Posts Tagged Doing Business in India
Guest-blogger on Terrorism in India
My fellow IIM alumnus, Venky Venkatraman, keeps an interesting blog at venkyvenkatraman.com We’ve decided to occasionally guest-blog, i.e., my posts will show up on his blog as well, and vice-versa.
I was intrigued by his take on the terrorist attack on Mumbai, and a comparison with the destruction in New York. Here’s his 7 Dec 2009 article:
26/11 vs 9/11
Last week I was in Bombay exactly 1 year after the terrorist attacks of a year ago (26/11). I made it a point to visit VT station and the Taj Mahal Hotel (site of two of the terrorist attacks).
VT station was its normal, bustling self. The only signs that anything untoward had happened there was that there was one armed military person behind a stack of bags at one entrance, a few other armed policeman loitering around and strangely enough a bunch of metal detectors at the various entrance and exit points which hardly anyone bothered to walk through. No signs any bullet holes or any indication of any kind of memorial to those 50 odd people who had been killed at this location last November.
The Taj Mahal Hotel (across from the Gateway of India monument) looked exactly the same as it did prior to the terrorist attack of last year which had left several sections of the hotel on fire. The only changes that I saw was the side walk around the Taj was cordoned off and at the main entrance, one had to go through a metal detector and bags were also scanned separately. On walking around inside, I met a Commander Ramamurthy who told me that he was a consultant to the Taj (presumably on security matters). I asked him about any memorial that might be present to remember those dozens of people who had died in the terrorist attack. He directed me towards the Golden Dragon restaurant where most of the killings had taken place and to the adjacent area where some of the terrorists had been killed. However on going to these locations, I could not find a single indication of bullet holes or more importantly any memorial to the tragedy that had taken place at this hotel.
Bottom line – after the terrorist attack of 26/11/2008, people in Bombay had just cleaned up and resumed business as usual at all the locations that had been hit. India had not invaded Pakistan to capture or kill the terrorists (who are clearly based out of there) and so no war had resulted which could have thrown the whole region into a turmoil. But despite this, no further overseas based attacks had taken place a year since 26/11 either because security in Indian cities had been improved so much or just sheer luck or that Pakistan itself was now in turmoil with the home grown terrorist creating havoc there or a combination of all of these.
Compare that to the attacks on NY City of 9/11/2001.
Add comment March 16, 2010
Doing without Paypal
If there was one single thing I’d emphasize in doing business in India, it would be Check The Regulations. Despite the liberalization, India still has a ton of them.
Paypal (or, maybe, its clients) just learned the hard way.
India doesn’t have a freely convertible currency. Paypal’s just discovered that it isn’t actually authorized to transfer funds cross-border there. Until the Reserve Bank of India and Paypal resolve whether it complies with all the regulations, Paypal abruptly put parts of its India service on hold.
Here’s what Anuj Nayar said on their blog: “I’m writing to let you know that personal payments to and from India and transfers to local banks in India have been suspended while we work with our business partners and other stakeholders to address questions they have about the service. During this time, customers can still make commercial payments to India but merchants cannot withdraw funds in Rupees to local Indian banks.”
The India business – small but fast-growing – isn’t sure how long it will take to resolve the issue; at the very least, some months. Meanwhile, to judge by the comments on its blog, many users have been left with financial issues to resolve.
Paypal is wholly-owned by Ebay, which entered India in 2004 by acquiring Baazee.com. However, the Ebay India site doesn’t use Paypal; it has a similar but independent method called Paisapay. Until recently Paypal did accept financial transfers into and out of India.
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(I’d say this is the international business equivalent of “Read The **** Manual” except that the “manual” in this case is hugely complicated and would probably occupy very many phonebooks…)
Add comment February 12, 2010
(Don't) Drive in India
Someone sent me a funny-but-true piece on driving in India; it’s attributed to Coen Jukens, ostensibly an employee of the Dutch software firm Baan, who spent a couple of years in Hyderabad. I couldn’t find anything more on Jukens, so I don’t know if the attribution is correct or not. Baan (later acquired by Infor Global Solutions) opened its Hyderabad office in 1998. The earliest version of the article – which has disseminated across the Internet – seems to be from the year 2000.
