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how to enter India

Tuesday 7 June, 2011

The Chicagoland Chamber of Commerce Global Connections Council presented a much improved forum INDIAN BUSINESS FORUM: NEW BUSINESS OPPORTUNITIES IN INDIA which featured Eric Cohen of Power Plant Services & George Molokal of Alcor Fund & was hosted by Allen Ginsburg & Raj Shah of DLA Piper.  Those techy Indians opened with greetings from the Consul General in Chicago sent via video feed.  She informed us that her US region did $4-5B in trade in the Midwest, the most with Illinois & Michigan.  There are at least 13 Illinois companies working in India.  India’s GDP is growing @ 8.5%, & 2nd in the world in Foreign Direct Investment, while India has invested $5.5B in the US, which is more than the reverse.  If you’re interested in working in a country with a stable democracy, large & young population, (their growing middle class is now bigger than the population of the U.S.)  that is investing in infrastructure, India is your place.  But because India prohibits foreign law firms to practice there, foreign lawyers have to partner up with the locals.

George Molokal was kind enough to send over the very comprehensive presentations by him & Eric Cohen.  Here they are:  India Forum – Alcor Presentation

Q&A

  • Corporate taxes are uniformly applied @ 35%.  Withholding taxes are 15% on dividends.  There have been no issues with repatriation of profits for the last 15 years.
  • Doing 360 degree interviews with employees & customers of 8-10 potential partners as an extra layer of due diligence should enable you to find partners you can trust.
  • The Indians are more process-driven & capitalistic than their neighbors to the east, so political connections are less important than they are in China.  However, certain industries, like infrastructure, have more political controls…
  • It’s best to take services & construction companies to India via partners, which is easiest & cheapest.  To hire & build takes experience & a long time.
  • Meeting partner expectations on both sides is a cultural risk.  Contracts very well may change in 6 months, so design that into your plans.
  • Because of India’s focus on education, the caste system has diminished in the last 15-20 years.  Now capitalism & merit-based systems prevail.
  • Geographically, there is more manufacturing in the west;  silicon valley is in the south; the auto industry is centered around Chennai; the northeast is the weakest.
  • More Indian women are joining the workforce, but most still stay home.
  • India’s Right to Information (RTI) act has opened up government bureaucracies so that they are now more transparent & move faster.  Thus, these bureaucracies have been losing power the last 5-7 years.
  • India is culturally different in being more family-driven, showing respect to elders, & minimizing individualism.
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