India is a place of big numbers. Twelve million people enter the workforce every year. The population increases by 26 million a year and 65% of the population is under 25 years of age.
There are 800 million mobile phones. In the agricultural regions of the country, which used to employ 80% of the working population and now employ 58%, some women make a living by selling minutes on their mobiles to those without one.
Although growth has taken something of a hit in the global chaos stemming from the crisis in Europe, it is still above Australia’s – around 5% at the moment. The Government’s intention, if it is to keep voters happy, is to keep growth at around 10%, Dr Anupam Srivastava, the managing director of Invest India, told delegates to the Dell Women’s Entrepreneur Network conference in Delhi.
It’s another remarkable number.
Recently, the Indian Government released a new manufacturing policy. The goal is to soak up India’s unemployed and underemployed by increasing manufacturing dramatically.
Over the next 10 years, if all goes to plan, manufacturing will increase from 16% of gross domestic product to 40% of GDP, creating 110 million jobs.
For Australian companies that want a part of India’s growth, that represents an opportunity. The difficulty is penetrating through India’s maze of bureaucracy, an unfamiliar culture and a new legal and regulatory landscape.
Phoenex Legal’s co-founder and senior partner, Manjula Chawla, admits that compliance laws are “flooded with complexity”. For example, although foreign investment policy was liberalised in 1991, a move that helped India start to build its economy, there are still many carve-outs.
Like Australia, India’s laws and regulations vary by state and province. “For anyone setting up a factory for example, there will be different licences, environmental laws and electricity sanctions,” Chawla says.
Another headache is the issue of land titles, which have not been centralised, and are handed down through families, without up-to-date records.
The list goes on, but there is good news, Chawla says. “There is no sign of any bias against foreign companies,” she says. “And, while these rules may be confronting and at times very frustrating, there are many state governments developing a streamlined introduction through a single door.”
Shoba Purushothoman is of Indian heritage, but had never lived in India until she started her two business ventures, Training Ventures (she is co-founder) and TheNewsMarket, where she is co-founder and CEO. “I am just like any outsider coming in,” she says. “I have had no family here in India for seven generations.” She moved to Delhi from New York.
She sees a land of opportunity.
“There are three compelling reasons to be in India,” she says. “In any area of the economy, it is almost devoid of entrepreneurial innovation. Just pick any area and you can develop a business. There is so much inefficiency.”
“Secondly, there is a lack of sophistication,” she says. “Just do what you say you will do, and sell what you say you sell and you will be successful. Indian consumers’ expectations are not high. They are used to taking you they get, so there is an opportunity to push standards higher.
Purushothoman says India’s third attraction – the opportunity to innovate – is tempered by the challenges of doing business in India, particularly given its poor infrastructure – road, rail and the internet. Only 10% of India’s are connected to the net.
“Think hard about how to get to the consumer,” she says. “Innovate in the supply chain.”
Purushothoman recommends a long research period for any company – at least 12 months on the ground – before starting any kind of local venture.
Kiran Bedi, the founder of the India Vision Foundation, offered a different insight into doing business in India. Bedi says companies that redefine the rules of business and build sustainability into their business model in reality (rather than paying lip service) will build a business that lasts. “In India, once you get into business, you stay in business,” Bedi says.
It is impossible to spend any time in India without being aware of the vast areas of need in health, housing and sanitation. But Indians are not looking for charity, they are looking for opportunity. Bedi recommends businesses align a social corporate responsibility program tightly with their business goals. “I believe in business plus,” she says. “While you earn and grow, develop and keep your consumer.”
Bedi has worked with many large corporate partners, including Dell and SAP, to deliver programs to women and children, describing one program of schooling of children who are in prison with their mothers, and emerge from the experience with job prospects rather than as victims of crime.
Bedi says women entrepreneurs have a special role to play. “Women need to step in and evolve this new way of business to develop new rules to make socially health companies where social giving is not an add-on, it is part of what you do.”