Brits abroad: Opportunities for UK businesses in India
John Carroll will be chairing a panel event to discuss this topic at One Great George Street on 24 June, with speakers including Baroness Wheatcroft and business leaders. Places are limited but if you would like to attend please
What do you see as the benefits of exporting for UK SMEs?
Studies have shown that companies that export are able to achieve growth that would not otherwise have been possible, and that they are also more resilient than their purely domestic counterparts. By not having all of their eggs in one basket, companies that operate internationally are four times less likely to default. For ambitious businesses who are looking to grow, exporting is a key component for successful long-term growth strategies.
What makes India such an attractive market for UK businesses?
There are many reasons why UK businesses should look to India as a potential new export market. One of the key benefits is the size of the market, with a population of over 1 billion, 58% of which is under 35, there is a huge workforce of young, talented people which is essential for any new business. Additionally, the middle class is expected to grow from 198 million in 2014 to 370 million in 2025, meaning there is huge potential for British exporters to sell in India.
Are there any key sectors of opportunity for UK Businesses in India?
Whilst the opportunities are vast, there are a few sectors that are of particular interest to UK exporters. One of these opportunities lies in the construction sector as India requires further investment in infrastructure, particularly in roads, ports and railways. The Indian government has recently rolled out a number of incentives for foreign investors in both the construction and manufacturing sectors. These include the ‘Make in India’ campaign and the ‘Delhi-Mumbai Industrial Corridor’, for which 100 billion USD of investment and support has been pledged. The upcoming government incentives for renewable energy projects in the state of Rajasthan also provide interesting opportunities for UK investors, who have the required technical expertise and know-how.
So with all this opportunity, why do you think some businesses may be reluctant to take the first steps to enter the Indian market?
Firstly, exporting to any new market can be a very daunting process and without the right preparation and support it can put a real strain on your business. We find, the biggest obstacle for exporting companies is identifying and connecting to potential customers. When entering any new market, it is critically important to find partners and potential new suppliers that you can trust, and we find that even those businesses who are already exporting to the EU or the US may be reluctant to expand further afield into markets such as India, as cultural nuances and lack of knowledge on aspects such as business practices can be an obstacle for foreign investors. Identifying and finding the right partners is especially relevant for companies looking to export to India, as business is often won and lost on personal relationships. This means that if you are hiring someone in the country rather than having a presence there yourself, you need to be able to connect to partners you can trust to represent your business fairly and accurately in the market.
So how can businesses know who to trust?
When establishing overseas, it can be difficult for an SME to get the support they need when they don’t have the brand recognition of a big multi-national name behind them. It is here that Santander is trying to help, and we have created a network of alliance partners with local banks in countries to which the Santander footprint doesn’t reach. For example, in India we have an alliance with ICICI bank, meaning that when a UK business goes to take its first steps in India, it can still receive the local support and knowledge that we know is crucial for SMEs. We have also developed the Santander Trade Portal which can identify potential new business partners for you from across the globe, and includes a feature which allows you to check if a company, ship or person is on an official restricted parties list of entities sanctioned or prohibited from business transactions by the United Nations and/or a state. Trade Portal can give you the key contact details of 5000 Indian importers, categorised by sector, as well as details of tender opportunities and over 20,000 sector-specific Trade Shows. The Trade Portal also contains a wealth of practical information including shipping costs, labelling rules and local regulations.
What would be your biggest piece of advice for companies who are looking to enter the Indian market?
There is no questions that preparation is key, and it should not be forgotten that what works in one country will not necessarily work in another. It is important to consider each country and each sector and all the particularities that come with them. For example, in the case of India, business deals are often done in the home whereas in other countries, such as the UK or Spain, this would more likely be in an office environment. Researching your chosen market and the practical information that you will need when establishing there should be a large part of your export strategy. Advice and support is available from various places, including government bodies such as our partner UKTI, and here at Santander we have a range of solutions to demystify the internationalisation process. This includes a series of country and sector specific roundtable events up and down the country, a dedicated India desk that is focused on helping UK businesses to explore and enter the Indian market, and the Santander Trade Portal. If you would like more information on any of the aspects mentioned here, please contact email@example.com or register for a trial of Santander’s award-winning Trade Portal at www.santandertrade.com.