India is one of the most populated markets in the world, but also among the most multifaceted to enter as an entity without having any previous experience in the area. Here’s some advice by experts at ASC to simplify foreign investment and own experiences that will give you beneficial tips over your competitors as you make the first steps towards success in India.
- Find the right partner: India is the world’s seventh-leading economy in terms of Gross Domestic Product and has a multifaceted market for the best Indian companies. Classifying the right partner goes a long way in effectively directing the difficulties of the local business environment for a new entrant (investor) into the Indian market. A local partner can deliver much-needed support in understanding the Indian market. The right partner can give you valuable market insights on competition, rules, and other important matters. Partner will assist you to target prospective clients without much investment on the ground.
- Limit your goods to meet consumer requirements and preferences: India is a vast and varied country covering different identities, languages, cultures, and religions. It is essential to avoid making generalities or assumptions, as local practices and consumer behavior may differ substantially from one area to another area. India has such a pluralistic, multilingual society offering one solution that fits all approach to establish a company.
- High level of price sensitivity: It is tremendously significant for a new investor to get its pricing policy right, mainly if it’s targeted towards the low and middle-income populations. Even with a budding economy and a growing middle class, there’s no denying the fact that India is still a low middle-income economy, with a per capita income and a massive population still living below the poverty line.
- Enter the Indian market for long-term Goal: India is not a place for companies to make quick gains you require to be invested for the long haul. Though it’s a massive market with a population of 1.3 billion people, comprising of 400 million middle-class consumers, it has its share of challenges when it comes to market entry. Given the complications of the market, it takes time for businesses to understand the environment and develop the right strategy.
- Arrange to navigate a much different legal and regulatory landscape: The Indian judicial system follows common law, and the constitution has provided for a single integrated system of courts to administer both union and state laws. Due attention should be paid, containing professional advice, before entering into a formal contract. Court judgments are often delayed because of the huge backlog of cases, so any agreement should provide the scope for alternative dispute resolution mechanisms.
For investors entering into the Indian market, it is necessary to classify the target market and find good partners who know the local market well and are acquainted with procedural matters. ASC assists foreign investors in exploring various market options in India that could include forming subsidiary relationships or joint ventures with an Indian based company.