By R. Bruce Striegler

“Since 2004 the Indian market has been expanding exponentially,” says Raj Narula, Canadian entrepreneur. “I believe the reason was the introduction of wireless service for everyone. At that time, Reliance Communications introduced a handset for less than $10.” Although the hardware was inexpensive, the cost of voice calls was prohibitive and the market adapted by turning to texting instead. “This created a 50 to 1 cost reduction and was what I call a turning moment for India, as people connected to people. These small things are very important to Canadian business looking to enter new markets, understanding how to navigate on the ground, what the local business practices are and how to adapt to those conditions. One can become quite agile if you are using the right communication methodology in India.”

India is the world’s second most populous county behind China, with a population of over 1.2 billion people, the equivalent of 17.5 per cent of the total world population. With a GDP above five per cent for the last ten years, India is the world’s eighth largest economy. Data from the International Monetary Fund projected that India’s GDP would hit 2.3 trillion dollars (U.S.) in 2014. Remarkably, with a few exceptions, Bombardier in transit, SNC-Lavalin in roads and energy, Magna in auto parts, McCain in frozen foods and Sun Life in insurance, Canadian companies have a modest presence on the Indian scene.

In a recent web presentation, Economic Development Canada (EDC) provided an overview of the Indian market. Guest presenter Raj Narula, son of an Indian diplomat, grew up all over the world but did his high school in Canada. Mr. Narula was an early co-founder and president of TaraSpan, a high-tech com­munications company with offices in both Canada and India. He describes his first significant foray into India, “I was involved with strategic consulting, and helping companies navigate entry into new markets, and had been successful in turning around a number of Ottawa software companies. In doing so, I took one business to India, which was ultimately acquired by an Indian software company.” He says the experience taught him how to navigate and understand the market. For the past 12 years, and speaking multiple languages, Mr. Narula has divided his time between North America, India and the Asia Pacific region.

Doing business in India requires an adjusting of attitudes

He adds that another area that western business finds unfamiliar involves setting up meetings. “It’s a challenge, since a lot of the time meetings are not arranged well in advance. People’s schedules are so dynamic in India that getting a meeting becomes a challenge. However, the good part is that I’ve never gone to India and had less than 30 meetings in a week. In essence, the system always works, but it can seem that everyone is scrambling.”

Narula says that pretty well all segments of the Indian market offer Canadian companies potential. “From infrastructure development, a key priority, to a large demand for goods and services that fall within the automotive, healthcare, information and communication technology, oil and gas and renewable energy sectors.” He says, “There are so many products and processes that Canadian companies have mastered.” Just consider infrastructure, “India is investing hundreds of billions of dollars in upgrading its primitive transportation network and we have some of the best know-how in building roads, bridges and highways.” Mr. Narula points out that the country has 800 million telephone subscribers, “We’re talking a half million towers across the country with plans for as many more over the next five to seven years. When you begin to look at requirements in the country, they are limitless. As a Canadian company you must focus and target the market you’re going after, know your product and its applicability to that market.”

He continues by saying that companies must understand their price point, need to appreciate the support levels they’ll require in-country, have good quality agents or partners and representatives in India. Narula says it is critical to make sure the management teams both in Canada and India are on the same page. “The management team here in Canada has to understand what they are dealing with on the other side. It can actually impact budgets, personnel and resources. If you’re actively pursuing that market, you need to really be prepared and understand these realities.”

Size and scale of India can be overwhelming

Set apart from the rest of Asia by the continental wall of the Himalayas, the Indian subcontinent is bordered by the Bay of Bengal to the east, the Arabian Sea to the west and the India Ocean on the south. With a total land mass of 2,973,190 square kilometres (Compared to the 9,984,670 square kilometres of Canada), the English language is the major language of trade and politics, but there are fourteen official languages in all. There are twenty-four languages that are spoken by a million people or more, and countless other dialects. India has seven major religions and many minor ones, six main ethnic groups, and countless holidays.

