Russian businessmen are no exception here. The Indian market is vast and multifaceted, but many are left with nothing. Business in India is a competitive struggle, in which you can succeed knowing the market specifics and pitfalls. In this article, we will begin to understand its difficulties and features.
In India, there are 2 interrelated factors to consider when doing business:
High competition. Its main reason is the high unemployment rate. Out of despair, people do everything. One person can be a taxi driver, waiter and city guide. Those who are not capable of more begin to sell everything that is not nailed down. This gives rise to a huge number of sellers with a minimum number of buyers.In terms of numbers, there are about 3,500,000 registered small and medium enterprises in India. If we take into account micro-enterprises, then this figure rises to 37 million. Also, do not forget about small traders, cabbies and just enterprising residents - which are not officially registered anywhere.
Poverty is a consequence of unemployment. Most of the population receives no more than 300-1000 rubles a day, despite the fact that families have to provide many children. And about 12% of the population generally live on $ 0.4 a day.
When choosing a sphere, target audience, location, direction of business and even promotion tools, you should always start from the two points listed above. Without a clear strategy and business plan that takes into account all the realities of the market, the risks of starting a business in India are too high.
You can get a clear understanding of the market through marketing research of the industry / niche / direction you are interested in. We do not recommend neglecting this when planning a commercial activity in India.
Among other factors, it is also worth highlighting:
- Variety of legislation. In general, there are general principles in the country, but each state sets its own "rules". To understand all the intricacies, use the services of qualified lawyers.
- The prevalence of microbusiness. This is especially true for resort states and poor areas. Souvenir tents, excursion bureaus and small restaurants of national cuisine are found here at every step. Prices in such institutions are low, sanitary conditions and the quality of service are appropriate. But for the local population, this is the norm. Foreign business should not try to squeeze into such areas.
- Traditions. Remnants of the caste system still persist in India. Despite the many prohibitions on caste division, even now representatives of some castes are separated from each other. Indians are extremely ambiguous about the quotas for the admission of lower castes representatives to the civil service, inter-caste marriages, and the advantages for people from the lower castes in admission to universities.
- White Leather Tax. Many Indian entrepreneurs charge higher prices and offer less favorable conditions for "white" citizens, in other words, foreigners.
- The prevalence of mediation. This is a serious problem and a brake on the development of Indian business. Not only will the cost of services transferred through "ten hands" be much higher, but also the terms of execution and the quality of work cannot be guaranteed.
If you need expert advice, you can leave a request through the feedback form on the website ("ask a question" on the right side of the page) or by the contacts below:
Maxim Kuznetsov - vice-president of the RAUIE
WeChat: maximkuznetsov