani and Hollywood uber-director Steven Spielberg was less than a week ago. This blog here suggestted that it may take longer than that.

Why?

First, when you negotiate with India you have to look at the calendar. August 15 was India’s 15th Independence Day. And today, August 16, is a significant Hindu festival, Rakshabandhan or Rakhi.

The Indian side is liable to be a bit distracted, isn’t it? Westerners dealing with India often don’t pay enough attention to the Indian calendar.

Second is the Indian sense of time. While the Ambanis are reputed to move very quickly, their DNA is still has the deliberative, argumentative streak present in Indian culture. Extended discussion builds relationships and open extended discussion build solid relationship. The extra time taken is probably a good thing for both sides.

Third, I am sure there’s some “nibbling” going on the both sides, to improve the deal in their favor by just a bit. Hollywood negotiators are good nibblers and so are the Indians. This might add a few days to the process.

Yesterday, India won its first ever solo Olympic Gold Medal with Abhinav Bindra in the men’s 10- meter air rifle competition. Underscoring the importance and power of cricket in India is that fact that the Board of Cricket Control in India (BCCI), promptly awarded Bindra with 2.5 million rupees (about $60,000).

If you do business in India, remember that “cricket rules.” Every other sport  pales in comparison.  Amen.