In the ten years since, I doubt the article has become any less accurate – except that the speed of traffic in all major cities has slowed to a crawl during much of the day. (The picture below was taken in Delhi.)
I stand by my book’s recommendation – expats and visitors to India should not attempt to drive there. Hire a car with a driver instead, read the article, and be not daunted.
Keep Distance...
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DRIVING IN INDIA by Coen Jukens (2000?)
I visited Mumbai recently and agree with the observations about driving. For the benefit of every Tom, Dick and Harry visiting India and daring to drive on Indian roads, I am offering a few hints for survival. They are applicable to every place in India except Bihar, where life outside a vehicle is only marginally safer.
Indian road rules broadly operate within the domain of karma where you do your best and leave the results to your insurance company.
The hints are as follows:
Do we drive on the left or right of the road? The answer is “both”. Basically you start on the left of the road, unless it is occupied. In that case, go to the right, unless that is also occupied. Then proceed by occupying the next available gap, as in chess.
(The rest of the article is under the jump…)
1 comment February 3, 2010
Virus-Warriors in Chennai
Oftentimes, Americans talking about outsourcing offshoring have stories of clueless youngsters with incomprehensible accents. I’ll admit that I’ve encountered inefficiencies and poor training; my experience as a consumer hasn’t been all good. One airline managed to give me four mutually exclusive answers to the same question…
But that’s not what I want to write about today. Today, it’s kudos to the Microsoft security people based in Chennai.
My computer had been colonized by the Alureon CT trojan, or actually rootkit . I didn’t even know: Norton Internet Security, (which is what I had) doesn’t see it, let alone block it. Then one day, someone suggested downloading Microsoft Security Essentials. It found Alureon CT, cleaned the computer, and then suggested I restart the machine. I did. And within minutes, Alureon was back. (Norton still showed nothing amiss.)
Rinse and repeat.
The infection explained some weird things that had been happening – like search hijackings, where clicking on a link took me someother-place.com. I’d attributed it to my computer aging and becoming incompatible with updated search engines. The thing is insidious; it keeps very quiet, but it can steal passwords and make your computer part of a network outside your control.
I also found that getting rid of Alureon was Not Easy. Someone on one forum opined “formatting and reinstallation of the operating system is the only sure way…“
Someone else suggested opening a support file with Microsoft. “Start here – https://support.microsoftsecurityessentials.com/ and select the link that says I think my computer is infected and then select the support option for phone (or email if phone is not offered for your region).”
6 comments January 8, 2010
Does Haagen Dazs Head Office Know?
There’s an update at the bottom of this post.
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When Haagen Dazs, the super-premium ice-cream company owned by the US corporation General Mills, recently announced it would be opening its first store in India in New Delhi, they probably weren’t ready for the internet sh*tstorm that was about to descend.
Someone sent me an article from a Times of India blog. The Haagen Dazs ice-cream franchisee in Delhi decided on a grand opening that involved a special preview for international travelers: “Access restricted only to holders of international passports.” Those international passports did not apparently include Indian ones; when the blogger’s friend “Ramit” tried to enter, he was turned away.
It’s already up on Boing Boing, one of the internet’s most influential blogs.
Foreign companies do sometimes make mistakes in their assessment of Indian markets and consumers. It’s usually carelessness or cultural obtuseness. This time, though, the problem seems to be home-grown. The franchisee is Indian; the location is Indian; and the man reportedly denied entry is Indian.
The embarrassment is truly multinational. The internet knows no borders.
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For companies, it suggests that apart from avoiding self-inflicted wounds like this one, it also makes sense to have a corporate policy for dealing with any issue that is likely to capture the public eye. There’s no such thing as far away.
Between blogs, social media, and people willing to “boost the signal”, it is impossible to *contain* such problems. They have to be responded to, and defused.
Right now, apologies would be good. And maybe some explanation: What was the man thinking?
There isn’t anything on the websites of Haagen Dazs, or of General Mills, as of Dec 15th, anyway.
