What does it take for Canadian companies in India to succeed?

With a trade mission planned to India and Nepal later this year to encourage more Canadian investment in both countries, there are five key elements about doing business that Canadian companies in India need to observe, if they need to succeed.

That’s according to Marvin Hough, the president of MIRA, a company specializing in helping Canadian companies set up operations internationally. Hough previously spent 30 years at Export Development Canada (EDC), the country’s official export credit agency.

At a virtual seminar organized by the Indo-Canada Chamber of Commerce (ICCC), which is leading the upcoming trade mission, Hough recalled the lessons learned from his time working for the Government of Canada – as well as at his own company – when it came to establishing beachheads for Canadian companies in India.

 

Do your homework before setting up operations in India

While at EDC, Hough served as senior trade commissioner to New Delhi for a four-year period, which provided him with insights into Indian business practices.

“From the very start, it is a market where you need to do your assessment of your market, and the good news is there are more players out there to help than ever before, and to really converge on a target market,” he said. “There is tremendous competition in many sectors and price competitiveness is a big factor.”

 

Learn to balance quality with affordability

Hough also shed light on the Indian mindset towards getting a good price for quality services, which requires Canadian companies to consult with the key specialists on both sides. 

“They include everything from every player from trade commissioners to legal tax experts too,” he explained. Other parties involved include “EDC – where I worked for 30 years and they are very active in India, commercial banks, and logistics and border obstacle experts, including people who can tell you exactly about tariffs, so that’s crucial.”

 

Commit fully to setting up operations

If a Canadian company in India wants to succeed, Hough recommends that its top management commit to organizing their setup in the subcontinent. That might include travelling across the ocean to build connections and forge relationships.

“You’ve got to be carefully looking at your financial capacity and budgeting your skills audit in terms of do you have the right players, or do you need to bring in players with technical capability, as well as the capacity to meet bigger orders if they arrive?

Hough explained that Canadian companies would also need to assess their local partners in India in terms of competitiveness.

“You’ll find that many Indian companies and agents are very enthusiastic, but you’ve got to really build that,” he said. “Understand what they can do for you. You need to be aware of the different modes of entry and taxes that apply. You need to think about your intellectual property and willingness to transfer technology as you enter the market and continue to develop.”

 

Understand the potential pitfalls of the Indian market

While companies are likely to bank on India’s strong economic growth to deliver returns, they need to look at investing in the country from a broader perspective.

“There’s other big issues in the markets, including political and security risks,” he revealed. “I really encourage companies to build – in India, or if you’re looking at Nepal – a full plan and get input from all the players that will outline them, because it is that kind of market where you need to do your homework and plan.

“When I was with EDC, we also did a lot of work on helping companies with their credit risks when they’re extending some credit to Indian buyers, and protecting them against non-payment,” he added.

 

Respect Indian business culture

Hough observed, during his many years of experience working with Indian counterparts, that a lot of Canadian companies just didn’t pay enough attention to the business culture aspect of Indian organizations/

“I highlight that, how it can impact all aspects of your business, from trying to develop those relationships, to building a brand in the market, to finding the right partners, and developing that kind of team that you need often in the market.”

– By Gautam Viswanathan, Deputy Editor, The Inspired Indian