Working with India

Important Information for Conducting Business with India

Amanda Little

Welcome to The Republic of India

Geography3,287,263 sq kmClimate varies from tropical monsoon to temperate in the NorthOccupies 2.4% of world land areaNear Indian Ocean shipping routs (important for importing/exporting)Borders

PakistanNepalHimalayas (North)The Arabian sea (West)Bay of Bengal (East)Indian Ocean (South)

GovernmentFederal Republic with 28 statesIndia has been a functioning Democracy since 1947Adapted a British parliamentary systemPresident: Pratibha D. PatilPrime Minister: Manmohan SinghLarge population and size interferes with governmental controlPolitical corruption runs rampant and often interferes with governmental and economic reformsOperates under the common law system, influenced by English model

Economy

Developing open market economy1990’s economic liberation has dramatically increased economic success7.8% average yearly growth in GDP since 1997Indian currency (Rupee)

Exchange rate of 44.6 rupees to the U.S. dollar

Fully convertible Formally the Rupee has a market

determined exchange rate but the government takes part in a “dirty float” to keep exchange rates steady

The People

Religion in India

Hundu

Muslim

Christian

Sikh

Other

Unspecific

Population of 1.21 billionGrowing at a rate of 2.8% yearlyHolds 15% of the worlds populationDiverse cultures and religionsLanguages

HindiEnglish16 other official languages

CultureCollectivist societyRelationship based cultureValue tradition, family strength, distinct

social status linesStrong belief in Karma

Why India?

Why should aircraft companies market in India?Large population of potential consumersRecent economic success and growing GDP has increased the middle class

population ( currently approximately 3 million) India's middle class purchasing power is nearly equal to EuropeAir traffic in India has increased by 15.3% in the last nine yearsIncreased air travel has set a demand for more aircrafts Aircraft and aircraft products account for 13.1% of all Indian importsAs of 2009 India imported 2.2 billion dollars worth of aircraft products from the U.S.Trade liberalizations have made exporting products from the U.S. to India easier

Marketing in India Foreign businesspersons marketing in India must focus on establishing relationships with Indian consumers

Face-to-face meetings with business partners is seen as mandatory in IndiaBusiness in India revolves around trade groups and taking the time to form

relationships in India will provide access to more consumers and opportunitiesNetworking in India is more efficient then marketing via direct sale contractsLocal sales representatives are helpful in establishing relationships with

companies like Air India, Indian Airlines, and Blue Dart Aviation, all looking for replacement aircrafts

Technological knowledge and information on the marketed product is important to Indian consumers

Marketers should be prepared for technically specific questions by consumersBeing technologically competent can make the difference of making or losing a

sale in IndiaNegotiations and compromise is part of Indian business

5% price reduction is the normNegotiations are expected by Indian consumers

Specifics of working in India

U.S. Trade PoliciesLaws concerning exporting out of the U.S. revolve around what you are exporting, and where you are shipping that product toCan you export to India?

Exporting to India is legal as it is not considered to support terrorism

Does your product need a license?Exporting civil aircraft to India

requires no license and is shipped under No License Required (NLR)

State Foreign Representatives can be enlisted to assist with legal, logistical, and financial issues.

Indian Trade PoliciesTariff barriers

Recent tariff reduction on non-agricultural goods from 12.5% to 10%

Duty is collected on all importsAll imports must be accompanied by a letter of credit and import declaration in bill of entry formatIndian Country Commercial Guide states all trade requirements from 2009-2014

Specifics of working in IndiaLetters of Credit

Necessary for all imports into IndiaAct as security for consumer and distributerEase the lack of trust between consumer and distributer

Managing inventoryElectronic data interchange allows for flexible communication between

distributer and consumers. Technological tracking information makes it easy for companies to know

when their product has arrived at its destinationBeware of corruption

Businesses in India are constantly paying bribes to bureaucrats to ensure applications are expedited and not obstructed

Corruption is normal in India but by the U.S. Foreign Corrupt Practices Act, it is illegal for American firms to take part in bribery of any foreign government official

References • Central Intelligence Agency. (2011, December 30). CIA. doi:

https://www.cia.gov/library/publications/the-world-factbook/geos/in.html

• ExchangeRate.com - Currency Information Indian Rupee. (2012). ExchangeRate.com - Currency Information Indian Rupee. doi: http://www.exchangerate.com/currency-information/indian-rupee.html

• Export Licenses, Standards and Economic Sanctions. (2011, May 23). Regulations / Licenses. doi: http://export.gov/regulation/index.asp

• Export your products. (2010). Choose Washington. doi: http://www.choosewashington.com/business/export/Pages/default.aspx• How To Sell Your Products in India. ( April 30, 2007). Articlesbase. doi: http://www.articlesbase.com/sales-articles/how-to-sell-your-

products-in-india-140287.html• Grihault, Nicki (2009) India: Culture smart. New York, NY: Kuperard

• Hill W. L. Charles, (2011) Global business today. New York, NY: The McGraw-Irwin Inc.• Introduction to Commerce Department Export Controls. (2010, August). Export Control Basics (Exporting 101). doi:

http://www.bis.doc.gov/licensing/exportingbasics.htm• Misra, Marina (2009) India: A comprehensive introduction to the world’s fastest growing country. London: Constable & Robinson• Lustig, W. Myron, & Jolene Koester (2003) Intercultural Competence: Interpersonal Communication across Cultures. Boston: Allyn

and Bacon• Shan, S. (2009, May 28). India's Demographics Challenge. Bloomberg Businessweek. doi:

http://www.businessweek.com/managing/content/may2009/ca20090529_892000.htm• Welcome to India in Business : Know India. (n.d.). Welcome to India in Business : Know India. doi:

http://www.indiainbusiness.nic.in/know-india/india-at-a-glance.htm• Workman, D. (2011, March 31). India Trade Statistics 2009. Suite101.com. doi: http://daniel-workman.suite101.com/india-trade-

statistics-2009-a220375