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Followup: An article in India’s Economic Times, says the local manager claims it was all a mistake. The banner was supposed to imply that the ice-cream would be bringing a European flavor to India (though the brand is a US one.) And apparently Ramit was excluded not because he was Indian, but because the store was too crowded. Tempest in a teacup or frantic damage control? Difficult to tell, but better than nothing.
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2nd Followup: Anu Bhatia, of General Mills India, sent us this response (click on “read more”)…
4 comments December 16, 2009
The Non-resident Indian's India
A recent article in in the Wall Street Journal’s online edition was forwarded to a newsgroup I frequent. Called “The Brain Boomerang,” it spoke about Indians who, after years in the US, go back to India.
When researching my book, India Business Checklists, I met people in just this situation. Some find it more difficult to adjust that do non-Indian Americans who’ve never lived there. Returnees look Indian, may still speak Indian languages. But India’s so different from the West, they have a hard time doing business there, or even dealing with the million small hassles of daily life. Others, even if frustrated, are better at dealing with India than Western people who don’t have third-world experience.
Me, I love visiting India and feel right at home there. A line in the article resonated with me: “Leaving India makes you love it, too. Hustle. Innovation. Growth. Golgappas.“
But researching my book was frustrating. Traffic was a major problem. I could barely manage 1-2 interviews a day in person: I had to allow an hour or two of transit time each way because of unpredictable traffic jams. Unlike before – and unlike many Asian cities – the business centers are now dispersed, so interviewees might be anywhere. (On the other hand, people were very helpful, giving me information and introductions.)
People who have projects in India find it harder yet. Here’s the experience of one manager, who responded on the newsgroup. (If the language is unguarded, it wasn’t meant for publication until I asked permission to put it here. Anonymously.)
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“Having worked in India for over six years after [graduating from an Indian Institute of Management], then moving to the US for 20+ years, I think I have an idea of both sides – yes, current India too, to an extent, since I go there at least two or three times a year for work.
“The biggest issue is corruption – totally rampant. You nearly need to pay someone money to scratch your butt (I’ve personally done the cash-in-briefcase-to-govt-official thing).
“Second, the idea of infinite time – commitments mean little.
“Third, the endless hustling to get anything done.
“On the plus side is the refreshingly aggressive, can-do attitude that the current kids have – I would really like to see them land a succession of powerful kicks on the backsides of slothful babus whose main role seems to be to gum up the works.
“Bigger picture, I don’t think Mother India is mentally ready for the responsibility that a democracy entails. Autocratically run businesses – most of them – do well; democratically managed enterprises – government operations, for example, are mired in self-generated goo.
“Yes, there is always the issue that the government subsidized my education [note: Higher education in India is tax-payer-subsidized] and I need to repay it, that I am a gaddar who got my MBA on some poor guy’s khoon-pasina [blood and sweat] etc.
“True. I tried to repay, but they want it in a plain, unmarked brown envelope, small denominations.”
4 comments December 6, 2009
Versace and Video-games
Two news items caught my attention recently.
Versace, which opened a store in Mumbai in 2006, is looking to expand in India. It opened a second store in Delhi, reportedly one of their largest outlets worldwide. And it’s trying for an airport terminal store in Delhi. All this when the company globally made a loss because of the economic downturn.
Meanwhile, Sony launched its first Indian video-game earlier this year: Hanuman, Boy Warrior. (Predictably, there was an objection to having a deity as a video-game character. Unpredictably, the objection came from a US-based person.) Sony plans another half-dozen titles. The company’s India country manager said that India had the world’s largest untapped potential for videogames.
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India’s unsaturated markets are clearly a draw, recession or not. Its luxury market may be thin, but there’s still enough to attract some brands – and keep them.
And while a Price Waterhouse survey shows that companies in India are cutting costs to deal with the recession, this doesn’t seem to have stopped the expansion. For example, Accenture is planning to hire 8,000 people in 2010, bringing its total Indian staffing to 50,000.
Add comment November 12, 2009
India: Market of the Month
It’s nice to have the spotlight turned on India by the US Government’s Export.gov, which has chosen India as its Market of the Month, right behind China, which was its ‘market of the month’ in September 09.