EDC webinar panelist Kevin Loiselle President, CEO of Clearford Industries Inc. says, “One of the best ways I’ve heard to describe India is really more like a European Common Union, a collection of 36 states and territories form the country, and the differences between the states are comparable to the differences between, say, Germany and France. India really is a series of micro cultures within each of these states, and the differences have to be addressed.” In January 2015, Clearford Industries signed a memorandum of understanding with the Indian state of Gujarat’s Water Supply and Sewage Board, to create a strategic partnership and bring Clearford’s proprietary all-in-one wastewater collection and treatment system to rural regions of the State of Gujarat.

Mr. Loiselle adds that the size of India affects everything. “When you address the government, it and the bureaucracy is incredibly large. The size of the market is incredibly large, the companies you deal with are large.” He says that for most Canadians, everything is on a much bigger scale than in Canada. “The size of the airports, everything is on such a large scale that it requires a different approach than doing business in Canada. One of the differences you will notice first is how absolutely polite Indians are, from coast to coast. Their culture is one of not putting people in awkward positions. In fact, I’d say, they have difficulty saying no, even when they mean no. You may find yourself in discussions with people and misinterpreting the signals that they are sending.”

Canadian support for business at home and in-country is available

Raj Narula interjects, adding, “We’ve all experienced this in India, and it is a challenge. You don’t know if you’ve closed the sale or not, you’re thinking you’re heading in the right direction and all the signals are great, but deep down in those signals they are also saying, ‘We’re not ready to buy yet’.” Narula notes that other notable differences involve mobile phones, “In North America we may be reluctant to share those numbers due to our ‘nine-to-five’ work practices. When we go to India its 24-7, the only way to connect with business people is through mobile phones.”

When asked by the webinar moderator about price sensitivity or differences between Indian customers and Canadians, Kevin Loiselle says, “I think that people are price sensitive everywhere, and never more so than in India. I find price is a very important determinate and usually the capital costs are an especially important factor, while operating costs over a long period, less so.” He adds that competition is substantial, “There are a lot of companies from around the world out there, many are prepared to undercut their prices to get market share.”

Mr. Narula notes that one of the biggest challenges for Canadian companies entering the Indian market is the much smaller Canadian footprint, thus supporting these initiatives in foreign markets tends to be a little more difficult. “You’ve got to be able to innovate when it comes to how you’re going to pitch yourself, how you’re going to support yourself.” He says that it is important to utilize the support services available in Canada and in-country, such as federal and provincial trade representatives and federal agencies such as EDC.

Kevin Loiselle adds, “As Canadian companies, we shouldn’t be afraid to step out and ask for whatever assistance we may need and access those services. I’m not sure that people who are looking at entering foreign markets are aware of how much aid is waiting for them, already paid for by their tax dollars. I think they would be astounded by the level of support and quick action by these very smart people on the ground in India.” He also says that while Canadians are seen as highly technological, “We’re also seen as a country that is not especially aggressive when it comes to marketing ourselves and our products. “We’re less aggressive than most every other country, so much so, it is almost seen as a flaw.” He is most emphatic, after five years of experience with his own company’s entry to the Indian market, that it is critical to have someone who has relationships and understanding of the marketplace, who can make the kind of introductions you need.” Loiselle explains that India is not really a transactional based economy, it is a relationship-based one.

He continues noting that it is unlikely one will do business in India without establishing those relationships, which will not come from simply a dinner at the Mumbai golf club. “You need to work that relationship, you need to have boots on the ground, showing you have made a commitment to India and have the resources, staff and relationships with people who live in India.” Loiselle says one of the biggest mistakes Canadian companies can make involves not ensuring senior executives are in-country on a regular basis. “Flying over once, and trying to do business by Skype will not work.” Narula concurred with Loiselle, “It is important to be in front of people on a regular basis, it does advance your business and one might be surprised that once you succeed with your first business transactions, the dominoes will fall quickly.”