Export.gov’s profile on India suggests a number of sectors as presenting opportunities for US firms:
- Civil Nuclear Energy
- Renewable Energy Aerospace and Defense
- Mining and Coal
- Safety and Security industry
- Healthcare
- Retail: Beauty and Personal Care
- Franchising
- Automotive
And, fortuitously, lists these upcoming events :
(The registration deadline was Aug 09)
- Oct-Nov, 2009 – Focus Franchising: U.S. Wellness, Beauty & Healthcare Franchise Concepts
- November 7-13, 2009 – Aerospace Trade Mission to India
- November 16-20, 2009 – Energy Efficiency Mission to India
- February 14 -19, 2010 – 2nd Solar Energy Trade Mission to India
- March 3-7, 2010 – U.S. Pavilion at India Aviation 2010, Hyderabad
- March 8-13, 2010 – Medical Trade Mission to India 2010
It’s all good. India’s made up of opportunities.
Well, not quite. The attractiveness of the market is undeniable; India and China are unsaturated markets, and currently, oases of positive growth. But India shouldn’t be perceived as a short-term opportunity by any company; that way madness lies.
Companies need to tread carefully. Promotional pieces like this one, which can encourage unprepared companies to rush in (“The world’s business is coming to India, are YOU?“) were one reason I figured a really pragmatic book of checklists was needed. Take a look; it’s here on Amazon, which has finally at long last added the “Look Inside” and “Surprise Me” functions. If you have a business interest in India, this may be a good starting point. India, like the universe, is not only more complex than most companies imagine, it’s more complex than they can imagine.
As I noted when I wrote India Business Checklists, it’s the kind of market that needs a practical approach to dealing with the the good, the bad and the very complicated.
Add comment October 12, 2009
Air India Rage
We’re all used to reading about air rage. Passengers get drunk or angry or just plain lose control, and start fights with other passengers and the cabin crew. Air India (the nation’s state-owned airline) has improved on this.
Recently, on a flight from Sharjah, the pilots mixed it up with members of the cabin crew. According to reports, it came to a mid-air fistfight. Over Pakistan. There’s something symbolic there…
“At one stage,” says IndiaTVNews, “the cockpit was unmanned, as the crew was busy fighting outside.”
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I really hope someone got pictures. Ahem. (Trying to be professional here.)
This is a reminder that India’s infrastructure problems include not just the physical plant, but also some management and training issues. This incident comes on top of a pilots’ strike on issues of pay. For now, the people involved have been “derostered” until an investigation is completed.
Add comment October 4, 2009
Indian Ports – Muddling Through Somehow
In fiscal 2008-09, India’s twelve major ports handled only 2% more cargo than the year before. (That compares with 12% growth the year before.)
Perhaps it’s just as well. At 530 million metric tons, the major ports were running at just over 100% of their capacity. That, and the relatively unsophisticated cargo-handling, means it takes a ship 5-7 days on average to unload at one of those ports. In Singapore, it takes 6-8 hours.
Once the material is off the ship, the problem’s not over: there’s a rail bottleneck. So getting the goods inland takes time, too.
The government has major plans to improve the ports, but a recent assessment by ICRA, a credit rating agency, doesn’t think they’ll make their targets. It’s taking too long. (But ICRA also thinks cargo volumes won’t grow as fast, so service might improve anyway.)
Perhaps the longer-term solution will come from some subset of the 200 or so ports controlled by the States, which already process more than a quarter of India’s sea-trade. Unlike the 12 major ports, whose tariffs are set by a governmental authority, these port can set their own prices. The state governments have less funding to develop their facilities, so a few are inviting in private sector investors, including foreign-owned companies. One example is Gujarat Pipavav Port Ltd, 54.8% owned by a unit of the Danish company AP Moller-Maersk A/S, which operates Pipavav, a port in Gujarat.
Infrastructure is perhaps the single biggest obstacle in India’s rapid growth path. Ports. Airports. Power. Water. Roads.
Yet, I’m more optimistic than I sound. We’ve been talking about infrastructure shortfalls for decades, and yet India’s managed positive economic growth year after year. India’s always been particularly good at workarounds and muddling through.
Add comment September 21, 2009
